SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 ---------------

                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934



Date of Report (Date of earliest event reported):  May 17, 1999


                              Tredegar Corporation
- --------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)



            Virginia                    1-10258                 54-1497771
- -------------------------------- ------------------------ ----------------------
  (State or Other Jurisdiction       (Commission File        (I.R.S. Employer
of Incorporation or Organization)         Number)           Identification No.)


1100 Boulders Parkway
Richmond, Virginia                                          23225
- -------------------------------------------   ----------------------------------
(Address of Principal Executive Offices)                  (Zip Code)



Registrant's telephone number, including area code:  (804) 330-1000





Item 2.  Acquisition or  Disposition of Assets.

         On May 17,  1999,  Tredegar  Corporation  (formerly  known as  Tredegar
Industries,  Inc.)  ("Tredegar")  acquired Exxon Chemical Company's plastic film
business  for $200  million.  The source of the cash  consideration  paid in the
transaction  was from  Tredegar's  Revolving  Credit  Facility  Agreement  among
Tredegar,  the banks named therein,  The Chase Manhattan Bank as  Administrative
Agent,  NationsBank,  N.A. as  Documentation  Agent and Long-Term Credit Bank of
Japan, Limited as Co-Agent.


Item 5.  Other Events.

         On May 20,  1999,  at its  Annual  Meeting  of  Shareholders,  Tredegar
announced  that it  anticipates  lower than  expected  results for 1999 due to a
variety of factors affecting its Film Products division and expenses  associated
with the recent Therics acquisition.

Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.

(a)      Financial Statements of Business Acquired.

         Financial Statements with respect to the acquisition required by Item 7
of Form 8-K will be filed not later than July 30, 1999.

(b)      Pro Forma Financial Information.

         Pro  Forma  Financial  Information  with  respect  to  the  acquisition
required by Item 7 of Form 8-K will be filed not later than July 30, 1999.

(c)      Exhibits.

         Exhibit 2.        Asset  Purchase  Agreement, dated  April 23, 1999, by
                           and between  Exxon  Chemical  Company,  a division of
                           Exxon Corporation, and Tredegar Industries,  Inc (the
                           "Agreement").  The  schedules  and  exhibits  to this
                           Agreement   are  omitted  in   accordance   with  the
                           instructions  to Item 601(b)(2) of Regulation  S-K. A
                           listing of such  schedules  and  exhibits is found in
                           the  Agreement  and  Tredegar  hereby  undertakes  to
                           supply  the   Securities   and  Exchange   Commission
                           supplementally  with a copy of any such exhibits upon
                           request.

         Exhibit 20.1      Text of  Press  Release issued by Tredegar on May 17,
                           1999.

         Exhibit 20.2      Text of  Press  Release issued by Tredegar on May 20,
                           1999.

                                     - 2 -



                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                          TREDEGAR CORPORATION



Date:     May 25, 1999                    By:  /s/ N. A. Scher
                                             ________________________
                                               Norman A. Scher
                                               Executive Vice President


                                     - 3 -

                            ASSET PURCHASE AGREEMENT

                                 BY AND BETWEEN

                            TREDEGAR INDUSTRIES, INC.


                                       AND


                             EXXON CHEMICAL COMPANY

                         A DIVISION OF EXXON CORPORATION


                             FOR THE PURCHASE OF ITS

                                  FILM BUSINESS



                                 APRIL 23, 1999



                              TABLE OF CONTENTS


1.0 CERTAIN DEFINITIONS........................................................1


2.0 TRANSFER OF ASSETS AND PROPERTIES.........................................14

         2.1 Purchased Assets.................................................14
              2.1.1 Real Property Owned.......................................14
              2.1.2 Real Property Leased......................................15
              2.1.3 Equipment, Machinery and Other Tangible Personal Property.15
              2.1.4 Contracts Relating to the Business........................15
              2.1.5 Customer Lists, Sales and Marketing Materials,
                    and Business Pla...................ns.....................16
              2.1.6 Permits; Licenses.........................................17
              2.1.7 Property, Personnel and Accounting Records................17
              2.1.8 Goodwill..................................................17
              2.1.9 Inventory.................................................17
              2.1.10 Accounts Receivable......................................17
              2.1.11 Prepaid Expenses.........................................17
              2.1.12 Business Application Computer Software...................18
              2.1.13 Customer Confidentiality Agreements......................18
              2.1.14 Other Intangible Assets..................................18
         2.2 Intellectual Property............................................19
         2.3 Excluded Assets..................................................19

3.0 CONSIDERATION AND TERMS...................................................21

         3.1 Consideration for Purchased Assets...............................21
         3.2 Payment of Consideration.........................................22
         3.3 Allocation of Purchase Price.....................................22
         3.4 Certain Price Adjustments........................................23
         3.5 Certain Taxes....................................................24
         3.6 Product Returns and Credits......................................25
         3.7 FemCare Reimbursement............................................25

4.0 ASSUMPTION OF LIABILITIES; EMPLOYEE MATTERS...............................25

         4.1 General Limitation on Assumption of Liabilities..................25
         4.2 Assumed Liabilities and Obligations..............................26
         4.3 Offer of Employment..............................................26
         4.4 Vacation Liability...............................................27
         4.5 Other Employee Benefits..........................................27
         4.6 WARN Act.........................................................30

5.0 CLOSING...................................................................31

         5.1 Time; Location...................................................31
         5.2 Documents........................................................31
         5.3 Reasonable Steps.................................................32

6.0 REPRESENTATIONS AND WARRANTIES OF SELLER..................................33

         6.1 Organization, Good Standing and Power............................33
         6.2 Authorization of Agreement and Enforceability....................33
         6.3 No Violations; Consents..........................................34
         6.4 Financial Statements.............................................35
         6.5 Absence of Certain Changes or Events.............................35
         6.6 Title to Properties; Absence of Liens and Encumbrances...........38
         6.7 Permits; Licenses................................................39
         6.8 Compliance with Laws.............................................39
         6.9 Legal Proceedings................................................40
         6.10 Books and Records...............................................41
         6.11 Labor Disputes..................................................41
         6.12 Payroll Practices/Employee Arrangements.........................42
         6.13 No Finder.......................................................42
         6.14 Interest in Business............................................43
         6.15 Leases and Contracts............................................43
         6.16 Employees of the Business.......................................45
         6.17 Accounts Receivable.............................................45
         6.18 Taxes...........................................................45
         6.19 Inventories.....................................................46
         6.20 Year 2000 Matters...............................................46
         6.21 Sufficiency, Title and Condition of Purchased Assets............46
         6.22 Insurance.......................................................47
         6.23 Orders, Commitments and Returns.................................47
         6.24 Product Warranties..............................................48
         6.25 Affiliated Transactions.........................................48
         6.26 Environmental Matters...........................................49

7.0 REPRESENTATIONS AND WARRANTIES OF PURCHASER...............................49

         7.1 Organization, Good Standing and Power............................49
         7.2 Authorization of Agreement and Enforceability....................50
         7.3 No Violations; Consents..........................................50
         7.4 Legal Proceedings................................................51
         7.5 Financial Capacity...............................................51
         7.6 No Finder........................................................51
         7.7 Purchaser's Knowledge............................................52

8.0 COVENANTS OF SELLER PRIOR TO CLOSING DATE.................................52

         8.1 Required Actions.................................................52
              8.1.1 Access to Information.....................................52
              8.1.2 Conduct of Business.......................................52
              8.1.3 Maintenance of Properties.................................53
              8.1.4 Maintenance of Books and Records..........................53
              8.1.5 Compliance with Laws and Regulatory Consents..............53
              8.1.6 Performance of Obligations................................54
              8.1.7 Approvals; Consents.......................................54
              8.1.8 Notice of Material Damage.................................54
              8.1.9 Advise of Changes.........................................54
              8.1.10 Pay Employees to Closing Date............................55
              8.1.11 Retain Employees.........................................55
              8.1.12 Compliance with Agreement................................55
              8.1.13 Title Commitments........................................55
              8.1.14 Surveys..................................................56
         8.2 Prohibited Actions...............................................56
              8.2.1 Sale of Purchased Assets..................................56
              8.2.2 Business Changes..........................................56
              8.2.3 Incurrence of Material Obligations........................57
              8.2.4 Incurrence of Liens.......................................57
              8.2.5 Change in Employee Compensation and Benefits..............57
              8.2.6 Publicity; Advertisement..................................57
              8.2.7 No Release................................................58
              8.2.8 No Termination or Modification............................58
              8.2.9 No Breach.................................................58
              8.2.10 No Negotiations..........................................58
         8.3 Other Matters....................................................59
              8.3.1 Environmental Assessment..................................59
              8.3.2 Confidentiality...........................................59

9.0 COVENANTS OF PURCHASER PRIOR TO CLOSING DATE..............................59

         9.1 Required Actions.................................................59
              9.1.1 Confidentiality...........................................59
              9.1.2 Advise of Changes.........................................60
              9.1.3 Compliance with Agreement.................................60
              9.1.4 Publicity; Advertisement..................................60
         9.2 Investigation....................................................61
         9.3 Approvals; Consents..............................................61

10.0 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER.........................61

         10.1 Accuracy of Representations and Warranties......................61
         10.2 Performance of Agreement........................................62
         10.3 Seller's Certificate............................................62
         10.4 Officer's Certificate...........................................62
         10.5 Good Standing Certificates......................................62
         10.6 Absence of Proceedings..........................................62
         10.7 Actions and Proceedings.........................................63
         10.8 HSR Act Waiting Period..........................................63
         10.9 Permits and Consents............................................63
         10.10 Section 1445 Affidavit.........................................64
         10.11 Resin Contract.................................................64
         10.12 Proprietary Assets.............................................64
         10.13 Required Financial Statements..................................64
         10.14 Key Employees..................................................64
         10.15 Title Insurance................................................65
         10.16 Assignment of Key Customer Contract............................65

11.0 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER........................65

         11.1 Accuracy of Representations and Warranties......................66
         11.2 Performance of Agreement........................................66
         11.3 Purchaser's Certificate.........................................66
         11.4 Officer's Certificate...........................................66
         11.5 Good Standing Certificates......................................66
         11.6 Absence of Proceedings..........................................67
         11.7 Actions and Proceedings.........................................67
         11.8 HSR Act Waiting Period..........................................67
         11.9 Consents........................................................67

12.0 OBLIGATIONS AFTER THE CLOSING DATE.......................................68

         12.1 Confidentiality.................................................68
         12.2 Covenant Not to Interfere.......................................69
         12.3 Transition of Employees.........................................69
         12.4 Management Assistance by Seller.................................69
         12.5 Further Assurances of Seller....................................70
         12.6 Further Assurances of Purchaser.................................70
         12.7 Retention of and Access to Records; Cooperation.................71
         12.8 Name............................................................71
         12.9 Accounts Receivable Payment.....................................72
         12.10 Rebates........................................................72
         12.11 Access for Remediation.........................................72
         12.12 Exxon/Ancon Policies...........................................74
         12.13  Return of Excluded Manuals, Documents and other Media.........74
         12.14 Noncompetition.................................................74
         12.15 Enforcement of Secrecy Agreements with Non-hired Employees.....75

13.0 TERMINATION..............................................................75

         13.1 Termination of Agreement........................................75
         13.2 Return of Documents.............................................76
         13.3 Limitations on Remedies.........................................77

14.0 SCOPE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION....77

         14.1 Scope and Survival of Representations and Warranties............77
         14.2 Indemnification by Seller.......................................78
         14.3 Limitations on Seller's Obligation to Indemnify.................79
         14.4 Indemnification by Purchaser....................................80
         14.5 Limitations on Purchaser's Obligation to Indemnify..............81
         14.6 Environmental Indemnification...................................82
         14.7 Procedures for Indemnification..................................86

15.0 GENERAL..................................................................87

         15.1 Expenses........................................................87
         15.2 Waivers.........................................................88
         15.3 Binding Effect; Benefits........................................88
         15.4 Notices.........................................................88
         15.5 Bulk Transfers Laws.............................................89
         15.6 Like-Kind Exchange..............................................89
         15.7 Entire Agreement................................................90
         15.8 Counterparts....................................................90
         15.9 Headings........................................................90
         15.10 Construction...................................................91
         15.11 Exhibits and Schedules.........................................91
         15.12 Governing Law and Choice of Forum..............................91
         15.13 Cooperation....................................................91
         15.14 Severability...................................................92
         15.15 Reservations...................................................92
         15.16 Attorneys' Fees................................................92
         15.17 Successors and Assigns.........................................92





                         LIST OF SCHEDULES AND EXHIBITS

                                    SCHEDULES

Schedule 1.20(a)              --        Employees
Schedule 1.20(b)              --        Inactive Employees
Schedule 1.33                 --        Financial Statements
Schedule 1.40(a)              --        Certain Representatives of Seller
Schedule 1.40(b)              --        Certain Purchaser Representatives
Schedule 1.42                 --        Leases and Contracts
Schedule 1.51                 --        Permitted Encumbrances
Schedule 1.64                 --        Real Property Leased
Schedule 1.65(a)              --        Real Property Owned - Illinois
Schedule 1.65(b)              --        Real Property Owned - Pennsylvania
Schedule 2.1.3(a)             --        Equipment, Machinery and Other  Tangible
                                        Personal Property
Schedule 2.1.3(b)             --        Personal  Property  Not  Located  on the
                                        Real Property Owned
Schedule 2.1.9                --        Inventory   Not   Located  on  the  Real
                                        Property Owned
Schedule 2.1.11               --        Prepaid Expenses
Schedule 2.1.12               --        Excluded  Business  Application Computer
                                        Software
Schedule 2.1.13               --        Customer Confidentiality Agreements
Schedule 2.3.7                --        Excluded   Manuals,   Documentation  and
                                        Other Media
Schedule 2.3.13               --        Certain Excluded Assets
Schedule 3.3                  --        Allocation of Purchase Price
Schedule 3.4.2                --        Historical Working Capital Trends
Schedule 4.2                  --        Assumed Liabilities
Schedule 4.5.2                --        Sample Pension Calculation
Schedule 6.4                  --        Financial Statements
Schedule 6.5                  --        Certain Changes or Events
Schedule 6.6                  --        Variances  and  Permitted Non-Conforming
                                        Uses/Flood Plain
Schedule 6.7                  --        Permits
Schedule 6.8                  --        Compliance with Laws
Schedule 6.9                  --        Legal Proceedings
Schedule 6.11                 --        Labor Disputes
Schedule 6.12.1               --        ERISA   Plans   and  Payroll  Practices/
                                        Employee Arrangements
Schedule 6.15.8               --        Certain Contractors
Schedule 6.18                 --        Tax Matters
Schedule 6.19                 --        Inventory Matters
Schedule 6.20                 --        Y2k Non-Compliant Systems
Schedule 6.21                 --        Sufficiency,   Title  and  Condition  of
                                        Purchased Assets
Schedule 6.24                 --        Known Warranty Claims
Schedule 6.25                 --        Affiliate Transactions
Schedule 7.7                  --        Purchaser Knowledge Exceptions
Schedule 8.2.3                --        Incurrence of Material Obligations
Schedule 10.17                --        Freedom to Operate Opinions
Schedule 12.4                 --        Management Assistance by Seller





                                    EXHIBITS

Exhibit 1.18                  --        Confidentiality Agreement
Exhibit 3.4.1                 --        Form   of   Adjusted   Working   Capital
                                        Worksheet
Exhibit 5.2.1(a)              --        Special Warranty Deed - Illinois
Exhibit 5.2.1(b)              --        Special Warranty Deed - Pennsylvania
Exhibit 5.2.2                 --        Bill of Sale
Exhibit 5.2.3                 --        Assignment and Assumption Agreement
Exhibit 5.2.4(a)              --        Assignment  of  Trademarks   from  Exxon
                                        Corporation to Purchaser
Exhibit 5.2.4(b)              --        Assignment   of   Trademarks  from  Esso
                                        (Schweiz) to Purchaser
Exhibit 5.2.5                 --        Form of Technology License Agreement
Exhibit 5.2.7                 --        Form of Existing Inventory License
Exhibit 6.16(a)               --        Form   of  Proprietary  Information  and
                                        Invention Agreement
Exhibit 6.16(b)               --        Collective Bargaining Agreements



                            ASSET PURCHASE AGREEMENT


This Asset  Purchase  Agreement is entered into and is effective as of this 23rd
day of April,  1999,  by and  between  Tredegar  Industries,  Inc.,  a  Virginia
corporation  ("Purchaser"),  and Exxon  Chemical  Company,  a division  of Exxon
Corporation, a New Jersey corporation ("Seller").

                                    RECITALS:

This Agreement (as hereinafter defined) sets forth the terms and conditions upon
which  Purchaser  is  purchasing  the assets  (other than  Excluded  Assets,  as
hereinafter  defined)  used in the conduct of the business of Seller's  Business
(as hereinafter defined),  and Seller is selling to Purchaser such assets (other
than Excluded Assets).

In  consideration  of the  mutual  agreements,  covenants,  representations  and
warranties   contained  herein,  and  in  reliance  thereon,   the  Parties  (as
hereinafter defined) hereby agree as follows:

In  consideration  of the  mutual  agreements,  covenants,  representations  and
warranties   contained  herein,  and  in  reliance  thereon,   the  Parties  (as
hereinafter defined) hereby agree as follows:

1.0      CERTAIN DEFINITIONS

As used herein, the following terms shall have the following meanings:

1.1      The  term   "Accounts   Receivable"   shall  mean  any  trade  accounts
         receivable,  notes receivable,  bid or performance  deposits,  employee
         advances,   sales  representative  advances,  and  other  miscellaneous
         receivables  associated  with the  Business and existing on the Closing
         Date and which are reflected on the Adjusted Working Capital Worksheet,
         other than receivables from an Affiliate of Seller; provided,  however,
         Accounts  Receivables  from foreign  customers  paid to an Affiliate of
         Seller shall be included in Accounts Receivables.

1.2      The term "Accrued  Expenses"  shall mean items which have not been paid
         or invoiced which entered into the determination of income on or before
         the Closing Date, which determination was made by consistently applying
         the  accounting  methods  and  principles  used  to  determine  accrued
         expenses as shown in Schedule  3.4.2,  and which are  reflected  on the
         Adjusted Working Capital Worksheet.

1.3      The  term  "Adjusted  Working Capital Worksheet" shall have the meaning
         given to it in Section 3.4.1.

                                       -1-





1.4      The term  "Affiliate"  shall mean any  company  or other  entity (i) in
         which the  designated  Party at the time in question  owns or otherwise
         controls,  directly or  indirectly,  fifty percent (50%) or more of the
         voting stock or other  indicia of equity or (ii) which now or hereafter
         owns or controls  fifty  percent  (50%) or more of the voting  stock or
         other indicia of equity of the  designated  Party.  For the purposes of
         this  definition,  stock or other indicia of equity owned or controlled
         by a Person  shall be deemed to include  all stock or other  indicia of
         equity  owned or  controlled,  directly  or  indirectly,  by any  other
         company or other legal  entity of which such  Person owns or  controls,
         directly or indirectly, fifty percent (50%) or more of the voting stock
         or other indicia of equity. For purposes of this definition,  under its
         present  ownership  structure,  Telasto shall be deemed an Affiliate of
         Seller.

1.5      The term "Agreement" shall mean this Asset Purchase Agreement.

1.6      The term  "Ancillary  Agreements"  shall mean,  collectively,  the real
         property  conveyance  described in Section 5.2.1, the personal property
         conveyance  described in Section  5.2.2,  the Assignment and Assumption
         Agreement  described in Section  5.2.3,  the  Assignment  of Trademarks
         agreements  described in Section 5.2.4, the Existing  Inventory License
         described in Section 5.2.7 and the Resin Supply Agreement  described in
         Section 5.2.8.

1.7      The term  "Assumed Contracts" shall mean the Leases and Contracts to be
         performed  after  the  Closing  Date  and that are assumed by Purchaser
         pursuant to Section 2.1.4.

1.8      The  term  "Assumed  Liabilities" shall have the meaning given to it in
         Section 4.2.

1.9      The  term  "Books  and Records"  shall have the meaning  given to it in
         Section 6.10.

1.10     The  term "BP"  shall  mean  BP  Chemicals  PlasTec  GmbH, incorporated
         under the laws of the Federal Republic of Germany.

1.11     The term  "Business"  shall mean the business of Seller's film group as
         presently  conducted  by  Seller,  including  projects  that are  being
         developed  but  only as  such  projects  exist  as of  Closing,  at the
         Facilities, to manufacture and sell Film Product, as further delineated
         in Article 2.0.

                                       -2-




1.12      The term "Closing"  shall mean the taking of the actions  described in
          Article 5.0 of this  Agreement  and "time of  Closing"  shall mean the
          time such actions are taken.

1.13      The term "Closing  Date" shall mean 12:01 a.m.,  Eastern Time, May 17,
          1999 or such other date and time as the Parties shall mutually agree.

1.14      The term "Closing  Inventory" shall mean all Inventory relating to the
          Business  owned by Seller and  located at the  Facilities,  any leased
          facilities of Seller, and any such Inventory of Seller in transit (for
          which title has not transferred to a third party) on the Closing Date.

1.15      The  term  "COBRA  Coverage"  shall  have the  meaning  given to it in
          Section 6.12.3.

1.16     The term "Code" shall mean the Internal Revenue Code of 1986, as it may
         be amended from time to time, and any successor thereto.  Any reference
         herein to a specific section or sections of the Code shall be deemed to
         include a reference to any corresponding provision of future law.

1.17      The term "Confidential Information" shall have the meaning given to it
          in Section 12.1.

1.18     The term  "Confidentiality  Agreement" shall mean that  Confidentiality
         Agreement between Seller and Purchaser attached hereto as Exhibit 1.18.

1.19      The term "DECG" shall mean Deutsche Exxon Chemical GmbH,  incorporated
          under the laws of the Federal Republic of Germany.

1.20     The term "Employee" shall mean any individual employed by Seller on the
         Closing  Date in the  conduct  of the  Business  and who is  listed  on
         Schedule  1.20(a) and any individual  employed by Seller in the conduct
         of the Business who is on  disability,  family or other leave  (whether
         contractual or statutory) from the Seller on the Closing Date as listed
         on  Schedule  1.20(b)  (both  such  Schedules  being  subject to change
         between  the date hereof and the Closing  Date).  Schedule  1.20(a) and
         Schedule 1.20(b) set forth: (i) the employment date, job title, service
         credit, original hire date, location,  hourly  salaried-indicator,  and
         form of employment  agreement  with Seller,  if any, of each person set
         forth on such  Schedules,  and  (ii)  whether  each  such  person  is a
         full-time or part-time employee of the Business, and if part-time, the

                                       -3-



         average  number of hours per week for each such  employee  during 1998.
         The  rate of pay of each  individual  listed  on  Schedule  1.20(a)  or
         Schedule  1.20(b)  has been  delivered  separately  to  Purchaser.  For
         purposes of this Section 1.20,  "part-time  employee" means an employee
         who is  employed  for an average of fewer  than  twenty  (20) hours per
         week.  Between  the date  hereof and the  Closing  Date,  Seller  shall
         promptly notify Purchaser in writing at the end of every payroll period
         between the date hereof and the Closing Date of any changes to Schedule
         1.20(a) and 1.20(b) and shall provide a final list at Closing.

1.21     The term  "Encumbrance"  shall mean any right to, or interest  in, Real
         Property,  which  subsists  in a third  party and which  constitutes  a
         claim,  lien,  charge or  liability  attached to and  binding  upon the
         property,  including,  but not limited to, a mortgage,  judgment  lien,
         mechanic's  lien,  lease,  security  interest,  option,  right of first
         refusal, easement or right-of-way.

1.22     The term  "Environmental  Assessment"  shall  mean  collectively  those
         certain  reports  prepared  for  Seller  by  Radian  International  and
         entitled "Phase I Environmental Site Assessment, Pottsville Film Plant,
         Pottsville,   Pennsylvania,  Final  Report,  October  1998,"  "Phase  I
         Environmental  Site  Assessment,  Lake Zurich Film Plant,  Lake Zurich,
         Illinois,  Final Report,  October 1998," "Phase II  Investigation  Lake
         Zurich Film Plant, Lake Zurich,  Illinois, Final Report, February 1999"
         and  "Groundwater  Investigation,  Pottsville  Film Plant,  Pottsville,
         Pennsylvania, Final Report, February 1999."

1.23     The  term  "Environmental  Law"  shall  mean  any  currently  effective
         federal,  state or local  statute,  ordinance  or  promulgated  rule or
         regulation,  any judicial or administrative  order or judgment (whether
         or not by consent),  any duties imposed by common law and any provision
         or condition of any permit,  license or other  operating  authorization
         relating to (i) the protection of (x) the environment or (y) the public
         or worker welfare from actual or potential  exposure (or the effects of
         exposure) to any actual or potential  release,  discharge,  disposal or
         emission  (whether past or present) of any Regulated  Substance or (ii)
         the manufacture,  processing,  distribution,  use, treatment, labeling,
         storage,  disposal,  transport or handling of any Regulated  Substance.
         Without  limiting the  generality of the foregoing,  Environmental  Law
         shall include the Comprehensive Environmental Response Compensation and
         Liability Act,

                                       -4-



         the Clean Air Act, the Clean Water Act, the Resource  Conservation  and
         Recovery Act, the Endangered  Species Act, the Occupational  Safety and
         Health Act, the Federal Insecticide, Fungicide and Rodenticide Act, the
         Hazardous Materials  Transportation Act, the Surface Mining Control and
         Reclamation  Act, the Emergency  Planning and  Community  Right to Know
         Act, the Safe Drinking Water Act, the Toxic Substances Control Act, the
         Atomic  Energy Act,  the Coastal  Zone  Management  Act,  the  National
         Environmental  Policy  Act,  the Noise  Control  Act,  and any  similar
         federal,  state or local  statutes,  ordinances,  rules and regulations
         promulgated under such statutes or ordinances.

1.24     The term "Environmental  Loss" shall mean the "Purchaser  Environmental
         Loss" and/or the "Seller Environmental Loss," as the context requires.

1.25     The term "ERISA" shall mean the Employee Retirement Income Security Act
         of 1974, as amended.

1.26     The term "ERISA Plans" shall mean any employee  benefit plan as defined
         in Section 3(3) of ERISA.

1.27     The term  "Excluded  Assets"  shall  mean  those  assets  which are not
         included in the sale contemplated  hereby and as are further defined in
         Section 2.3.

1.28     The  term  "Existing  Inventory  License"  shall  mean  that  agreement
         attached hereto as Exhibit 5.2.7.

1.29     The term  "Exxon/Ancon  Policy(ies)"  shall  mean any and all  property
         and/or   liability   insurance   coverage   policies  issued  to  Exxon
         Corporation and/or its Affiliates,  including without  limitation,  any
         property and/or liability  insurance  coverage policies issued to Exxon
         Corporation and/or its Affiliates by Ancon Insurance  Company,  Inc., a
         Vermont  corporation,  or its  predecessor  companies,  or  issued by a
         locally  admitted  insurer and  reinsured by Ancon  Insurance  Company,
         Inc., or its predecessor companies.

1.30     The term "Exxon Chemical" shall mean Exxon Chemical Company, a division
         of Exxon Corporation.

                                       -5-



1.31     The term "Facilities" shall mean Seller's plants and properties at Lake
         Zurich, Illinois and Pottsville, Pennsylvania used in the Business, and
         specifically excludes the offices at Buffalo Grove, Illinois.

1.32     The term "Film  Product" shall mean the film products  manufactured  at
         the Facilities.

1.33     The term "Financial Statements" shall mean the unaudited balance sheets
         of the  Business  as of  December  31,  1997 and  1998,  the Pro  Forma
         Unaudited  Balance  Sheets as of December  31,  1997 and 1998,  and the
         unaudited  statements of operating income and the unaudited  statements
         of operating  cash flow  ("EBITDA") of the Business for the years ended
         December  31,  1996,  1997 and 1998 and the last  twelve  months  ended
         February 28, 1999, all of which are attached hereto as Schedule 1.33.

1.34     The term "Finished  Inventory" shall mean that part of the inventory of
         the Business  owned by Seller  processed for sale to customers  meeting
         Seller's  applicable sales  specifications,  located at the Facilities,
         any  facilities  leased by Seller,  or any such  Inventory of Seller in
         transit (for which title has not been  transferred to a third party) on
         the Closing Date.

1.35     The term "GAAP" shall mean generally accepted accounting principles, as
         in effect in the United States on the date hereof.

1.36     The  term  "HSR  Act"  shall  mean  the   Hart-Scott-Rodino   Antitrust
         Improvements Act of 1976, as amended, 15 U.S.C. Sec. 18a, and the rules
         promulgated thereunder.

1.37     The term "Indemnified  Liabilities"  shall mean,  collectively,  Seller
         General  Liabilities,   Seller  Environmental  Liabilities,   Purchaser
         General Liabilities and Purchaser Environmental Liabilities.

1.38     The term  "Indemnified  Party"  shall mean either a Seller  Indemnified
         Party or a Purchaser Indemnified Party, as the context so requires.

1.39     The term "Inventory" shall mean, collectively,  the Finished Inventory,
         Work-In- Process, Rework Material,  Supplies Inventory,  Raw Materials,
         and Scrap  Material  and which is  reflected  on the  Adjusted  Working
         Capital Worksheet.

                                       -6-



1.40     The term  "Knowledge"  shall mean the actual knowledge after reasonable
         inquiry of a particular  fact by (i) in the case of Seller,  any of the
         persons  listed in Schedule  1.40(a) (key  management of the Business),
         subject,  however,  to the specific  section  limitations,  if any, set
         forth in that Schedule for a particular  person and (ii) in the case of
         Purchaser,  any of the  persons  listed in Schedule  1.40(b),  subject,
         however, to the specific section limitations, if any, set forth in that
         Schedule for a particular person.

1.41     The term "Lake Zurich  Facility" shall mean Seller's plant and property
         located at 351 North Oakwood Road, Lake Zurich, Illinois 60047-1562.

1.42     The  term  "Leases  and  Contracts"  shall  mean all  written  and oral
         executory contracts, leases of machinery,  equipment and other personal
         property, sales orders, purchase orders, service contracts,  consulting
         contracts,  options,  guarantees,  commitments,  instruments  and other
         agreements  in  effect  as of the  Closing  Date  relating  solely  and
         exclusively to the Business, but shall not include any Excluded Assets.
         Schedule  1.42 sets forth all Leases  and  Contracts,  other than those
         that by their terms  expire  prior to the Closing  Date,  that  involve
         aggregate  financial  commitments  by  Seller,  or by a third  party to
         Seller, of more than  Seventy-Five  Thousand Dollars ($75,000) per year
         (except for Film Product  sale or Raw  Materials  purchase  commitments
         from a single order unless such order  involves a financial  commitment
         of more than  Seventy-Five  Thousand  Dollars  ($75,000)  or unless the
         aggregate  orders  from a single  customer  or  supplier  exceeded  Two
         Hundred Fifty Thousand  Dollars  ($250,000) in 1998) by parties,  date,
         term, amount of payment made for the period January 1, 1998 to December
         31, 1998,  type of good,  service  obligation  or  commitment,  and any
         covenant or other restriction  preventing or limiting Seller's right to
         assign its rights thereunder.

1.43     The term "Losses" shall mean all losses,  costs,  claims,  liabilities,
         fines, penalties,  judgments,  awards, damage, expense (including costs
         of  investigation  and  defense  and  reasonable  attorneys'  fees  and
         expenses),  in any such case  whether or not  involving  a  third-party
         claim, including, without limitation, all payments made or damages paid
         to third parties, the amount of any write-offs where such equipment has
         been disposed of or scrapped or write-downs in accordance with GAAP and
         the costs of acquiring replacement properties,  commercially reasonable
         or court awarded

                                       -7-



         payments  to  vendors  and  other   parties   under   contracts  or  to
         governmental  authorities  and  expenses  arising  from  mitigation  of
         damages,  but  after  taking  into  account  the  net  benefits  of any
         insurance  proceeds  received  by  the  Person  incurring  the  Losses.
         However, except as specified in the preceding sentence,  "Losses" shall
         not include any  consequential  or incidental  damages or lost profits,
         and the parties hereto waive any right to make a claim pursuant to this
         Agreement  based  on a  contrary  position.  To  the  extent  that  any
         particular  Loss  falls  within  more  than one  category  within  this
         definition,  no amount of such Loss may also be recovered under another
         category within this definition.

1.44     [RESERVED]

1.45     The term "Material" or "Materially" shall mean, within the context of a
         Section in which it is used, an impact of One Hundred  Thousand Dollars
         ($100,000)  or  more in the  aggregate  for  all of  such  Section,  as
         applicable.

1.46     The term "Party" shall mean either  Seller or Purchaser,  individually,
         as the context so requires,  and the term  "Parties"  shall mean Seller
         and Purchaser together.

1.47     The term "Payables" shall mean any of the accounts  payable  associated
         with the  Business on the Closing  Date,  other than to an Affiliate of
         Seller,  and  which  are  reflected  on the  Adjusted  Working  Capital
         Worksheet.

1.48     The term "Pro Forma Unaudited  Balance Sheets" shall mean the unaudited
         balance  sheets  of the  Business  as of  December  31,  1997 and 1998,
         restated  to reflect any  adjustments  required  under this  Agreement,
         attached hereto as part of Schedule 1.33.

1.49     The  term  "Payroll  Practices/Employee  Arrangements"  shall  have the
         meaning given to it in Section 6.12.1.

1.50     The term "Permits" shall have the meaning given to it in Section 6.7.

1.51     The term  "Permitted  Encumbrances"  shall mean those  Encumbrances  as
         specifically set forth on Schedule 1.51 hereto.


                                       -8-



1.52     The term  "Person"  shall mean any  individual,  corporation,  company,
         limited  or  general  partnership,  trust  or  estate,  joint  venture,
         association or other entity.

1.53     The term  "Pottsville  Facility" shall mean Seller's plant and property
         located at Maple Avenue, Mar-lin, Pennsylvania 17951-0160.

1.54     The term  "Prepaid  Expenses"  shall mean  payments  made by Seller for
         items  which  will  enter into the  determination  of income  after the
         Closing Date and which are  reflected on the Adjusted  Working  Capital
         Worksheet to the extent the benefits of such payments are  transferable
         to Purchaser.

1.55     The term "Purchase Price" shall have the meaning given to it in Section
         3.1.1.

1.56     The term  "Purchased  Assets"  shall  have the  meaning  given to it in
         Section 2.1.

1.57     The term "Purchaser" shall have the meaning given to it in the preamble
         of this Agreement.

1.58     The term "Purchaser  Environmental  Liabilities" shall have the meaning
         given to it in Section 14.6.3.

1.59     The term "Purchaser Environmental Loss" shall have the meaning given to
         it in Section 14.6.1.

1.60     The term "Purchaser  General  Liabilities" shall have the meaning given
         to it in Section 14.4.

1.61     The term "Purchaser  Indemnified Party" shall have the meaning given to
         it in Section 14.2.

1.62     The  term  "Raw  Materials"  shall  mean  any  material  that  could be
         incorporated into Film Product during the manufacturing,  finishing and
         packaging process, excluding Rework Material or Scrap Material.

1.63     The term "Real  Property"  shall mean the Real Property  Leased and the
         Real Property Owned, collectively.

                                       -9-



1.64     The term "Real Property  Leased" shall mean the real property leased by
         Seller in connection  with the Business,  which will be  transferred to
         the Purchaser, as more fully described in Schedule 1.64 hereto.

1.65     The term "Real  Property  Owned" shall mean the real property  owned by
         Seller in Lake Zurich, Illinois and Pottsville,  Pennsylvania, and used
         in  connection  with the  Business as more fully  described in Schedule
         1.65(a) and Schedule 1.65(b) hereto.

1.66     The  term  "Regulated  Substance"  shall  mean any  substance  which is
         identified  and regulated (or the clean-up of which can be required) by
         any   Environmental   Law.  Without  limiting  the  generality  of  the
         foregoing,  Regulated  Substances shall include (i) "hazardous wastes,"
         "hazardous     substances,"    "toxic    substances,"     "pollutants,"
         "contaminants"  or  other  similar   identified   designations  in,  or
         otherwise  subject to regulation  under,  any  Environmental  Law; (ii)
         petroleum,  refined petroleum products and any such substances in their
         virgin,  used or waste state;  and (iii) any  substance in Subpart Z of
         the regulations  promulgated  under the Occupational  Safety and Health
         Act, as amended.

1.67     The  term  "Retained   Liabilities"  shall  mean  all  liabilities  and
         obligations of Seller,  whether such liabilities and obligations relate
         to  payment,  performance  or  otherwise,  arise  before  or after  the
         Closing, are matured or unmatured, are known or unknown, are contingent
         or non-contingent, are fixed or undetermined, or are present, future or
         otherwise,  other than the  Assumed  Liabilities.  All of the  Retained
         Liabilities  shall  remain  the  sole  responsibility  of and  shall be
         retained,   paid,   performed   and   discharged   solely  by   Seller.
         Notwithstanding  anything to the contrary contained herein, and without
         limiting the foregoing,  the following  liabilities  and obligations of
         Seller shall be  considered  Retained  Liabilities  for the purposes of
         this Agreement:

         (i)      any liability of, or claim against,  Purchaser relating to the
                  Business to the extent it arises from events  occurring  prior
                  to the  Closing  Date of any  kind,  other  than  the  Assumed
                  Liabilities  or  those  liabilities  and  claims  as to  which
                  Purchaser  has agreed to indemnify  Seller under  Article 14.0
                  hereof;

         (ii)     any liability or obligation  under any Assumed  Contract which
                  arises  after the Closing  Date to the extent it arises out of
                  or relates to any breach by Seller  that  occurred  before the
                  Closing Date;

                                      -10-



         (iii)    any liability or obligation  for (A) Seller's Taxes arising as
                  a result of Seller's operation of its business or ownership of
                  the  Purchased  Assets  before  the  Closing  Date  except  as
                  included in the Accrued  Expenses,  and (B) deferred  Taxes of
                  Seller of any nature;

         (iv)     any  liability  for  vacation  entitlement earned for 1998 and
                  prior years for  any Employee  who  becomes  a Hired Employee;

         (v)      any  liability  or   obligation   arising  out  of  any  legal
                  proceeding  pending as of the Closing Date, whether or not set
                  forth  in  Schedule  6.8  or  6.9,  or  any  legal  proceeding
                  commenced  after the Closing  Date to the extent it arises out
                  of, or relates to, any  occurrence or event  happening  before
                  the Closing Date;

         (vi)     Wauconda Sand and Gravel  Federal  Superfund site in Wauconda,
                  Illinois,  except to the extent Purchaser has placed or places
                  anything at said site; and

         (vii)    any liability or obligation of Seller based upon Seller's acts
                  or  omissions  occurring  after the  Closing  Date,  except as
                  relates to the liabilities and obligations  that Purchaser has
                  expressly agreed to assume under the Transaction Documents.

1.68     The  term  "Rework  Material"  shall  mean  off-specification  material
         located at the  Facilities  not  meeting  the  definition  of  Finished
         Inventory but which has been or is designated for reprocessing  through
         the erema or similar outside process,  and which,  based on a technical
         assessment  agreed to by the  Parties,  may be  blended  into  Finished
         Inventory or sold at a discounted selling price.

1.69     The term "Scrap Material" shall mean off-specification material located
         at the  Facilities  which  does  not  meet  the  definition  of  Rework
         Material.

1.70     The term "Seller" shall have the meaning given to it in the preamble of
         this Agreement.

1.71     The term  "Seller  Environmental  Liabilities"  shall have the  meaning
         given to it in Section 14.6.1.

1.72     The term "Seller Environmental Loss" shall have the meaning given to it
         in Section 14.6.3.

                                      -11-



1.73     The term "Seller General  Liabilities"  shall have the meaning given to
         it in Section 14.2.

1.74     The term "Seller  Indemnified Party" shall have the meaning given to it
         in Section 14.4.

1.75     The term "Seller's  Proprietary  Information"  shall mean (i) Knowledge
         about and/or documents  containing  operating,  financial and technical
         information  relating to commercial  activities,  business  ventures or
         investments  or extensions  of existing  Business  activities  into new
         areas or plans to divest or disengage existing Business  activities and
         assessments of Seller's  competitive  position with the Business to the
         extent such knowledge or documents relate to activities of Seller other
         than the Business;  provided,  however,  Seller shall disclose to Buyer
         the portion of such  Knowledge or  documents  as relates  solely to the
         Business,  (ii)  commercial  data or technical  information  in any way
         related to any of  Seller's  operations  or  businesses  other than the
         Business; (iii) records relating to Seller's evaluation of the purchase
         and sale of the Business and the Purchased Assets; (iv) position papers
         on  public  issues  which  are  approved  for  internal  use  only  and
         strategies relating to external communication of policies together with
         information  and research  reports,  software,  training  materials and
         operating  manuals  not  specifically  prepared  for the conduct of the
         Business by Seller, and (v) any information or documents related to the
         Business that is subject to a third party confidentiality agreement and
         the Seller  cannot get the consent of such third party to release  such
         information or document to Purchaser.

1.76     The term "Supplies  Inventory"  shall mean product  packaging  material
         (pallets,  cores,  overwrap film, etc.) and  miscellaneous  maintenance
         materials, excluding capital spares.

1.77     The term  "Surveys"  shall  have  the  meaning  given to it in  Section
         8.1.14.

1.78     The term "Targeted  Working Capital" shall have the meaning given to it
         in Section 3.1.1.

1.79     The term "Taxes" shall mean all taxes, duties, charges, fees, levies or
         other assessment  imposed by any taxing authority,  including,  without
         limitation, income, gross receipts,  value-added,  excise, withholding,
         personal property, real estate, sale,

                                      -12-



         use, ad valorem, license, lease, service,  severance,  stamp, transfer,
         payroll,  employment,  customs,  duties,  alternative,  add-on minimum,
         estimated and franchise  taxes  (including  any interest,  penalties or
         additions  attributable  to or imposed  on or with  respect to any such
         assessment).

1.80     The term "Technology  License  Agreement" shall mean those intellectual
         property  transfer  and license  agreements  pursuant to which  certain
         intellectual  property  assets are made  available to the  Purchaser in
         accordance with the agreement attached hereto as Exhibit 5.2.5.

1.81     The term  "Telasto"  shall mean  Telasto  Folien  GmbH,  a German joint
         venture between  Deutsche Exxon Chemical GmbH and BP Chemicals  PlasTec
         GmbH,  more fully  described in that certain  Joint  Venture  Agreement
         dated September 27, 1994 between DECG and BP.

1.82     The term  "Title  Commitments"  shall have the  meaning  given to it in
         Section 8.1.13.

1.83     The term "Tonen Affiliate" shall mean Tonen Corporation and any company
         or other entity (i) in which Tonen  Corporation at the time in question
         owns or otherwise controls, directly or indirectly, one hundred percent
         (100%) of the voting stock or other indicia of equity or (ii) which now
         or hereafter owns or controls one hundred  percent (100%) of the voting
         stock or other indicia of equity of Tonen Corporation. For the purposes
         of  this  definition,  stock  or  other  indicia  of  equity  owned  or
         controlled  by a Person  shall be deemed to include  all stock or other
         indicia of equity owned or controlled,  directly or indirectly,  by any
         other  company  or other  legal  entity of which  such  Person  owns or
         controls,  directly or  indirectly,  one hundred  percent (100%) of the
         voting stock or other indicia of equity.

1.84     The  term  "Trademark   Agreements"   shall  mean  that  Assignment  of
         Trademarks  from Exxon  Corporation  to  Purchaser  attached  hereto as
         Exhibit  5.2.4(a) and that Assignment of Trademarks from Esso (Schweiz)
         to Purchaser attached hereto as Exhibit 5.2.4(b).

1.85     The  term  "Transaction  Documents"  shall  mean  this  Agreement,  the
         schedules and exhibits attached hereto, the Ancillary  Agreements,  and
         the other documents and

                                      -13-







         certificates  delivered  pursuant  to this  Agreement,  but  shall  not
         include the Technology License Agreement.

1.86     The term "Work-in-Process" shall mean partially completed Film Product,
         including intermediates, not yet ready for sale.

1.87     The  term  "Working  Capital"  shall  have the  meaning  given to it in
         Section 3.4.2.

2.0      TRANSFER OF ASSETS AND PROPERTIES

2.1      Purchased Assets.

         Subject to the terms and conditions of this Agreement, Seller shall, or
         cause its Affiliates to, sell, convey, assign,  transfer and deliver to
         Purchaser,  free and clear of all Encumbrances  whatsoever  (other than
         Permitted  Encumbrances) and Purchaser shall purchase from Seller,  the
         Business as a going concern and all the assets,  properties  and rights
         owned or leased by Seller  used,  or held for use,  exclusively  in the
         Business  and all assets  owned or leased by Seller and  located on the
         Real Property (the  "Purchased  Assets") as the same shall exist at the
         Closing  Date  (other than the  Excluded  Assets),  including,  without
         limitation, the following:

         2.1.1    Real Property Owned.

                  The  Real  Property  Owned,  together  with  (i)  all  rights,
                  privileges,   easements,  licenses,  hereditaments  and  other
                  appurtenances  relating  thereto and (ii)all right,  title and
                  interest  of  Seller  in  and to  the  buildings,  structures,
                  improvements, paved parking areas and fixtures located on such
                  real estate;

         2.1.2    Real Property Leased.

                  All  of  Seller's  interest, as  lessee, in  the Real Property
                  Leased as set out on Schedule 1.64;

         2.1.3    Equipment, Machinery and Other Tangible  Personal Property.

                  All machinery,  equipment,  tools, tooling, dies, molds, spare
                  parts, leasehold improvements,  trucks, automobiles, supplies,
                  office furniture and office equipment,  laboratory  equipment,
                  and computing and telecommunications

                                      -14-


                  equipment,  together with all other items of personal property
                  located on the Real  Property  Owned which are owned by Seller
                  and  used  exclusively  in the  performance  of  the  Business
                  including,   without  limitation,  those  items  described  in
                  Schedule 2.1.3(a) hereto, and those items of personal property
                  not  located  on the Real  Property  Owned  which are owned or
                  leased by Seller and used  exclusively  in the  performance of
                  the  Business,  including,  without  limitation,  those  items
                  described  in Schedule  2.1.3(b)  hereto,  except for, in each
                  case,  Inventory  or  other  personal  property   specifically
                  subject to another  subsection  of Section 2.1 or Section 2.3,
                  or that are disposed of in the ordinary course of the Business
                  between  the  date of this  Agreement  and the  Closing  Date;
                  provided  that  Seller  may  revise  or  supplement   Schedule
                  2.1.3(a)  or  Schedule  2.1.3(b)  at any time on or before the
                  time of Closing; and provided,  further, that no such revision
                  or supplement  shall change such Schedule so as to reflect any
                  information  which in the aggregate is  Materially  adverse to
                  the  Purchaser.  Schedule  2.1.3(a)  will  be  prepared  as of
                  December 31, 1998,  together with a list of projects which may
                  result in additions or deletions to such Schedule 2.1.3(a);

         2.1.4    Contracts Relating to the Business.

                  Subject to any consent  requirements  and, except where Seller
                  has indicated on Schedule 1.42 or Schedule 6.15.8, it will not
                  be  assigned,  all of the interest of Seller in the Leases and
                  Contracts.  Seller  and  Purchaser  agree to use  commercially
                  reasonable  efforts  (without any  requirement  on the part of
                  Seller or Purchaser to pay any money or agree to any change in
                  the terms of any such lease or contract) to obtain the consent
                  of any third party thereto to the assignment of any such Lease
                  or Contract to Purchaser in all cases in which such consent is
                  or may be  required  for such  assignment.  Subject to Section
                  10.9 hereof, if any such consent shall not be obtained, Seller
                  agrees  to  cooperate  with  Purchaser  in  any   commercially
                  reasonable  arrangement  designed to provide to Purchaser  the
                  benefits  intended  to be  assigned  to  Purchaser  under  the
                  relevant Lease or Contract,  including enforcement at the cost
                  and for the  account  of  Purchaser  of any and all  rights of
                  Seller  against  the third  party  thereto  arising out of the
                  breach or cancellation  thereof by such third party. If and to
                  the extent that such arrangement cannot be made,

                                      -15-



                  Purchaser,  upon  notice to Seller,  shall have no  obligation
                  pursuant to Section  3.1.2 or  otherwise  with  respect to any
                  such Lease or Contract  and any such Lease or  Contract  shall
                  not be deemed to be an Assumed  Contract  or  Purchased  Asset
                  hereunder;

         2.1.5    Customer  Lists,  Sales  and Marketing Materials, and Business
     `            Plans.

                  All  customer   lists,   sales  data,   catalogs,   brochures,
                  suppliers'  names,  mailing lists, art work, the environmental
                  reports referenced in clause (iv) of Section 6.26, photographs
                  and  advertising  material  which are used  exclusively in the
                  Business,   whether  in  electronic  form  or  otherwise,  and
                  documents containing  operating,  technical (to the extent not
                  covered by the Technology  License  Agreement),  and financial
                  information relating  exclusively to commercial  activities of
                  the Business, ventures,  investments or extensions of existing
                  Business  activities and  assessments of Seller's  competitive
                  position  with the Business,  unless  subject to a third party
                  confidentiality  agreement as to which Seller  cannot obtain a
                  consent from such third party to release such  information  to
                  Purchaser;

         2.1.6    Permits; Licenses.

                  Subject  to  Section  2.3.13,  all  of  Seller's  interest  in
                  governmental permits, licenses,  registrations,  certificates,
                  consents,  orders and approvals  applicable to and used in the
                  conduct of the Business to the extent such permits,  licenses,
                  registrations,  certificates,  consents,  orders and approvals
                  are  transferable to Purchaser,  and all waivers or variances,
                  if any,  of any  requirements  pertaining  to  such  licenses,
                  permits,  registrations,  certificates,  consents,  orders and
                  approvals  to  the  extent  such  waivers  or  variances   are
                  transferable to Purchaser;

         2.1.7    Property, Personnel and Accounting Records.

                  Subject to Section 2.3 and Section 12.7,  all other records of
                  Seller  relating   exclusively  to  the  Business,   including
                  property records and copies of personnel  records of Employees
                  who become employees of Purchaser;

                                      -16-



         2.1.8    Goodwill.

                  All right, title and interest of Seller in and to the goodwill
                  incident to the Business;

         2.1.9    Inventory.

                  All Inventory relating to the Business existing at the Closing
                  Date,  including  such  Inventory  not  located  on  the  Real
                  Property Owned which is described in Schedule 2.1.9 hereto;

         2.1.10   Accounts Receivable.

                  All  Accounts  Receivable relating to the Business existing at
                  the Closing Date;

         2.1.11   Prepaid Expenses.

                  All Prepaid Expenses,  other than prepaid insurance  premiums,
                  of, or for the  benefit  of,  the  Business,  including  those
                  described in Schedule 2.1.11;

         2.1.12   Business Application Computer Software.

                  All copies at the Facilities of business application software,
                  owned or licensed by Seller that are used  specifically in the
                  Business at the Facilities or residing on the computers listed
                  on  Schedule  2.1.3(b)  prior to the  Closing  Date  for:  (a)
                  general  business   applications  such  as  accounting,   word
                  processing,   graphics,   and  spreadsheet  analysis;  or  (b)
                  specific business  applications unique to the Business such as
                  Film  Product  marketing  and  shipping   software;   and  (c)
                  operating  systems,   security  software,  and/or  programming
                  software  used in  connection  with the  business  application
                  software within this Section  2.1.12(a) or Section  2.1.12(b).
                  Business  application  software  excluded  from  this  Section
                  2.1.12 is listed on Schedule 2.1.12;

         2.1.13   Customer Confidentiality Agreements.

                  Subject to any consent  requirements,  all of the  interest of
                  Seller in the Customer  Confidentiality  Agreements  listed on
                  Schedule   2.1.13.   Seller   and   Purchaser   agree  to  use
                  commercially reasonable efforts (without any

                                      -17-



                  requirement  on the part of  Seller  or  Purchaser  to pay any
                  money or agree to any  change in the terms of such  agreement)
                  to obtain  the  consent  of any  third  party  thereto  to the
                  assignment of any such confidentiality  agreement to Purchaser
                  in all cases in which such consent is or may be required;

         2.1.14   Other Intangible Assets.

                  Subject to  Section  2.3 and  except as  otherwise  covered in
                  Section 2.2, all other assets (including all causes of action,
                  rights of action,  contract  rights and  warranty  and product
                  liability claims against third parties not in litigation as of
                  the  Closing  Date)  relating  solely and  exclusively  to the
                  Business and not  contained  within the  categories  described
                  above.

2.2      Intellectual Property.

         Subject to Section  2.3.3 and 2.3.7,  the  intellectual  property  made
         available to the Purchaser, including but not limited to, all technical
         information and data, patents,  patent applications,  computer software
         covered by the Technology License Agreement, copyrights and trademarks,
         including  all  covenants,  representations,  warranties  and all other
         obligations  relating  thereto,  are governed  solely by the provisions
         contained  in  the  Technology  License  Agreement  and  the  Trademark
         Agreements  and shall not be  considered  a  Purchased  Asset under the
         terms of this Agreement.

2.3      Excluded Assets.

         The following  assets  (collectively,  the "Excluded  Assets") shall be
         excluded from this Agreement,  and shall not be assigned or transferred
         to Purchaser:

         2.3.1    To the extent not  reflected on the Adjusted  Working  Capital
                  Worksheet  as  a  Prepaid  Expense,   any  insurance  policies
                  maintained  by Seller  with  respect to the  Business,  unless
                  otherwise specifically assigned to Purchaser;

         2.3.2    All accounts  receivable from Affiliates of Seller,  including
                  deferred  intercompany  items,  existing on the  Closing  Date
                  whether or not then due and other receivables not reflected on
                  the Adjusted Working Capital Worksheet;

                                      -18-



         2.3.3    Any right, title or interest in the names "Exxon  Corporation"
                  and  "Exxon   Chemical   Company"  or  any  variants   thereof
                  containing  the name  "Exxon" or the double "xx" in any of the
                  related  logos,  trademarks,  trade  names  or  service  marks
                  incorporating such names or any variant thereof which are used
                  by the Business,  except as otherwise specifically assigned or
                  transferred   to   Purchaser   by  Seller  in  the   Trademark
                  Agreements;

         2.3.4    Cash and cash equivalents or similar type investments, such as
                  certificates of deposit,  treasury bills and other  marketable
                  securities,  and  bank  accounts,  but  excluding  any  bid or
                  performance  deposits  included in the  definition of Accounts
                  Receivable;

         2.3.5    All  Leases  and  Contracts  that  are not  Assumed  Contracts
                  pursuant to Section  2.1.4 and  consulting  contract not to be
                  assumed;

         2.3.6    The consideration paid to Seller pursuant to this Agreement;

         2.3.7    Seller's  Proprietary  Information  and any other  proprietary
                  manuals, documentation and other media belonging to, or issued
                  by,  Exxon  Corporation  or one  or  more  of its  Affiliates,
                  including,  but not  limited  to, SMC Basic  Standards,  Exxon
                  Accounting   Manual,   SMC  Computing  and   Telecommunicating
                  Standards,  Exxon Research and Engineering  Design  Standards,
                  Safety Management Practices/Environmental Management Practices
                  documentation,  and Operations Integrity Management Practices,
                  or  any  other  procedures  to  the  extent  such  proprietary
                  information  was not developed for or used  exclusively in the
                  Business; provided, that the foregoing shall not affect in any
                  way  Purchaser's  operation of the Business after the Closing,
                  which shall be conducted in such manner as  determined  in the
                  sole  discretion  of  Purchaser.   Any  excluded   proprietary
                  manuals, documentation and other media other than as mentioned
                  in this Section and  physically  located on the Real  Property
                  Owned is listed on Schedule 2.3.7;

         2.3.8    Assets  constituting any pension funds or segregated funds for
                  the benefit of Employees,  e.g.,  thrift and 401(k) plans, and
                  any claims for  insurance  or any other  funding  vehicle  for
                  employee benefit plans;

                                      -19-



         2.3.9    Medical  records of Employees other than records that are part
                  of  mandated  industrial  hygiene  programs  of the  Business,
                  unless the Employee otherwise consents in writing to copies of
                  such records being given to Purchaser;

         2.3.10   Corporate minute books and stock books;

         2.3.11   Any  claims  and  rights  against  third  parties  (including,
                  without limitation,  insurance  carriers),  to the extent they
                  relate to liabilities or obligations  which are not assumed by
                  Purchaser hereunder (except to the extent Purchaser shall have
                  incurred  costs and  expenses  with respect to such claims and
                  rights);

         2.3.12   Claims for refunds of Taxes and other governmental  charges to
                  the extent such refunds  relate to periods ending prior to the
                  Closing Date;

         2.3.13   The  assets  described  or  referred  to in  Schedule  2.3.13,
                  Certain Excluded Assets;

         2.3.14   Any and all  Exxon/Ancon  Policies,  which  policies  shall be
                  deemed terminated, commuted and canceled ab initio;

         2.3.15   Any and all  capital to fund after the Closing  Date  projects
                  under development as of the Closing Date; and

         2.3.16   Except as otherwise  provided herein, all assets of Seller not
                  associated exclusively with the Business.

3.0      CONSIDERATION AND TERMS

3.1      Consideration for Purchased Assets.

         3.1.1    Subject  to  any  adjustments  pursuant  to  Section  3.4  the
                  aggregate  monetary  consideration  to be paid by Purchaser to
                  Seller for the Purchased  Assets (the "Purchase  Price") shall
                  consist of a cash  payment  in the  amount of (i) One  Hundred
                  Seventy-Seven      Million      Two      Hundred      Thousand
                  Dollars($177,200,000)  plus  (ii)  the  dollar  amount  of the
                  Targeted  Working Capital in the amount of Twenty-Two  Million
                  Eight Hundred  Thousand  Dollars($22,800,000)  (the  "Targeted
                  Working Capital") subject to the terms,

                                      -20-




                  conditions and adjustments set forth in Section 3.4 less (iii)
                  the amount determined  pursuant to Section 4.5.4 and plus (iv)
                  the amount determined pursuant to Section 3.7.

         3.1.2    Purchaser also shall assume the Assumed Liabilities.

3.2      Payment of Consideration.

         Subject to the terms and conditions of this Agreement:

         3.2.1    At  the  Closing,  or as  otherwise  agreed,  Purchaser  shall
                  deliver to Seller by wire  transfer the  aggregate  amount due
                  under Section  3.1.1,  subject to any  adjustment  pursuant to
                  Section 3.4.

         3.2.2   Any wire transfer of funds by Purchaser shall be in immediately
                 available  funds and shall be sent to Seller's  bank account as
                 follows,  or to such other bank within the  continental  United
                 States as Seller may have designated by at least three (3) days
                 notice to Purchaser:

                           Mellon Bank, N.A.
                           Pittsburgh, Pennsylvania
                           Federal Routing No. 043000261
                           For Credit to Exxon Chemical Company
                           Houston, Texas
                           Account No. 198-5825

3.3      Allocation of Purchase Price.

         The Parties agree that the fair market  values of the Purchased  Assets
         will be reflected in Schedule 3.3. Subject to any adjustments  pursuant
         to Section 3.4, the Parties further agree that the Purchase Price (plus
         that portion of the amount of assumed liabilities  constituting part of
         the amount realized by Seller for federal income tax purposes) shall be
         allocated based upon the fair market values of the Purchased  Assets as
         reflected  in  Schedule  3.3,  which   allocation   conforms  with  the
         requirements  of  Section  1060 of the Code and  temporary  regulations
         thereunder.  Purchaser,  at its sole  cost  and  expense,  may  conduct
         appraisals  of the  Purchased  Assets,  which,  subject to the Parties'
         agreement,  will be used to determine the values  reflected in Schedule
         3.3.  Each  Party  agrees  not to assert,  in  connection  with any tax
         return,  filing,  report  or  similar  filing,  tax  audit  or  similar
         proceeding, any allocation

                                      -21-




         of the Purchase  Price (plus that portion of such amount of the assumed
         liabilities)that differs from Schedule 3.3, as adjusted as necessary to
         reflect any adjustment pursuant to Section 3.4.

3.4      Certain Price Adjustments.

         3.4.1    On or as soon as  practicable  following the Closing Date, but
                  not later than sixty (60) days  thereafter,  the Parties shall
                  jointly  determine the actual amount of the Working Capital as
                  of the  Closing  Date  and  shall  execute  a  certificate(the
                  "Adjusted  Working Capital  Worksheet") in the form of Exhibit
                  3.4.1  hereto  setting  forth the final  dollar  amount of the
                  Working  Capital.  If the dollar amount of the Working Capital
                  as reflected on the Adjusted Working Capital Worksheet exceeds
                  Targeted  Working  Capital  by more  than  $250,000,  then the
                  Purchaser  shall pay in cash to Seller the full amount of such
                  excess over Targeted Working Capital.  If the dollar amount of
                  the  Working  Capital as  reflected  on the  Adjusted  Working
                  Capital  Worksheet is below Targeted  Working  Capital by more
                  than $250,000,  then Seller shall pay in cash to Purchaser the
                  full amount of such deficit from Targeted Working Capital.

         3.4.2    For purposes of this  Agreement,  "Working  Capital"  shall be
                  determined  as of the  Closing  Date  using,  on a  consistent
                  basis, the accounts, accounting methods and principles used in
                  the  preparation  of Schedule  3.4.2,  including the aggregate
                  dollar value  represented  by (i) the aggregate  book value of
                  the Accounts  Receivable (net of a "bad debt" allowance of One
                  Hundred Eighty Thousand  Dollars $180,000 and exclusive of any
                  Accounts  Receivable  from any Affiliate of Seller),  (ii) the
                  value of the  inventory  on the  Closing  Date  determined  by
                  consistently  applying the  accounting  methods and principles
                  used to value  inventory  in  Schedule  3.4.2  and  (iii)  any
                  Prepaid Expenses,  less(x) Payables  exclusive of any Payables
                  due to any  Affiliate of Seller and  (y)Accrued  Expenses.  In
                  order for the Parties to complete the Adjusted Working Capital
                  Worksheet, the Parties shall, immediately prior to the Closing
                  Date, jointly determine,  based on a physical inventory (taken
                  by  Seller  and  observed  by  Purchaser),  the  quantity  and
                  category,  but not the dollar value, of the Closing Inventory.
                  Notwithstanding the foregoing, Working Capital for

                                      -22-



                  purposes of this Section 3.4.2 shall exclude any payments made
                  on equipment and  liabilities  related to the FemCare  project
                  for Procter & Gamble.

         3.4.3    In the  event the  Parties  fail to reach  written  agreement,
                  within sixty (60) days after the Closing Date, with respect to
                  the  determination  of the amount of the Working Capital as of
                  the  Closing  Date,  then the  Parties  shall  (i)  retain  as
                  arbitrator  Ernst & Young,  LLP or, failing their agreement to
                  act as arbitrator,  such other independent  accounting firm as
                  may be  mutually  agreed  upon by the  Parties to review  such
                  matters as to which written agreement has not been reached and
                  (ii)   request   such   arbitrator   to  act  as  promptly  as
                  practicable, but no later than thirty (30) days to resolve the
                  matters in dispute in  accordance  with this  Agreement.  Upon
                  resolution by such arbitrator to its  satisfaction of all such
                  disputed  matters,  such arbitrator shall cause to be prepared
                  and shall deliver to the Parties a certificate  in the form of
                  Exhibit 3.4.1 hereto. The decision of such arbitrator shall be
                  final,  non-  appealable  and binding on Seller and Purchaser,
                  and the fees and expenses, if any, of such arbitrator shall be
                  paid one-half by Purchaser and one-half by Seller.

         3.4.4    Any  payments  to be made under  Section  3.4.1  shall be made
                  within five (5) days after final  determination  of the amount
                  of the Working  Capital as of the Closing Date. Any amounts so
                  paid on or within  sixty-five (65) days after the Closing Date
                  shall be made without  interest  thereon.  Any amounts so paid
                  thereafter  shall  be made  with  interest  thereon  at  seven
                  percent  (7%) per annum from the Closing Date to the date such
                  payment is made.

3.5      Certain Taxes.

         Any real estate and  personal  property  Taxes  payable in arrears with
         respect to the Purchased  Assets or the Business  applicable to periods
         prior to the  Closing  Date that are not known as of the  Closing  Date
         shall be estimated  based upon such Taxes for the  previous  period for
         purposes of determining  Working Capital as of the Closing Date, with a
         subsequent cash settlement to be made between  Purchaser and Seller, if
         necessary, to correct such estimate when the actual amount of Taxes for
         such period is  available.  Except as  provided in this  Section 3.5 or
         otherwise in this Agreement, Purchaser and Seller shall each pay 50% of
         all transfer taxes and fees

                                      -23-







         (excluding  Taxes based on or  measured by income)  which are or may be
         imposed by any  government or political  subdivision  thereof and which
         are  payable or arise as a result of this  Agreement,  or any  transfer
         pursuant  to this  Agreement,  any  Ancillary  Agreements  or any other
         agreements  described  herein to which  Purchaser or Seller is a party,
         notwithstanding  the Party upon which such Taxes are actually  imposed.
         The Parties  shall  cooperate to minimize the amount of any such Taxes,
         including (without limitation)  furnishing to Seller properly completed
         exemption  certificates for any Taxes from which Purchaser claims to be
         exempt.

3.6      Product Returns and Credits.

         Any credit memos that are (i) known but  unprocessed  as of the Closing
         Date,  (ii)  processed  within 60 days  following the Closing Date, and
         (iii)  accepted  returns  of Film  Product,  in each  case for  product
         manufactured  prior to the  Closing  Date,  shall be  reflected  in the
         Working Capital as of the Closing Date. No adjustment shall be made for
         Film Product  returns  after the date that is 60 days after the Closing
         Date.

3.7      FemCare Reimbursement.

         Purchaser  shall  reimburse  Seller  for all costs  incurred  by Seller
         subsequent to April 15, 1999,  for  production  equipment  purchased by
         Seller in order to execute the FemCare project for Proctor & Gamble, as
         set out on Schedule  6.5.  Seller shall notify  Purchaser in writing of
         any such costs prior to incurring such costs.

4.0      ASSUMPTION OF LIABILITIES; EMPLOYEE MATTERS

4.1      General Limitation on Assumption of Liabilities.

         Except for Permitted Encumbrances and as otherwise provided in Sections
         4.2, 4.3, 4.4 and 4.5 and Article 14.0 below, Seller shall transfer the
         Purchased Assets to Purchaser free and clear of all  Encumbrances,  and
         without any assumption of liabilities  and  obligations,  and Purchaser
         shall not, by virtue of its purchase of the Purchased Assets, assume or
         become responsible for any liabilities or obligations of Seller.

                                      -24-







4.2      Assumed Liabilities and Obligations.

         As of the Closing  Date,  Purchaser  (i) shall  acquire  the  Purchased
         Assets subject only to, and (ii) shall undertake,  assume,  perform and
         otherwise pay,  satisfy and discharge,  and hold Seller  harmless from,
         only (x) the  liabilities and obligations set forth on Schedule 4.2 and
         (y) the  liabilities  and  obligations  of  Purchaser  provided  for in
         Article 14.0 hereof (collectively, the "Assumed Liabilities").

4.3      Offer of Employment.

         Except as set out in this Section 4.3, Purchaser shall offer employment
         as of the  Closing  Date  to  substantially  all  Employees  listed  on
         Schedule 1.20(a) (except as set forth herein) at substantially  similar
         jobs,  at  substantially  the same  salaries or wages,  as were paid by
         Seller immediately prior to the Closing Date; provided,  however,  that
         with  respect to any hourly  Employee at the  Pottsville,  Pennsylvania
         Facility,  Purchaser  shall be  entitled  to offer  employment  to such
         Employee   under   Purchaser's   terms  and  conditions  of  employment
         (including  benefit  plans).  If  Purchaser  does not  intend  to offer
         employment  to an  Employee  listed on  Schedule  1.20(a)  or  Schedule
         1.20(b),  it shall so advise  Seller in writing as soon as  practicable
         after execution of this Agreement,  but in no event later than ten (10)
         days  after  such  execution.  Each  Employee  on  Schedule  1.20(a) or
         Schedule  1.20(b) who accepts an offer of employment  and  subsequently
         becomes an  actively  at-work  employee  of  Purchaser  is  hereinafter
         referred to as a "Hired Employee." Seller shall use its best efforts to
         retain  all  Employees  to be  hired  by  Purchaser  in  their  current
         positions up to the Closing  Date,  at  substantially  the same salary,
         except  that  Seller  may  terminate  any  employee  for  cause or poor
         performance  consistent with Seller's  existing  employment  practices.
         Purchaser  shall keep on its payroll at  substantially  the same salary
         all such Hired  Employees  for at least one (1) year after the  Closing
         Date,  except for (i) those Hired  Employees who may be terminated  (A)
         for cause, or (B) as a result of a force majeure or the loss of a major
         customer that significantly adversely affects the economic viability of
         the facility at which such Hired Employee is located,  (ii) those Hired
         Employees  who  elect to  retire  or  otherwise  voluntarily  terminate
         employment  with  Purchaser,  and (iii)  those Hired  Employees  at the
         Pottsville,  Pennsylvania  Facility that are replaced in the event of a
         work  stoppage  or  strike.  Except  as set  out in this  Section  4.3,
         Purchaser shall offer employment to each

                                      -25-







         inactive Employee listed on Schedule 1.20(b) who applies for employment
         with  Purchaser  at the  earliest  of:  (i) the  date the  Employee  is
         released  to return to work,  in the case of a  disability-type  leave,
         (ii) the Employee's  expected  return to work date as shown in Schedule
         1.20(b),  or (iii) 180 days from the Closing Date. Within ten (10) days
         after Closing,  Purchaser shall notify all Employees listed on Schedule
         1.20(b) of the  condition  under which such  Employees  will be offered
         jobs.  Purchaser may,  consistent with  applicable law,  condition such
         employment on each such  individual  passing a medical  examination  as
         required by Purchaser.  Seller shall assign, and Purchaser shall accept
         such assignment of, all written contracts of employment (other than any
         collective  bargaining  agreement)  between  Seller  and the  Employees
         employed  by  Purchaser,  to the  extent  such  contracts  are  legally
         assignable.

4.4      Vacation Liability.

         Purchaser  shall  assume  liability  as of the  Closing  Date  for  the
         vacation  entitlement of each Hired Employee earned for 1999, and after
         the  Closing  Date,  shall pay each Hired  Employee's  salary and wages
         during their vacation entitlement from Purchaser when taken. If a Hired
         Employee's  employment  with  Purchaser is terminated  during 1999 with
         vacation  entitlements  remaining,   Purchaser  shall  pay  such  Hired
         Employee  a  lump  sum  in  cash  equal  to  such  remaining   vacation
         entitlement.  If  Seller  is  required  by  any  collective  bargaining
         agreement to pay cash to any Hired  Employee in lieu of 1999  vacation,
         Purchaser shall reimburse Seller for the amounts so paid.

4.5      Other Employee Benefits.

         4.5.1    Seller  agrees  that,  with  respect  to claims  for  workers'
                  compensation   arising  solely  out  of  events  or  illnesses
                  occurring  prior  to the  Closing  Date and all  claims  under
                  Seller's  employee  benefit  programs  by, or in  respect  of,
                  persons  employed by Seller in the Business arising solely out
                  of events or illnesses  occurring  prior to the Closing  Date,
                  regardless  of whether  such  employment  had  terminated  and
                  regardless  of whether such employee is employed by Purchaser,
                  whether  reported or unreported  as of the Closing  Date,  and
                  whether insured or uninsured  (including,  but not limited to,
                  workers' compensation,  life insurance, medical and disability
                  programs),  Seller shall, at its own expense,  honor, or cause
                  its  insurance  carriers,  if any,  to honor,  such  claims in
                  accordance with the terms and conditions of such programs or

                                      -26-



                  applicable  workers'  compensation  statutes,   including  any
                  construction  of such terms or conditions  ultimately  made by
                  any  court  or   administrative   body   having   jurisdiction
                  thereover.   Without  limiting  the  scope  of  the  preceding
                  sentence,  Seller and its Affiliates  shall be responsible for
                  any and all claims and liabilities  arising out of or relating
                  to (i)  their  employment  of  the  Employees  or  any  former
                  employees  of Seller,  (ii) except as provided in Section 4.6,
                  the  termination  by any of such entities of the employment of
                  any such Employee, former employee,  consultant or other agent
                  of Seller, and (iii) the provision of any employee benefits to
                  such   Employees,   former   employees,   retirees,   disabled
                  employees,  or agents of Seller (and their  beneficiaries  and
                  eligible dependents) attributable to their employment with, or
                  their  participation  in any plans or programs  maintained  or
                  contributed to by, Seller or any of its Affiliates.  Purchaser
                  shall assume liability for all workers' compensation claims of
                  Hired   Employees  for   industrial   injuries  and  illnesses
                  occurring  on or after  the  Closing  Date in  respect  to the
                  Business.

         4.5.2    Each Hired  Employee  shall  receive  vesting and  eligibility
                  credit  for  service  with the  Seller  under the  Purchaser's
                  employee benefit plans,  policies,  and programs maintained by
                  the  Purchaser  for Hired  Employees  as of the Closing  Date.
                  These plans will  include,  but are not  limited  to,  retiree
                  welfare,  defined benefit pension plan,  savings plan, medical
                  plan (without any exclusion for  pre-existing  conditions that
                  would not have been treated as pre-existing  conditions  under
                  the Seller's  medical plan as of the Closing  Date),  life and
                  disability  insurance plans. Each Hired Employee shall receive
                  benefit  credit under the  Purchaser's  disability,  vacation,
                  severance  and service  award  programs  for service  with the
                  Seller.  Each Hired  Employee shall receive credit for benefit
                  accrual purposes under Purchaser's defined pension plans equal
                  to the  service  credited  under  Seller's  pension  plans for
                  benefit  accrual  purposes.  The  benefit  payable  to a Hired
                  Employee from the defined benefit pension plan or plans of the
                  Purchaser  (the  "Purchaser's  Plan  Benefit")  shall  be  the
                  difference  between  (a) and (b)  below,  with  the  remainder
                  actuarially adjusted as provided herein:

                           a)       the  annual  benefit  earned as of the Hired
                                    Employee's   retirement   date   under   the
                                    Purchaser's plan or plans, calculated

                                      -27-







                                    as a single  life  annuity  and  actuarially
                                    adjusted by any applicable  early retirement
                                    reduction  factors but not  adjusted for any
                                    qualified   domestic   relations  order,  as
                                    defined in Section 414 of the Code ("QDRO");
                                    and

                           b)       the annual  benefit earned as of the Closing
                                    Date   under   Seller's   plan   or   plans,
                                    calculated  as a  single  life  annuity  and
                                    actuarially adjusted by any applicable early
                                    retirement   factors   as   of   the   Hired
                                    Employee's   retirement   date   under   the
                                    Purchaser's  plan or plans but not  adjusted
                                    for any  QDRO or  prior  lump  sum or  other
                                    benefit payments.

                  The Purchaser's Plan Benefit determined in accordance with the
                  preceding  sentence and illustrated in Schedule 4.5.2 shall be
                  actuarially  adjusted for the application of any QDRO, payment
                  in a form other than a single life annuity and the application
                  of any temporary early  retirement  adjustment.  The Purchaser
                  shall have the  discretion to determine the  Purchaser's  Plan
                  Benefit of each Hired  Employee in a manner that is consistent
                  with  the  foregoing,  the  terms of the  Purchaser's  defined
                  benefit   pension  plans  and  the  terms  of  any  collective
                  bargaining  agreement in effect after the Closing Date and the
                  terms  of  such  plan  and  any  such  collective   bargaining
                  agreement  shall control in the event of any conflict with the
                  terms of this Section 4.5.2.

         4.5.3    Except for the Hired Employees who are hourly employees at the
                  Pottsville,  Pennsylvania facility and their dependent(s), who
                  shall be  covered  by the terms of the  collective  bargaining
                  agreement in effect immediately  following the Closing, or, in
                  the absence of such collective bargaining agreement, the terms
                  and  conditions   established  for  such  Hired  Employees  by
                  Purchaser  at the  Closing  Date,  Hired  Employees  and their
                  eligible  dependent(s)  will be eligible to participate in the
                  hospital,   surgical,  medical  plan  available  to  similarly
                  situated  employees of Purchaser's  Films Division.  Purchaser
                  agrees  that  Purchaser's   medical  plan  will  accept  Hired
                  Employees  and eligible  dependent(s)  without a  pre-existing
                  condition  exclusion  provided that (a) the Hired Employee and
                  eligible dependent(s) were enrolled in Seller's medical

                                      -28-







                  plan as of the  Closing  Date and (b) the Hired  Employee  and
                  eligible  dependent(s) enroll in Purchaser's medical plan on a
                  timely basis.

         4.5.4    If a Hired  Employee has less than the  credited  service with
                  Seller to vest and is a  participant  in the Seller's  savings
                  plans,  Purchaser agrees that, if and when such Hired employee
                  attains  100%  vesting  under  the  terms  of the  Purchaser's
                  savings plan,  Purchaser shall pay to such Hired Employee,  as
                  soon as  practicable  after  attainment  of such  service,  an
                  amount  which  is  equal to the  non-vested  company  matching
                  credits in the Seller's  savings plans at the Closing Date for
                  such Hired  Employee.  The  Purchase  Price will be reduced by
                  107.65% of the non-vested  company  matching  credits.  Seller
                  agrees to provide  Purchaser with a count of those  non-vested
                  Hired  Employees  and an  estimate of the  non-vested  company
                  matching  credits in the Seller's  savings plans no later than
                  fifteen  (15) days  before  the  Closing  Date.  Seller  shall
                  provide  Purchaser  with a list showing the actual  non-vested
                  company  matching  credits for such non-vested Hired Employees
                  prior  to the  completion  of  the  Adjusted  Working  Capital
                  Worksheet  pursuant to Section 3.4.1.  Any difference  between
                  107.65% of the  estimated  and 107.65% of the actual amount of
                  such participants non-vested company matching credits shall be
                  added, or subtracted  from, as  appropriate,  the amount to be
                  paid pursuant to Section 3.4.1.

         4.5.5    Purchaser  shall  have no claim  to,  responsibility  for,  or
                  obligation regarding Seller's ERISA Plans.
4.6      WARN Act.

         Purchaser  acknowledges and warrants to Seller that Purchaser's actions
         in connection with the transactions contemplated by this Agreement will
         not result in a "plant  closing" or "mass layoff" within the meaning of
         the Worker  Adjustment and Retraining  Notification Act (WARN Act), and
         Purchaser  shall  indemnify  Seller  against  any  expense  incurred by
         Seller,  including  attorneys' fees, if applicable,  in connection with
         the  application  of  the  WARN  Act  to  Seller  as a  result  of  the
         transactions  contemplated by this Agreement;  provided that,  prior to
         Closing,  Seller will not temporarily or permanently close or shut down
         any "single site of  employment"  or any  "facility" or any  "operating
         unit," "department" or "service" within a single site of

                                      -29-







         employment,  as  such  terms  are  used  in the  WARN  Act,  within  or
         constituting part of the Business.  Seller represents that the Business
         has not had, and will not have,  any such closures or shutdowns  within
         the period of at least ninety (90) days prior to Closing. Seller agrees
         not to take any  action or  contribute  to any  liability  of Seller or
         Purchaser under the WARN Act, including, without limitation, not laying
         off any employee  between  execution of this  Agreement and the time of
         Closing, without Purchaser's written consent,  provided that Seller may
         terminate employees for cause or poor employee  performance  consistent
         with Seller's practices without such consent,  provided,  however,  the
         aggregate number of employees so terminated without Purchaser's consent
         shall  not  exceed  twenty  (20).  At  Closing,  Seller  shall  provide
         Purchaser  with the number of  employees  terminated  at each  Facility
         during the ninety (90) day period prior to the time of Closing.

5.0      CLOSING

5.1      Time; Location.

         Subject to the conditions  contained herein,  the Closing shall be held
         on the Closing Date at Noon,  Chicago,  Illinois Time, at the office of
         Seyfarth,  Shaw,  Fairweather & Geraldson,  55 E. Monroe Street,  Suite
         4200,  Chicago,  Illinois  60603,  or such  other  time or place as the
         Parties shall mutually agree in writing.

5.2      Documents.

         At the  Closing,  Seller shall  execute  and/or  deliver the  following
         instruments of transfer and assignment:

         5.2.1    Duly executed  special  warranty  deeds  substantially  in the
                  forms of Exhibit  5.2.1(a)  and Exhibit  5.2.1(b)  hereto,  in
                  recordable form, transferring to Purchaser good and marketable
                  fee simple title to the Real Property  Owned,  subject only to
                  Permitted Encumbrances;

         5.2.2    A general  bill of sale  substantially  in the form of Exhibit
                  5.2.2 hereto,  transferring  to Purchaser good title to all of
                  the  tangible  personal  property  included  in the  Purchased
                  Assets, subject only to Permitted Encumbrances and the Assumed
                  Liabilities;

                                      -30-







         5.2.3    An Assignment and Assumption  Agreement  substantially  in the
                  form of Exhibit 5.2.3 hereto,  assigning to Purchaser Seller's
                  right, title and interest in each of the Assumed Contracts and
                  Permits included in the Purchased Assets;

         5.2.4    An  Assignment  of  Trademarks   from  Exxon   Corporation  to
                  Purchaser,  substantially  in the  form  of  Exhibit  5.2.4(a)
                  hereto and an Assignment of Trademarks  from Esso (Schweiz) to
                  Purchaser,  substantially  in the  form  of  Exhibit  5.2.4(b)
                  hereto;

         5.2.5    Technology  License  Agreement,  substantially  in the form of
                  Exhibit 5.2.5 hereto;

         5.2.6    Assignments of title to all vehicles included in the Purchased
                  Assets;

         5.2.7    An Existing  Inventory  License  substantially  in the form of
                  Exhibit 5.2.7;

         5.2.8    A  Resin  Supply   Contract   between   Seller  and  Purchaser
                  substantially  in the form previously  agreed to by Seller and
                  Purchaser; and

         5.2.9   An  assignment  from  Seller  to  Purchaser  of the  Technology
                 License  Agreement  between  Telasto  and  Seller,  dated as of
                 September 27, 1994;

         5.2.10   Such  additional  instruments  of  conveyance  and transfer as
                  Purchaser may reasonably  require in order to more effectively
                  vest in it, and put it in possession of, the Purchased Assets.

5.3      Reasonable Steps.

         Prior to the Closing Date,  Seller shall take such reasonable  steps as
         may be requisite  or  appropriate  so that,  no later than the close of
         business  on the  Closing  Date,  Purchaser  shall be  placed in actual
         possession and control of all of the Purchased Assets.

6.0      REPRESENTATIONS AND WARRANTIES OF SELLER

         Seller represents and warrants to Purchaser as follows:

                                      -31-






6.1      Organization, Good Standing and Power.

         Seller (i) is a corporation  duly  organized,  validly  existing and in
         good standing  under the laws of the State of New Jersey,  (ii) is duly
         licensed or qualified to transact business in each of the jurisdictions
         where the  nature of the  property  owned by it or the  conduct  of the
         business  transacted by it,  requires such  licensing or  qualification
         (except where the failure to so qualify in any such jurisdiction  would
         not have a Material  adverse  effect on any of the Purchased  Assets or
         the results of operations of the Business), and (iii) has all requisite
         power and authority to (x) own,  lease and operate the  properties  and
         assets it  currently  owns and  leases  that are part of the  Purchased
         Assets and to carry on the  Business  as  currently  conducted  and (y)
         execute  and  deliver  the  Transaction  Documents  and the  Technology
         License Agreement to be executed and delivered by it, to consummate the
         transactions  contemplated  by this  Agreement  and to perform  all the
         terms,  conditions and obligations of this Agreement to be performed by
         it.

6.2      Authorization of Agreement and Enforceability.

         Seller  has taken all  necessary  corporate  action  to  authorize  the
         execution and delivery of the Technology  License Agreement (other than
         as  set  out in the  Technology  License  Agreement)  and  each  of the
         Transaction  Documents to which Seller is a party,  the  performance by
         Seller of all terms and  conditions  hereof and thereof to be performed
         by Seller and the consummation of the transactions  contemplated hereby
         and  thereby.  No other  action on the part of Seller is  necessary  to
         authorize the  execution,  delivery and  consummation  by Seller of the
         Technology  License Agreement and each of the Transaction  Documents to
         which  Seller  is a party,  to give  effect to the  provisions  of this
         Agreement and to consummate the transactions contemplated hereby except
         as  required  by the  HSR  Act or as  otherwise  contemplated  by  this
         Agreement.   This  Agreement  and  the  Ancillary  Agreements  and  the
         Technology  License  Agreement and all other  agreements  and documents
         described  herein to which Seller is a party,  upon Seller's  execution
         and delivery  thereof,  will constitute,  the legal,  valid and binding
         obligations  of Seller,  enforceable  in  accordance  with their  terms
         except to the extent that  enforceability may be limited by bankruptcy,
         insolvency,  moratorium or other similar laws presently or hereafter in
         effect  relating to or affecting the  enforcement of creditors'  rights
         generally and by

                                      -32-







         general  principles of equity  (regardless  of whether  enforcement  is
         considered in a proceeding in equity or at law).

6.3      No Violations; Consents.

         The  execution,  delivery and  performance  by Seller of the Technology
         License Agreement and each of the Transaction Documents to which Seller
         is a party and the consummation of the transactions contemplated hereby
         and thereby will not to Seller's  Knowledge (with or without the giving
         of notice or the lapse of time,  or both) (i) violate any  provision of
         the charter or bylaws of Seller,  (ii) violate,  or, except as required
         by the HSR Act or by the  permits and  licenses  referred to in Section
         6.7 hereof, require any consent, authorization, approval, exemption, or
         filing under any provision of any law,  statute,  rule or regulation to
         which Seller,  the Business or the Purchased Assets are subject,  (iii)
         violate any judgment,  order, writ or decree of any court applicable to
         Seller,  the  Business or the  Purchased  Assets,  (iv) except for such
         consents or approvals as required by the leases and contracts  referred
         to in Section 1.42 (which  generally  require consent to the assignment
         thereof)  conflict  with,  result in a breach of,  constitute a default
         under,  or accelerate  or permit the  acceleration  of the  performance
         required by, or require any consent,  authorization  or approval  under
         (x) any  mortgage,  indenture,  loan or credit  agreement  or any other
         agreement or instrument  evidencing  indebtedness for money borrowed to
         which  Seller  is a party or by which  Seller  or any of the  Purchased
         Assets is bound or (y) any other  contract,  agreement or instrument to
         which Seller is a party or any of the Purchased  Assets is bound or (v)
         result  in the  creation  or  imposition  of any  Encumbrance  upon the
         Purchased  Assets,   which  violation,   conflict,   breach,   default,
         acceleration  or  Encumbrance,  or the  failure to make or obtain  such
         filing, consent, authorization or approval, with respect to the matters
         specified  in clauses (ii)  through (v) could,  individually  or in the
         aggregate,  reasonably be expected to have a Material adverse effect on
         the  Purchased  Assets or the results of  operations of the Business or
         prevent or delay the consummation of the  transactions  contemplated by
         this Agreement.

6.4      Financial Statements.

         The  Financial  Statements  are, or will be when prepared in accordance
         with this Agreement,  subject to any qualifications,  assumptions,  and
         other limitations specified

                                      -33-







         therein, or exceptions set forth in Schedule 6.4, accurate and complete
         in all Material  respects,  and have been prepared in  accordance  with
         GAAP applied on a consistent basis. Such Financial  Statements  present
         fairly, in all Material respects,  the financial  condition and results
         of operations of the Business as of the date thereof and for the period
         covered thereby and are in accordance with the Books and Records of the
         Business  unless  otherwise  noted therein.  Except (i) as set forth in
         Schedule  6.4 or the  Financial  Statements,  (ii) as  incurred  in the
         ordinary  course of the Business  subsequent  to December 31, 1998,  or
         (iii) arising in the ordinary  course of Business  under any agreement,
         contract,  commitment,  lease  or  plan  specifically  disclosed  on  a
         Schedule hereto or not required to be disclosed  because of the term or
         amount involved,  Seller has no debts, obligations or other liabilities
         (whether  absolute or contingent) in respect to the Purchased Assets or
         the Business.

         For purposes of this Section 6.4,  "Material" shall mean a deviation in
         the  Financial  Statements  which,  when taken  together with all other
         positive and negative  deviations,  had or could reasonably be expected
         to have, an adverse impact of $100,000 or more on the Purchased  Assets
         or the results of operations of the Business.

6.5      Absence of Certain Changes or Events.

         Except as set forth in Schedule 6.5 hereto, since December 31, 1998, in
         its conduct of the Business, Seller has not:

         6.5.1    Amended or  terminated,  any  contract  listed on any Schedule
                  attached hereto;

         6.5.2    Suffered the occurrence of any events which,  individually  or
                  in the aggregate, have had, or could reasonably be expected to
                  have, an adverse effect on the Purchased Assets or the results
                  of operations of the Business;

         6.5.3    Incurred any damage or destruction having an adverse effect on
                  the  Purchased  Assets or the  results  of  operations  of the
                  Business by fire, storm, or similar  casualty,  whether or not
                  covered by insurance;

         6.5.4    Sold,  transferred,  replaced  or leased any of the  Purchased
                  Assets,  except for transactions in the ordinary course of the
                  Business;

                                      -34-







         6.5.5    Waived or released  any rights with  respect to the  Purchased
                  Assets or the Business;

         6.5.6    Except as necessary to carry out the transactions contemplated
                  by this Agreement, entered into any transaction;

         6.5.7    Changed,  its methods of  accounting  or made or permitted any
                  change to its Books and  Records  or in its  method of keeping
                  its  Books  and  Records  except  in the  ordinary  course  of
                  Business, and consistent with past practice;

         6.5.8    Except  in  preparation  of  the   transactions   specifically
                  contemplated by this Agreement,  increased or written down the
                  value  of any  Inventory  or  Accounts  Receivable  without  a
                  written explanation of the cause furnished to Purchaser;

         6.5.9    Permitted any of the Purchased Assets to be subject to any new
                  Encumbrance  except for Permitted  Encumbrances or the Assumed
                  Liabilities;

         6.5.10   Increased  the  compensation  of Employees,  except  following
                  normal review procedures;

         6.5.11   Except as necessary to carry out the transactions contemplated
                  by this  Agreement,  altered its conduct in its relations with
                  suppliers or customers,  including  altering the rates charged
                  by the Business for its products and services;

         6.5.12   Except as necessary to carry out the transactions contemplated
                  by this Agreement, otherwise conducted the Business other than
                  in the usual and ordinary course of the Business;

         6.5.13   Received  any  indication  by any  customer  or supplier of an
                  intention  to  discontinue,  reduce or change the terms of any
                  contract or relationship with Seller;

         6.5.14   Except as expressly  contemplated by this Agreement,  adopted,
                  amended,  or increased the payments to or benefits under,  any
                  Employee  Plan  other  than   consistent  with  Seller's  past
                  practice in the operation of the Business;

                                      -35-







         6.5.15   Amended or modified,  or granted any  exception to, its credit
                  criteria for new or existing customers;

         6.5.16   Other than events due to force majeure, suffered any repeated,
                  recurring or prolonged shortage,  cessation or interruption of
                  inventory shipments,  supplies or utility services required to
                  conduct the Business or suffered  any change in its  financial
                  condition or in the nature of its business or operations which
                  has had or might have an adverse effect on the Business or the
                  Purchased Assets;

         6.5.17   Except in the ordinary course of business, and consistent with
                  past practice,  made or permitted any amendment or termination
                  of any insurance  arrangement  with respect to the Business or
                  the Purchased Assets; or

         except in each of the foregoing  instances where the matters or conduct
         prohibited  by this  Section  6.5 are  taken or  occur in the  ordinary
         course of Business and do not individually or in the aggregate with the
         other matters  described in this Section 6.5 have, or could  reasonably
         be expected to have,  a Material  (solely for  purposes of this Section
         6.5,  "Material"  shall  mean an impact of  $500,000  or more)  adverse
         effect on the  Purchased  Assets or the  results of  operations  of the
         Business  or  prevent  or delay the  consummation  of the  transactions
         contemplated by this Agreement.

6.6      Title to Properties; Absence of Liens and Encumbrances.

         6.6.1    (a) Subject to any  exceptions or conditions  set forth in the
                  Title  Commitments  referenced  in Section  8.1.13 and Surveys
                  referenced in Section 8.1.14,  Seller owns good and marketable
                  title  to the  Real  Property  Owned  free  and  clear  of all
                  Encumbrances  other  than  Permitted  Encumbrances.  The  Real
                  Property  Leased is leased to Seller  pursuant to those Leases
                  and  Contracts  listed  in  Schedule  1.42.  Seller  is not in
                  Material  default  under  any  terms  of any such  Leases  and
                  Contracts  relating  to  the  Real  Property  Leased,  nor  to
                  Seller's  Knowledge  is any other  party  thereto in  Material
                  default thereunder.

                  (b)      Use of the Real Property for the various purposes for
                           which each are  presently  being used is permitted as
                           of  right   under   all   applicable   zoning   legal
                           requirements  and except as listed on Schedule 6.6 is
                           not

                                      -36-







                           subject to  variances or  "permitted  non-conforming"
                           use  or  structure  classifications.   There  are  no
                           existing or, to the Knowledge of Seller,  threatened,
                           Material   violations   of  any   provision   of  any
                           applicable building, zoning subdivision or ordinance.

         6.6.2    Schedules  1.65(a) and  1.65(b)  correctly  identify  all Real
                  Property Owned and Schedule 1.64 correctly identifies all Real
                  Property  Leased.  Except  as set forth in  Schedule  1.64 and
                  Schedule 1.65(a) and Schedule 1.65(b),  Seller does not own or
                  lease any real  property used or held for use  exclusively  in
                  the conduct of the Business.

         6.6.3    Seller  has  received  no  notice  of,  and  otherwise  has no
                  Knowledge  of,  any  pending,   threatened   or   contemplated
                  condemnation,  eminent domain or similar proceedings affecting
                  the  Real  Property  Owned.  Seller  has no  Knowledge  of any
                  pending,  threatened  or  contemplated  condemnation,  eminent
                  domain or  similar  proceedings  effecting  the Real  Property
                  Leased.

         6.6.4    To the  Seller's  Knowledge,  all  improvements  to  the  Real
                  Property are in compliance with all applicable  Material legal
                  requirements,  including those pertaining to zoning,  building
                  and the disabled.  To Seller's Knowledge,  all improvements to
                  the Real  Property  are in good repair and in good  condition,
                  ordinary  wear and tear  excepted,  and are  free  from  known
                  defects.  Except  as set  forth on the  Surveys,  to  Seller's
                  Knowledge,  no part of any such improvement  encroaches on any
                  real  property not included in the Real Property and there are
                  no such improvements  primarily situated on adjoining property
                  which encroach on any part of the Real  Property.  To Seller's
                  Knowledge,  except as set out on  Schedule  6.6,  the land for
                  each  of the  Facilities  abuts  on and has  direct  vehicular
                  access to a public  road or has access to a public  road via a
                  permanent,  irrevocable,  appurtenant easement benefiting such
                  land and comprising a part of the Real  Property,  is supplied
                  with  public or  quasi-public  utilities  and  other  services
                  appropriate  for  the  operation  of  the  Facilities  located
                  thereon,  and is not located  within any flood plain,  as such
                  flood  plains are  recorded in the  applicable  city or county
                  records.

                                      -37-






6.7      Permits; Licenses.

         Seller has all necessary permits,  licenses,  registrations,  consents,
         certificates,   orders  and  approvals  of  federal,   state  or  local
         government  or  regulatory  bodies that are  required to permit  Seller
         lawfully  to  operate  and  conduct  the  Business  (including  without
         limitation those required under any  Environmental Law ) (collectively,
         the "Permits")  and,  except as described in Schedule 6.8, Seller is in
         substantial compliance with all Permits other than the failure of which
         to have,  or the  noncompliance  with  which,  would  not  result  in a
         Material  adverse  effect  on the  Business  or the  Purchased  Assets.
         Schedule  6.7 hereto  sets  forth a correct  and  complete  list of all
         Permits,  each one of which is in full force and effect,  except to the
         extent that there would be no Material  adverse  effect on the Business
         or  the  Purchased  Assets.  To  Seller's  Knowledge,   no  suspension,
         revocation,  limitation  or  cancellation  of  any of  the  Permits  is
         threatened  or  pending  nor has Seller  received  notice of any of the
         foregoing,  and  no  cause  exists  for  such  suspension,  revocation,
         limitation or cancellation. Any Permits which cannot be transferred are
         identified on Schedule 6.7 hereto.

6.8      Compliance with Laws.

         Except as  described  in Schedule  6.8 hereto,  since  January 1, 1996,
         Seller  has  conducted  the  Business  so as to  comply  with all laws,
         ordinances and regulations,  including but not limited to Environmental
         Laws,  applicable  to the conduct or  operation  of the Business or the
         ownership or use of the Purchased Assets, in each case except where the
         failure  to  comply  would  not,  individually  or  in  the  aggregate,
         reasonably  be  expected  to  have a  Material  adverse  effect  on the
         Purchased  Assets or the results of operations of the Business.  Except
         as described in Schedule 6.8, with respect to the Business,  Seller has
         not received, nor is it aware of any outstanding notice of violation of
         any law, rule, regulation,  ordinance or order of any court or federal,
         state, municipal or other governmental department,  commission,  board,
         bureau, agency or instrumentality, in each case except where the notice
         of  violation  would  not,  individually  or in the  aggregate,  have a
         Material  adverse  effect on the  Purchased  Assets or the  results  of
         operations of the Business.

                                      -38-







6.9      Legal Proceedings.

         Except as  described  in  Schedules  6.8, 6.9 and 6.11 hereto or as set
         forth on Schedules X and XI of the Technology License Agreement,  there
         is  no  claim,  action,  suit,  proceeding,  investigation  or  inquiry
         ("Action")  pending  before  any  federal,  state  or  other  court  or
         governmental  or  administrative  agency  or,  to  Seller's  Knowledge,
         threatened  against the Business or any of the Purchased Assets, or the
         transactions contemplated by this Agreement,  which could reasonably be
         expected to have a Material  adverse effect on the Purchased  Assets or
         the results of  operations  of the  Business or may prevent or delay or
         otherwise   interfere  with  the   consummation  of  the   transactions
         contemplated by this  Agreement.  Except as described in Schedules 6.8,
         6.9 and 6.11,  Seller is not a party to or subject to the provisions of
         any  order,  writ,  injunction,  judgment  or  decree  of any  court or
         government  agency  or  instrumentality  which  primarily  affects  the
         Business or the Purchased Assets and which could reasonably be expected
         to have a  Material  adverse  effect  on the  Purchased  Assets  or the
         results  of  operations  of the  Business  or may  prevent  or delay or
         otherwise   interfere  with  the   consummation  of  the   transactions
         contemplated by this Agreement; and to the Knowledge of Seller there is
         no  Action by Seller  currently  pending  or which  Seller  intends  to
         initiate that may have a Material adverse effect on the Business or the
         Purchased Assets.

6.10     Books and Records.

         All books of account  and other  financial  records of Seller  directly
         relating to the Business and the  environmental  reports referred to in
         Section 6.26(iv) (the "Books and Records") and all customer records and
         specifications, plans, drawings, and blueprints exclusively relating to
         the  Business,  are complete  and correct in all Material  respects and
         have been made available to Purchaser.  The Books and Records represent
         actual,  bona fide  transactions and have been maintained in accordance
         with sound business practices, including the maintenance of an adequate
         system of internal  controls.  All of the Books and  Records  have been
         prepared and maintained in accordance with good business practices and,
         where  applicable,  in conformity  with generally  accepted  accounting
         principles  (except  as  otherwise  stated  on  Schedule  6.4)  and  in
         compliance with applicable laws, regulations and other requirements.

                                      -39-







6.11     Labor Disputes.

         Except  as   described   in  Schedule   6.11   hereto,   there  are  no
         discrimination  complaints nor any other kind of Material labor-related
         disputes  against Seller in connection with the Business pending before
         or, to Seller's  Knowledge,  threatened before,  any federal,  state or
         local court or agency and, to Seller's Knowledge, no dispute respecting
         minimum  wage  or  overtime   claims  exists.   The  Business  has  not
         experienced  any Material  labor disputes or any Material work stoppage
         due to labor  disagreements  within  the past  three  (3)  years.  With
         respect to the  Business and except to the extent set forth in Schedule
         6.11, (i) there is no unfair labor practice charge or complaint against
         Seller actually pending or, to Seller's Knowledge,  threatened,  before
         the National  Labor  Relations  Board;  (ii) there is no labor  strike,
         slowdown  or  stoppage  actually  pending  or, to  Seller's  Knowledge,
         threatened  against  or  affecting  Seller;  and  (iii) no  attempt  to
         organize  Employees  has resulted in an election  within the past three
         (3) years or, to  Seller's  Knowledge,  is  threatened  respecting  the
         Employees.

6.12     Payroll Practices/Employee Arrangements.

         6.12.1   Schedule  6.12.1  contains  a complete  list of each  employee
                  benefit  plan  subject to ERISA (the  "ERISA  Plans"),  and/or
                  holiday,  vacation,  Christmas or other bonus  practice or any
                  other  employee  pay  practice,   arrangement,   agreement  or
                  commitment    not    subject    to   ERISA    (the    "Payroll
                  Practices/Employee Arrangements") and maintained by Seller, or
                  with respect to which Seller has any liability or  obligation,
                  whether  actual or  contingent,  with  respect to Employees or
                  their respective beneficiaries.

         6.12.2   Seller has not taken any action  which may result in Purchaser
                  being a party to, or bound by,  any  Seller  ERISA  Plan,  and
                  Purchaser  shall have no liability under any Seller ERISA Plan
                  or  Payroll   Practice/Employee   Arrangement   following  the
                  consummation of the transactions contemplated hereby.

         6.12.3   Seller  warrants  that no Seller  ERISA Plan or other  Payroll
                  Practices/Employee  Arrangement  of Seller  has  provided,  or
                  provides,  except  as  may  be  required  under  a  collateral
                  bargaining  agreement,  for the payment of retiree benefits by
                  Purchaser, including any obligation to pay for the cost of any
                  post-

                                      -40-







                  retirement  health care or life insurance or similar  benefit.
                  There  have  been  no   failures   to  provide   health   care
                  continuation  coverage  ("COBRA  Coverage")  under any welfare
                  benefit plans  sponsored by Seller which  Sections 601 through
                  608 of ERISA require or Certificates of Creditable Coverage as
                  required by the Health  Insurance  Portability  and Accounting
                  Act of 1996 (the "HIPAA").  Seller shall provide Employees and
                  former employees of the Business, who are eligible, with COBRA
                  Coverage upon their  termination  of  employment  with Seller,
                  upon the Closing or otherwise, according to ERISA requirements
                  and with  Certificates  of  Creditable  coverage  required  by
                  HIPAA.   Seller  does  not  and  has  not  contributed  to  or
                  maintained  a  "multi-employer  plan" (as  defined  in Section
                  3(37) of ERISA) relating to its film division.

6.13     No Finder.

         With the  exception of fees payable to Chase  Securities,  Inc.,  which
         will be paid by Seller,  Seller has not taken any  action  which  would
         give to any Person a right to a finder's  fee or any type of  brokerage
         commission  in relation to, or in  connection  with,  the  transactions
         contemplated by this Agreement.

6.14     Interest in Business.

         Seller  has not  granted,  and there is not  outstanding,  any  option,
         right, agreement or other obligation pursuant to which any Person could
         claim a right to acquire in any way all or any part of, or interest in,
         the Business, other than as contemplated hereby.

6.15     Leases and Contracts.

         6.15.1   Schedule  1.42 is a true and  complete  list of the Leases and
                  Contracts  required by Section 1.42 to be listed thereon,  and
                  true and  complete  copies (or  summaries  in the case of oral
                  Leases and Contracts) of all such Leases and Contracts  listed
                  on  Schedule  1.42  have  been made  available  to  Purchaser.
                  Schedule  1.42  indicates  which of the Leases  and  Contracts
                  listed  thereon  require a third party  consent in order to be
                  transferred or assigned to Purchaser.

                                      -41-






         6.15.2   Except in connection  with  assigning the Leases and Contracts
                  to  Purchaser  or as set forth on Schedule  1.42,  none of the
                  Leases  and  Contracts   listed  thereon  has  been  modified,
                  amended, assigned or transferred since January 1, 1998, except
                  in the ordinary course of the Business. Each of the Leases and
                  Contracts is in full force and effect and  constitutes a valid
                  and binding obligation of Seller enforceable against Seller in
                  accordance   with  its  terms  and,  to  Seller's   Knowledge,
                  enforceable  against each other Person who is a party  thereto
                  in  accordance  with its  terms,  except  to the  extent  that
                  enforceability  may  be  limited  by  bankruptcy,  insolvency,
                  moratorium  or other  similar  laws  presently or hereafter in
                  effect  relating to or affecting the enforcement of creditors'
                  rights   generally   and  by  general   principles  of  equity
                  (regardless   of  whether   enforcement  is  considered  in  a
                  proceeding in equity or at law).

         6.15.3   No event or condition  has occurred or presently  exists which
                  constitutes  a Material  default or breach or, after notice or
                  lapse of time or both,  would constitute a Material default or
                  breach by Seller,  or to Seller's  Knowledge,  any other party
                  thereto,  under any of the Leases and Contracts.  There are no
                  Material  counterclaims  or offsets existing as of the date of
                  this Agreement under any of the Leases and Contracts which are
                  part of the Assumed Liabilities.

         6.15.4   There does not exist, and between the date hereof and Closing,
                  there will not be granted or suffered,  any security interest,
                  lien,  encumbrance  or claim of others  created or suffered to
                  exist on any  interest  of  Seller  created  under  any of the
                  Leases and  Contracts  other than pursuant to the terms of any
                  such Lease or  Contract,  the  Permitted  Encumbrances  or the
                  Assumed Liabilities.

         6.15.5   No purchase  commitment of or for the Business is in excess of
                  the Business' ordinary requirements.

         6.15.6   Except as identified on Schedule 1.42,  none of the leases set
                  forth on Schedule 1.42 is: (i) a capitalized lease (as defined
                  by generally accepted accounting principles);  or (ii) a lease
                  with a  remaining  term of one (1) year or more  from  Closing
                  Date and which  cannot be  canceled  within  thirty  (30) days
                  without  penalty;  or (iii) a lease  containing  an  option to
                  purchase.

                                      -42-







         6.15.7   Except  as set  forth on  Schedule  1.42,  the  assignment  to
                  Purchaser of the Leases and Contracts constituting the Assumed
                  Contracts  will  not  result  in  a\  default,  alteration  or
                  termination  under any such  Leases  and  Contracts,  and such
                  assignment  will confer all of Seller's  rights  thereunder to
                  Purchaser.

         6.15.8   Schedule   6.15.8   sets   forth   all    independent    sales
                  representatives,    environmental    consultants,    technical
                  consultants   and   independent   technical   contractors   or
                  independent  technical  representatives   (collectively,   the
                  "Contractors")  utilized by Seller  primarily in the operation
                  of the Business in 1998 or 1999. To Seller's Knowledge, except
                  as set  forth in  Schedule  6.15.8,  none of such  Contractors
                  necessary  to operate  the  Business  as  presently  conducted
                  intends to terminate his or her contract with Seller, nor does
                  Seller have any present intention to terminate the contract of
                  any Contractor  necessary to operate the Business as presently
                  conducted.

6.16     Employees of the Business.

         Except as  identified  on  Schedule  1.20(a) and  Schedule  1.20(b) and
         except for any proprietary  information  and invention  agreements with
         Employees (an example of which is attached  hereto as Exhibit  6.16(a))
         and  collective  bargaining  agreements  (attached  hereto  as  Exhibit
         6.16(b)), there are no employment agreements with any Employees and all
         Employees are employed on an "at will" basis.  True and correct  copies
         of all  forms of  proprietary  information  and  invention  agreements,
         fringe  benefits and  personnel  policies  with respect to the Business
         have been provided to Purchaser.  Schedule 1.20(a) and Schedule 1.20(b)
         indicate  which  Employees  signed  such  proprietary  information  and
         invention agreements.

6.17     Accounts Receivable.

         The  Accounts  Receivable  of the Business  constituting  a part of the
         Purchased Assets and reflected on the Balance Sheets were, and those on
         hand at the  Closing  Date will be,  bona  fide,  resulting  from sales
         actually  made or services  actually  rendered by or  operations of the
         Business in the ordinary course of Business.

                                      -43-







6.18     Taxes.

         Seller has caused to be timely filed with appropriate  federal,  state,
         local and other governmental  authorities all Tax returns,  information
         returns or statements and reports  required to be filed with respect to
         the Purchased Assets or the Business. All such Tax returns, statements,
         and reports are correct and complete in all Material  respects,  except
         for any  which,  if not so  filed,  could not have a  Material  adverse
         effect on the  Purchased  Assets or the  results of  operations  of the
         Business and would not result in any  liability for  Purchaser.  Seller
         has paid or caused to be paid or made adequate provision (in accordance
         with generally accepted  accounting  principles) for the payment of all
         Taxes  shown to be due on such  returns or reports  or  otherwise  due,
         except such Taxes,  if any, as are being contested in good faith and as
         to which adequate  reserves  (determined  in accordance  with generally
         accepted accounting principles) have been provided and are disclosed on
         Schedule  6.18 and except where the failure to pay such Taxes would not
         have a Material  adverse effect on the Purchased  Assets or the results
         of  operations  of the Business and would not cause  Purchaser to incur
         any liability.  None of the Purchased Assets is subject to any lien for
         Taxes,  except current Taxes not yet due. None of the Purchased  Assets
         is subject to a "safe  harbor  lease"  under  Section  168(f)(8) of the
         Internal  Revenue Code of 1954, as amended before the Tax Reform Act of
         1984.

6.19     Inventories.

         Except as disclosed on Schedule 6.19, all Inventory is of a quality and
         quantity  usable or saleable in the ordinary and regular  course of the
         Business.  The  quantity  and  quality of all such  Inventory  has been
         determined in a manner  consistent  with prior years.  Inventory now on
         hand that was  purchased  subsequent to December 31, 1998 was purchased
         in the ordinary  course of Business of Seller at what Seller  deemed to
         be an appropriate cost at the time of purchase.  The quantities of each
         item of Inventory (whether raw materials,  work-in-process, or finished
         goods)  are  not   excessive,   but  are   reasonable  in  the  present
         circumstances of the Seller.

6.20     Year 2000 Matters.

         To the Seller's  Knowledge and except as set out on Schedule  6.20, the
         machinery  and  equipment  which are included in the  Purchased  Assets
         (including, without

                                      -44-







         limitation,  all embedded chips and other date-sensitive equipment such
         as security systems, alarms, elevators and HVAC systems) (collectively,
         the  "Systems")  are Year 2000 compliant or will be Year 2000 compliant
         by June  30,  1999,  except  to the  extent  failure  to be  Year  2000
         compliant would not in the aggregate have a Material  adverse impact on
         the Business or the Purchased Assets.

6.21     Sufficiency, Title and Condition of Purchased Assets.

         (a)      Except as set forth in Schedule 6.21, the Purchased  Assets to
                  be  conveyed  hereunder  constitute  all  of  the  rights  and
                  property  necessary to enable Purchaser to conduct Business in
                  a  substantially  similar  manner to which it (i) is presently
                  being  conducted by the Seller and (ii) has been conducted for
                  the period  reflected in the Financial  Statements.  Except as
                  set  forth  in  Schedule  6.21,  none of the  Excluded  Assets
                  constitute  property  or rights  necessary  for the  continued
                  operation of the Business by Purchaser.

         (b)      The Seller  owns good and  marketable  title to the  Purchased
                  Assets  (excluding  the Real Property and leased  assets),  in
                  each  case  free and  clear of any  Encumbrances,  except  for
                  Permitted Encumbrances and any other encumbrances which in the
                  aggregate do not exceed $100,000.

         (c)      To the Seller's  Knowledge,  the fixtures and equipment  which
                  are  included in the  Purchased  Assets are in good  operating
                  condition and repair,  subject to ordinary wear and tear,  and
                  are  substantially  fit for the  purposes  for which  they are
                  being utilized by the Seller.  The tangible  personal property
                  included in the Purchased Assets constitutes substantially all
                  such  property  used or held  for  use by the  Seller  for use
                  exclusively  in the  operation  of the Business on the Closing
                  Date and are free  from  known  defects.  No item of  tangible
                  personal  property  included in the Purchase Assets is in need
                  of  repair  or  replacement  other  than as  part  of  routine
                  maintenance in the ordinary course of Business.

                                      -45-







6.22     Insurance.

         All of the insurable  Purchased  Assets are  self-insured in accordance
         with the past practices of the Seller,  and will be so insured  through
         the  Closing  Date,  in amounts  and against  risks  reasonably  deemed
         adequate by Seller.

6.23     Orders, Commitments and Returns.

         All  accepted  and  unfilled  orders for the sale of Film  Products  to
         customers of the Business and the performance of services for customers
         by the  Business  were made in bona fide  transactions  in the ordinary
         course of Business.  To Seller's  Knowledge,  there are no  outstanding
         claims  that are  Material in the  aggregate  against the Seller or the
         Business by customers of the Business  related to  shortages,  credits,
         damaged goods and related  billing  errors or otherwise  related to the
         shipment of Film  Products or  provision of services by the Business to
         its customers that are not included in Accrued  Expenses.  The Business
         has  delivered  Film  Products  in the  ordinary  course of Business to
         customers,  retailers or distributors  under an understanding that such
         Film Products  would be returnable  only to the extent  provided in the
         Seller's  standard  contract  of sale,  a copy of which is  included in
         Schedule 6.24, in accordance with an applicable  customer contract,  or
         as may be  permitted  by statutory or common law, or in the exercise of
         reasonable business judgment or for customer relations.

6.24     Product Warranties.

         Except as disclosed on Schedule  6.24 attached  hereto,  (i) Seller has
         not provided any unexpired express product warranty with respect to any
         product  manufactured,  processed or sold by the Business,  (ii) Seller
         has not received any notice of any claim based on any product warranty,
         and (iii) to the Knowledge of the Seller,  there are no claims  (actual
         or  threatened)  based on any product  warranty of which the Seller has
         not received notice.

6.25     Affiliated Transactions.

         Except as disclosed on Schedule 6.25, or as expressly  contemplated  by
         this Agreement,  since January 1, 1998, neither the Business nor Seller
         in  connection  with the operation of the Business has, in the ordinary
         course  of  Business  or  otherwise,  purchased,  leased  or  otherwise
         acquired any Material property or assets or obtained

                                      -46-







         any Material  services from, or sold,  leased or otherwise  disposed of
         any Material  property or assets or provided any Material  services to,
         Seller,  any  director,  officer or  employee  of Seller  (except  with
         respect to remuneration for services rendered as a director, officer or
         employee  of  Seller),  or to the  Knowledge  of  Seller,  any of their
         relatives,  or any Affiliate of Seller, any of its directors,  officers
         or employees  or, to the Knowledge of Seller,  any of their  relatives,
         Except as set forth on Schedule  6.25,  (a) the Assumed  Liabilities do
         not include any payable,  receivable,  obligation or commitment between
         the  Seller  and  any  Affiliate  or any of its  respective  directors,
         officers or employees, or, to the Knowledge of the Seller, any of their
         relatives,  and (b) the Purchased  Assets do not include any receivable
         or other  obligation or  commitment  from an Affiliate to the Seller or
         any of its  respective  directors,  officers  or  employees,  or to the
         Knowledge of the Seller,  any of their  relatives.  It is  specifically
         understood  that  transactions  conducted  at fair market value are not
         covered by this Section 6.25 and need not be included on Schedule 6.25.

6.26     Environmental Matters.

         To  Seller's  Knowledge,  during the period of Seller's  ownership  (i)
         there has been no release or threatened release of Regulated Substances
         at or shipment of Regulated  Substances  from the Facilities that would
         require reporting to any governmental regulatory agency or entity under
         the Environmental  Laws as they existed as of the date of such shipment
         or release  that Seller did not report or would  result in any Material
         liability,  under the Environmental Laws; (ii) no Regulated  Substances
         or underground or above-ground  storage tank is contained in or located
         at, in, on or under any of the  Facilities,  except for such  Regulated
         Substances as are used,  stored or maintained in the ordinary course of
         the Business and in Material  compliance with applicable  Environmental
         Laws, except as listed in the Environmental  Assessment;  (iii) none of
         the  Facilities  is listed or  proposed  for  listing  on the  National
         Priorities List pursuant to the Comprehensive  Environmental  Response,
         Compensation and Liability Act ("CERCLA"),  42 U.S.C.  9601 et seq., or
         any similar inventory of sites requiring  investigation,  monitoring or
         remediation  that is  maintained  by any  state or  locality;  and (iv)
         Seller has provided to Purchaser reasonable access to all environmental
         reports,   assessments,    audits,   studies,   investigation,    data,
         environmental   permits  and  other  material   written   environmental
         information  in its  custody,  possession  or  control  concerning  the
         Facilities.

                                      -47-







7.0      REPRESENTATIONS AND WARRANTIES OF PURCHASER

         Purchaser hereby represents and warrants to Seller as follows:

7.1      Organization, Good Standing and Power.

         Purchaser (i) is a corporation duly organized,  validly existing and in
         good standing under the laws of the  Commonwealth  of Virginia and (ii)
         has all  requisite  corporate  power and authority to (x) own and lease
         the  Purchased  Assets and to carry on the Business and (y) execute and
         deliver  this  Agreement,   the  Ancillary  Agreements  and  all  other
         agreements, instruments and documents contemplated by this Agreement to
         be  executed  and  delivered  by it,  to  consummate  the  transactions
         contemplated  by  this  Agreement,   and  to  perform  all  the  terms,
         conditions  and  obligations  of this  Agreement to be performed by it.
         Purchaser  is, or will be as of the  Closing  Date,  duly  licensed  or
         qualified to do business as a foreign  corporation  and will be in good
         standing in the States of Illinois and Pennsylvania.

7.2      Authorization of Agreement and Enforceability.

         Purchaser  has taken all  necessary  corporate  action to authorize the
         execution  and delivery of each of the  Transaction  documents to which
         Purchaser  is a party,  the  performance  by Purchaser of all terms and
         conditions  hereof and thereof to be  performed  by  Purchaser  and the
         consummation of the transactions  contemplated  hereby and thereby.  No
         other action on the part of  Purchaser  is  necessary to authorize  the
         execution,  delivery  and  consummation  by  Purchaser  of  each of the
         Transaction  documents to which Purchaser is a party, to give effect to
         the  provisions of this  Agreement and to consummate  the  transactions
         contemplated hereby,  except as required by the HSR Act or as otherwise
         contemplated by this  Agreement.  This Agreement  constitutes,  and the
         Ancillary  Agreements and all other agreements and documents  described
         herein to which Purchaser is a party,  upon  Purchaser's  execution and
         delivery  thereof,  will  constitute,  the  legal,  valid  and  binding
         obligations  of Purchaser  enforceable  in accordance  with their terms
         except to the extent that  enforceability may be limited by bankruptcy,
         insolvency,  moratorium or other similar laws presently or hereafter in
         effect  relating to or affecting the  enforcement of creditors'  rights
         generally and by general  principles of equity  (regardless  of whether
         enforcement is considered in a proceeding in equity or at law).

                                      -48-







7.3      No Violations; Consents.

         The  execution,  delivery and  performance  by Purchaser of each of the
         Transaction   Documents   to  which   Purchaser  is  a  party  and  the
         consummation of the transactions  contemplated  hereby and thereby will
         not (with or  without  the  giving  of notice or the lapse of time,  or
         both) (i) violate any  provision  of the articles of  incorporation  or
         bylaws of Purchaser,  (ii)  violate,  or, except as required by the HSR
         Act, require any consent, authorization, approval, exemption, or filing
         under any  provision of any law,  statute,  rule or regulation to which
         Purchaser is subject, (iii) violate any judgment, order, writ or decree
         of any court  applicable to Purchaser (iv) conflict  with,  result in a
         breach of,  constitute a default  under,  or  accelerate  or permit the
         acceleration  of the  performance  required by, or require any consent,
         authorization  or approval under (x) any mortgage,  indenture,  loan or
         credit  agreement  or any  other  agreement  or  instrument  evidencing
         indebtedness  for money  borrowed to which  Purchaser  is a party or by
         which  Purchaser  or  any of its  assets  is  bound  or (y)  any  other
         contract,  agreement or instrument to which Purchaser is a party or any
         of its assets are bound or (v) result in the creation or  imposition of
         any Encumbrance  upon its assets,  which violation,  conflict,  breach,
         default,  acceleration or Encumbrance, or the failure to make or obtain
         such filing,  consent,  authorization or approval,  with respect to the
         matters specified in clauses (ii) through (v) could, individually or in
         the aggregate, reasonably be expected to have a Material adverse effect
         on Purchaser or prevent or delay the  consummation of the  transactions
         contemplated by this Agreement.

7.4      Legal Proceedings.

         There is no claim, action, suit,  proceeding,  investigation or inquiry
         pending  before any federal,  state or other court or  governmental  or
         administrative agency or, to Purchaser's Knowledge,  threatened against
         Purchaser  or any of  Purchaser's  properties,  assets,  operations  or
         businesses  that  might  prevent  or  delay  the  consummation  of  the
         transactions contemplated hereby.

7.5      Financial Capacity.

         Purchaser  possesses,  or will  possess  as of the  Closing  Date,  the
         financial  capacity to perform in a full and timely manner each and all
         of its  obligations  under each of the  Transition  Documents  to which
         Purchaser is a party.

                                      -49-







7.6      No Finder.

         With the  exception  of fees  payable to Schroder  Wertheim & Co. which
         will be paid by  Purchaser,  Purchaser  has not taken any action  which
         would  give to any  Person  a right  to a  finder's  fee or any type of
         brokerage  commission  in  relation  to,  or in  connection  with,  the
         transactions contemplated by this Agreement.

7.7      Purchaser's Knowledge.

         Except as set forth in Schedule 7.7,  Purchaser  has no Knowledge  that
         any of Seller's representations and warranties are incorrect or untrue.

8.0      COVENANTS OF SELLER PRIOR TO CLOSING DATE

8.1      Required Actions.

         Between  the date of this  Agreement  and the time of  Closing,  in its
         conduct of the Business, Seller shall:

         8.1.1    Access to Information.

                  Give to Purchaser  and its counsel,  accountants,  consultants
                  and other  representatives,  at their sole  expense  and risk,
                  reasonable access under suitable terms and conditions,  during
                  normal  business  hours,  to  such of the  properties,  books,
                  accounts,  personnel (with representatives of Seller present),
                  contracts  and  records  of  Seller  as  are  relevant  to the
                  Purchased  Assets and the  Business,  and furnish or otherwise
                  make  available to Purchaser all such  information  concerning
                  the  Purchased  Assets  and  the  Business  as  Purchaser  may
                  reasonably  request,  to the extent such access and disclosure
                  would not violate the terms of any  agreement  to which Seller
                  is bound or any applicable  law or  regulation,  provided that
                  the  confidentiality  of any data or  information  so acquired
                  shall be maintained by Purchaser  and its  representatives  in
                  accordance with Section 9.1.1.

         8.1.2    Conduct of Business.

                  Except as  permitted or required  hereby or as  Purchaser  may
                  otherwise  consent to in writing  (which  consent shall not be
                  unreasonably withheld),

                                      -50-






                  operate the Business  only in the usual,  regular and ordinary
                  manner as such  Business  was  conducted  prior to the date of
                  this  Agreement  and,  to  the  extent  consistent  with  such
                  operation,  use commercially reasonable efforts until the time
                  of Closing to (i) preserve and keep intact the Business,  (ii)
                  keep  available  the  services  of the  Employees,  and  (iii)
                  preserve  its  relationships  with  customers,  suppliers  and
                  others having business dealings with Seller in connection with
                  the Business.

         8.1.3    Maintenance of Properties.

                  Maintain the Purchased  Assets,  whether  owned or leased,  in
                  good  repair,   order  and  condition,   in  accordance   with
                  manufacturers'   instructions  and  Seller's  past  practices,
                  reasonable  wear and tear  excepted.  Except as  permitted  by
                  Section 12.11.2,  Seller and any party in possession of all or
                  part of the  Real  Property  will  not  perform  any  material
                  grading  or  excavation,   construction   or  removal  of  any
                  improvement,  or make any material change or improvement  upon
                  or  about  the  Real  Property  without  the  consent  of  the
                  Purchaser.

         8.1.4    Maintenance of Books and Records.

                  Maintain  the Books and  Records  in the  usual,  regular  and
                  ordinary manner, on a basis consistent with past practice.

         8.1.5    Compliance with Laws and Regulatory Consents.

                  Except for items  listed or described on Schedule 6.8 that may
                  be  continuous  in nature,  comply  with all  statutes,  laws,
                  ordinances  and  regulations  including,  but not  limited  to
                  Environmental  Laws,  except  in each case as would not have a
                  Material  adverse  effect  on the  Purchased  Assets or on the
                  results of the  operations of the Business;  hold and maintain
                  all Permits  necessary  for the  operation of the Business and
                  the Purchased  Assets except for those Permits as to which the
                  failure to hold and maintain would not have a Material adverse
                  effect on the Business or the Purchased  Assets;  and make and
                  cause to be made all  filings  and give and  cause to be given
                  all notices

                                      -51-







                  which  may be  necessary  on its part  under  the  Leases  and
                  Contracts in order to consummate the transactions contemplated
                  by this Agreement.

         8.1.6    Performance of Obligations.

                  Perform  all  the   obligations  of  Seller  relating  to  the
                  Purchased  Assets and the Business without Material default in
                  accordance with the past practices of Seller.

         8.1.7    Approvals; Consents.

                  Except as otherwise  approved by  Purchaser in writing,  which
                  approval shall not be unreasonably withheld, (i) promptly file
                  the notification  required of it under the HSR Act relating to
                  the  purchase  and sale  contemplated  hereby  with the United
                  States Department of Justice and the Federal Trade Commission,
                  (ii) respond to inquiries from the United States Department of
                  Justice and the Federal Trade  Commission  in connection  with
                  such  notification,  (iii) request early termination or waiver
                  of the waiting period under the HSR Act (iv) assist  Purchaser
                  and its  Affiliates  in  fulfilling  Purchaser's  covenants in
                  Section  9.3 and (v) use  commercially  reasonable  efforts to
                  obtain,  in  writing,  as  promptly  as  possible,  all  other
                  approvals  and  consents  required to be obtained by Seller in
                  order  to  effectuate  the  transactions  contemplated  hereby
                  transfer all Permits (to the extent assignable) and to deliver
                  to Purchaser  copies of such  approvals and  consents.  Seller
                  shall  use  commercially  reasonable  efforts  to  obtain  the
                  consents to assignment referred in Schedule 1.42 and to obtain
                  the consent of any third  party  whose  consent is required to
                  assign or make  available to Purchaser  any secrecy  agreement
                  relating exclusively to the Business.

         8.1.8    Notice of Material Damage.

                  Give to Purchaser prompt written notice of any Material damage
                  by fire or  other  casualty  to the  Purchased  Assets  or the
                  Business.

                                      -52-







         8.1.9    Advise of Changes.

                  Advise  Purchaser  promptly in writing of any fact  which,  if
                  known on the date  hereof,  or at the time of  Closing,  would
                  have been required to be set forth or disclosed in or pursuant
                  to this Agreement,  or which would result in the breach in any
                  Material  respect  by  Seller  of any of its  representations,
                  warranties, covenants or agreements hereunder.

         8.1.10   Pay Employees to Closing Date.

                  Pay all  wages,  salaries  and other sums due  Employees,  and
                  payroll  taxes  thereon,  through the close of business on the
                  day prior to the  Closing  Date and all  vacation  included as
                  part of the Retained Liabilities,  except that with respect to
                  the hourly  employees at the Lake Zurich,  Illinois  Facility,
                  and Pottsville,  Pennsylvania Facility,  Seller shall pay such
                  hourly  employees  through the last shift ending  before 12:01
                  a.m.
                  on the Closing Date.

         8.1.11   Retain Employees.

                  Use its best  efforts to retain all  Employees  to be hired by
                  Purchaser in their current positions through the Closing Date,
                  except that Seller may  terminate  any  Employee  for cause or
                  poor performance  consistent with Seller's existing employment
                  practices.

         8.1.12   Compliance with Agreement.

                  Seller  shall use  commercially  reasonable  efforts to do all
                  such  acts and take all  such  measures  as may be  reasonably
                  necessary  to  comply  with the  representations,  agreements,
                  conditions and other provisions of this Agreement.

         8.1.13   Title Commitments.

                  Seller has  furnished  Purchaser  a copy  of a  Commitment for
                  Title  Insurance  prepared by Chicago Title Insurance Company,
                  Order No: 1409 000617734 LK, Effective  Date:  August 3, 1998,
                  for the Real Property Owned  in Lake Zurich, Illinois as shown
                  on Schedule 1.65(a), together with  a copy of the

                                      -53-





                  documents referenced in Schedule B of that commitment.  Seller
                  has also furnished  Purchaser a copy of a Commitment for Title
                  Insurance   prepared  by  Chicago  Title  Insurance   Company,
                  Commitment  Number:  907378C,  Effective  Date:  September 21,
                  1998, for the Real Property Owned in Pottsville,  Pennsylvania
                  as  shown on  Schedule  1.65(b),  together  with a copy of the
                  documents   referenced  in  Schedule  B  of  that  commitment.
                  Collectively,  the  commitments  are referred to herein as the
                  "Title  Commitments".  Seller shall have no further  duties or
                  obligations  to  Purchaser  with  respect  to title  insurance
                  matters or the Title Commitments.

         8.1.14   Surveys.

                  Seller  has  furnished  to  Purchaser  a  survey  of the  Real
                  Property  Owned in Lake Zurich,  Illinois as shown on Schedule
                  1.65(a)  prepared by E. Dembrowski & Associates,  Inc.,  dated
                  February  13,  1996 as Order  No.  96021.  Purchaser  may,  at
                  Purchaser's  sole cost and  expense,  cause to be prepared and
                  delivered  to  Purchaser  and Seller on or before the  Closing
                  Date,  any update to the survey on the Real Property  Owned in
                  Lake  Zurich,  Illinois  that is  desired by  Purchaser  and a
                  survey of the Real Property Owned in Pottsville,  Pennsylvania
                  as shown on Schedule 1.65(b), by surveyors  registered as such
                  under  the  laws of the  state  in  which  the  relevant  Real
                  Property  Owned is  located.  Collectively,  the  surveys  are
                  referred  to herein as the  "Surveys".  Seller  shall  have no
                  further  duties or  obligations  to Purchaser  with respect to
                  survey matters or the Surveys.

         8.2      Prohibited Actions.

                  Except as expressly  contemplated by this  Agreement,  between
                  the  date  of this  Agreement  and the  Closing  Date,  in its
                  conduct of the Business, Seller shall not:

         8.2.1    Sale of Purchased Assets.

                  Sell, transfer,  assign,  lease, encumber or otherwise dispose
                  of any of the  Purchased  Assets  other  than in the  ordinary
                  course of the Business.

                                      -54-







         8.2.2    Business Changes.

                  Change in any Material respect the character of the Business.

         8.2.3    Incurrence of Material Obligations.

                  Except  as set  forth on  Schedule  8.2.3,  incur any fixed or
                  contingent obligation or enter into any agreement,  commitment
                  or  other  transaction  or  arrangement  that  is  not  in the
                  ordinary  course of the  Business  and that is Material to the
                  Business individually or in the aggregate.

         8.2.4    Incurrence of Liens.

                  Subject  any of the  Purchased  Assets to any  Material  lien,
                  security  interest  or  any  other  Encumbrance,   other  than
                  Permitted Encumbrances.

         8.2.5    Change in Employee Compensation and Benefits.

                  Increase the rate of  compensation  paid, or pay any bonus, to
                  Employees  of the  Business,  except  for those  increases  or
                  bonuses  planned to be given to Employees prior to the date of
                  this  Agreement  effective  on  or  after  the  date  of  this
                  Agreement (as disclosed in writing  separately to  Purchaser).
                  Seller  further  agrees  not to  establish  or  adopt  any new
                  pension  or   profit-sharing   plan,   deferred   compensation
                  agreement  or  employee   benefit   arrangement  of  any  kind
                  whatsoever covering or affecting  Employees;  however,  Seller
                  may amend its Payroll Practices/Employee Arrangements or ERISA
                  Plans  so  that  all  vested  Employees  can  obtain  whatever
                  benefits  are due to them  consistent  with  Seller's  Payroll
                  Practices/Employee  Arrangements,  ERISA  Plans  and the Code;
                  provided, however, that Seller may change or institute any pay
                  or  benefits  it  deems  necessary  as a  result  of  Seller's
                  bargaining  regarding  sale  of the  Pottsville,  Pennsylvania
                  Facility  with  the  Union   representing   Employees  at  the
                  Pottsville,  Pennsylvania  Facility  which  does  result in an
                  obligation for Purchaser.

                                      -55-






         8.2.6    Publicity; Advertisement.

                  Except  as  required  by  law  or as  mutually  agreed  by the
                  Parties,  publicize,  advertise  or  announce,  and  shall use
                  commercially  reasonable  efforts  not  to  permit  any of its
                  officers,  directors,  employees, agents or representatives to
                  publicize,  advertise or announce,  to any third party, except
                  as required  pursuant to this  Agreement to obtain the consent
                  of such third party, and except as required in the interest of
                  the Business,  the entering into of this Agreement,  the terms
                  of this Agreement or the transactions contemplated hereby.

         8.2.7    No Release.

                  Except in the ordinary course of the Business, cancel, release
                  or  relinquish  any  individual  Material  debts of or  claims
                  against  others held by Seller with respect to the Business or
                  waive any rights relating to the Business.

         8.2.8    No Termination or Modification.

                  Except to the extent  required  to  transfer  the  Business or
                  unless  agreed  to  by  Purchaser  in  writing,  terminate  or
                  Materially modify any lease,  contract,  governmental license,
                  permit  or other  authorization  or  agreement  affecting  the
                  Business  or the  Purchased  Assets or the  operation  thereof
                  other than  arrangements  with  Affiliates,  or  agreements or
                  permits that will not be assigned to Purchaser.

         8.2.9    No Breach.

                  Do or omit any act that  would  cause a  Material  default  by
                  Seller  under,  or breach by Seller  of,  any of the Leases or
                  Contracts that are Assumed Contracts.

         8.2.10   No Negotiations.

                  Directly or indirectly  (through a representative or otherwise
                  including its directors, officers, employees,  representatives
                  or agents) solicit,  initiate,  respond  favorably to, condone
                  inquiries or proposals from, encourage or

                                      -56-







                  furnish any information to any prospective buyer,  commence or
                  continue  presently ongoing  negotiations with any party other
                  than the Purchaser, or enter into any agreement with any party
                  other than the Purchaser  concerning  the offer to sell or the
                  sale of the  Business  or the  Purchased  Assets  or any  part
                  thereof.

         8.3      Other Matters.

                  8.3.1    Environmental Assessment.

                           On or before the date hereof,  Seller  shall  provide
                           Purchaser with an environmental  assessment performed
                           by a  competent  professional,  and  constituting  at
                           least  a  records   search  and   visual   inspection
                           ("Environmental  Assessment"),  with  respect  to the
                           Facilities  and the  Real  Property  Owned.  The work
                           product of the Environmental Assessment will be owned
                           by Seller but the results  shall be available to both
                           Parties.

         8.3.2    Confidentiality.

                  Subject to the Closing,  and as an  inducement to Purchaser to
                  execute  this   Agreement   and   complete  the   transactions
                  contemplated  hereby,  and in order to preserve  the  goodwill
                  associated  with the  Business,  Seller  hereby  covenants and
                  agrees that Seller  shall not at any time prior to the time of
                  Closing, except as explicitly requested by Purchaser, disclose
                  any  Confidential  Information  (as  defined in Section  12.1)
                  concerning the Business  other than in the ordinary  course of
                  the Business.

9.0      COVENANTS OF PURCHASER PRIOR TO CLOSING DATE

9.1      Required Actions.

         Between  the  date  of this  Agreement  and the  time  of  Closing,  in
         Purchaser's conduct of its business, Purchaser shall:

         9.1.1    Confidentiality.

                  Not publish or disclose or use and not authorize or permit any
                  of   its   officers,    employees,    directors,   agents   or
                  representatives or any third party to publish

                                      -58-






                  or  disclose  or use,  except as  required  by law,  any trade
                  secrets  or  other  Confidential  Information  or any  data or
                  business or financial books,  records or other  information of
                  or  pertaining  to  Seller,   which  have  been  furnished  to
                  Purchaser  by  Seller  or to  which  Purchaser,  or any of its
                  officers,   employees,   directors,   agents,   attorneys   or
                  accountants,  or any  financial  institution  have had  access
                  during  any   investigation   made  in  connection  with  this
                  Agreement and which is not  otherwise  available to Purchaser,
                  and Purchaser shall observe and perform all of its commitments
                  as set forth in the Confidentiality Agreement.

         9.1.2    Advise of Changes.

                  Advise Seller  promptly in writing of any fact which, if known
                  at the date hereof or at the time of Closing,  would have been
                  required to be set forth or  disclosed  in or pursuant to this
                  Agreement, or which would result in the breach in any Material
                  respect   by   Purchaser   of  any  of  its   representations,
                  warranties, covenants or agreements hereunder.

         9.1.3    Compliance with Agreement.

                  Purchaser shall use commercially  reasonable efforts to do all
                  such  acts and take all  such  measures  as may be  reasonably
                  necessary  to  comply  with the  representations,  agreements,
                  conditions and other provisions of this Agreement.

         9.1.4    Publicity; Advertisement.

                  Except  as  required  by  law  or as  mutually  agreed  by the
                  Parties,  not  publicize,   advertise  or  announce,  and  use
                  commercially  reasonable  efforts  not  to  permit  any of its
                  officers,  directors,  employees, agents or representatives to
                  publicize,  advertise  or  announce,  to anyy third  party the
                  entering into of this  Agreement,  the terms of this Agreement
                  or the transactions contemplated hereby.

                                      -58-







9.2      Investigation.

         Prior to the  Closing,  Purchaser  shall  use  commercially  reasonable
         efforts to conduct its  investigation  of the Business in such a manner
         as to prevent disruption of relations with the employees, customers and
         suppliers of Seller.

9.3      Approvals; Consents.

         Except as otherwise approved by Seller in writing, which approval shall
         not be unreasonably withheld,  Purchaser shall, and shall cause each of
         its  Affiliates  to, (i) promptly  file any  notification  and make any
         payment  required of it under the HSR Act  relating to the purchase and
         sale  contemplated  hereby with the United States Department of Justice
         and the Federal Trade  Commission,  (ii) respond to inquiries  from the
         United States Department of Justice and the Federal Trade Commission in
         connection with such  notification,  (iii) request early termination or
         waiver of the waiting  period under the HSR Act and (iv) assist  Seller
         in fulfilling its covenants in Section 8.1.7.

10.0     CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER

         The  obligations of Purchaser  hereunder are subject to the fulfillment
         at the time of Closing of each of the following conditions:

10.1     Accuracy of Representations and Warranties.

         Except  as   affected  by   transactions   contemplated   hereby,   the
         representations  and warranties of Seller  contained in this Agreement,
         the Ancillary  Agreements and all other agreements  described herein to
         which Seller is a party shall be true in all  Material  respects at and
         as of the time of Closing with the same force and effect as though made
         at and as of the date  hereof.  Seller  may  revise or  supplement  the
         Exhibits  or  Schedules  attached to this  Agreement  at any time at or
         prior  to the time of  Closing,  provided,  however,  that,  except  as
         provided in Sections  1.20 and 2.1.3,  no such  revision or  supplement
         shall be made (A) unless  consented  to by Purchaser or (B) unless such
         revision  or  supplement  shall  not  (i)  individually,  (ii)  in  the
         aggregate,  with  all  other  revisions  or  supplements,  result  in a
         Material  adverse  effect on the Business or the  Purchased  Assets and
         exceed $500,000.

                                      -59-






10.2     Performance of Agreement.

         All obligations,  agreements and covenants and conditions  contained in
         this  Agreement to be performed or complied  with by Seller at or prior
         to the time of Closing (considered individually and collectively) shall
         have been duly performed and complied with in all Material respects).

10.3     Seller's Certificate.

         Purchaser  shall have received a certificate  from Seller,  dated as of
         the time of Closing,  reasonably  satisfactory in form and substance to
         Purchaser  and its counsel,  certifying  as to the  fulfillment  of all
         matters specified in Section 10.1 and Section 10.2 hereof.

10.4     Officer's Certificate.

         Purchaser  shall have received a  certificate,  dated as of the time of
         Closing,  of an officer of Seller with  respect to the  incumbency  and
         specimen   signature  of  each  officer  or  representative  of  Seller
         executing this Agreement,  the certificate  referred to in Section 10.3
         and the Ancillary Agreements to which Seller is a party.

10.5     Good Standing Certificates.

         Purchaser shall have received from Seller  certificates from the office
         of the  Secretary  of State of New Jersey with  respect to Seller dated
         within ten (10)  business  days before the  Closing  Date to the effect
         that Seller is in good standing under the laws of such state.

10.6     Absence of Proceedings.

         Except for items listed or  described on Schedule 6.7 or Schedule  6.8,
         6.9 or 6.11  that may be  continuous  in  nature,  no  action,  suit or
         proceeding  before any court or any  governmental  agency or  authority
         shall have been commenced or threatened,  and no  investigation  by any
         governmental  or  regulatory  authority  shall have been  commenced  or
         threatened,  against  Purchaser,  Seller  or  any of  the  officers  or
         directors  of  each  of  them,  seeking  to  restrain  or  prevent  the
         transactions  contemplated  hereby,  or  challenging  the  validity  or
         legality of any such transactions,

                                      -60-







         or seeking damages in excess of One Hundred Thousand Dollars ($100,000)
         in  connection  with such  transactions,  or  imposing a  condition  or
         restriction  that  Materially  and  adversely  may affect the Purchased
         Assets or the condition or operations of the Business.

10.7     Actions and Proceedings.

         All corporate actions, proceedings,  instruments and documents required
         to  carry  out  the  transactions  contemplated  by this  Agreement  or
         incidental  thereto  and all  other  related  legal  matters  shall  be
         reasonably  satisfactory  to counsel for  Purchaser,  and such  counsel
         shall have been furnished with such certified  copies of such corporate
         actions and proceedings and such other  instruments and documents as it
         shall have reasonably requested.

10.8     HSR Act Waiting Period.

         Any waiting period  applicable to the  consummation of the transactions
         contemplated  by this Agreement under the HSR Act shall have expired or
         terminated,   and  any  other  statutory  requirements  for  the  valid
         consummation of the  transactions  contemplated  hereby shall have been
         fulfilled.

10.9     Permits and Consents.

         Any  third  party and  governmental  permits,  consents,  certificates,
         approvals,  licenses,  waivers,  transfers of intellectual property, or
         authorizations necessary for the valid consummation of the transactions
         contemplated  hereby and  necessary  to operate the  Business  from and
         after  Closing  shall have been obtained and shall be in full force and
         effect.  Notwithstanding  the foregoing  and except for those  consents
         which are  identified  on Schedule 1.42 by the Purchaser to require the
         receipt  of such  consent as a  condition  to  Closing,  receipt of the
         consent of any third party to the  assignment of any Lease and Contract
         shall not be a condition to Purchaser's  obligation to close,  provided
         that the aggregate of all such Leases and Contracts for which  consents
         have not been obtained does not represent a substantial  portion of the
         revenues or expenditures of the Business.

                                      -61-







10.10    Section 1445 Affidavit.

         Seller shall have executed and provided to Purchaser a  certificate  to
         the  effect   that   Seller  is  not  a  "foreign   person,"   "foreign
         corporation,"  "foreign  partnership,"  "foreign  trust,"  or  "foreign
         estate"  under Section 1445 of the Code and  containing  all such other
         information  as is  required to comply  with the  requirements  of such
         Section 1445.

10.11    Resin Contract.

         Seller shall have  executed and delivered to Purchaser the Resin Supply
         Contract referenced in Section 5.2.8 hereof.

10.12    Proprietary Assets.

         Seller  shall  have   executed  and  delivered  to  Purchaser  the  (i)
         Technology  License  Agreement  referenced  in  Section  5.2.5 and (ii)
         Trademark Agreements referenced in 5.2.4.

10.13    Required Financial Statements.

         Purchaser  shall have  obtained,  at its sole  expense,  all  financial
         statements and supporting  information,  and the unqualified  report of
         PricewaterhouseCoopers  LLP relating thereto,  required by Rule 3-05 of
         Regulation S-X  promulgated  by the Securities and Exchange  Commission
         with respect to  Purchaser's  acquisition of the.  Business.  purchaser
         agrees to use its  commercially  reasonable  efforts  to  complete  the
         process of obtaining such  statements,  information  and report by five
         (5) days before  Closing,  subject to Seller's  compliance with Section
         8.1.1.

10.14    Key Employees.

         (i) Eighty percent (80%) of the Employees listed by Purchaser in a side
         letter,  dated the date hereof and  delivered  simultaneously  with the
         execution of this Agreement (the "Key Employees"),  shall have accepted
         employment  with  Purchaser  as of the time of  Closing  and (ii)  with
         respect to the Sales and Marketing and Technology  functional  headings
         set forth in the side letter, not more than three (3) of the Key

                                      -62-







         Employees  listed  under  either one of those two  functional  headings
         shall have declined Purchaser's offer of employment.

10.15    Title Insurance.

         Purchaser  shall have  obtained from Chicago  Title  Insurance  Company
         policies  of title  insurance  consistent  with the  Title  Commitments
         provided pursuant to Section 8.1.13 hereof,  dated the Closing Date, in
         face amounts and in form reasonably  satisfactory to Purchaser insuring
         Purchaser's  interest in the Real  Property  subject  only to Permitted
         Encumbrances  and  such  other  exceptions  thereto  as are  reasonably
         satisfactory to Purchaser.

10.16    Assignment of Key Customer Contracts.

         Seller  (i)  shall  have  assigned  to  Purchaser  the  FemCare  supply
         agreement  for  Europe  and the  letter of  intent,  if any,  for North
         America  between Procter & Gamble (the "Key Customer") and the Business
         upon  substantially  the same terms  (including  price and volumes) and
         conditions  contained  in such  FemCare  supply  agreement or letter of
         intent (as applicable) on the date hereof,  (ii) shall have provided to
         the  Key  Customer  any  notice   required  in  connection   with  such
         assignments, and (iii) the Key Customer shall not have objected to such
         assignment  within  the  applicable  time  period  set  forth  in  such
         agreement and letter of intent (if any).

10.17    Seller  shall  have   delivered  to  Purchaser  commercially reasonable
         Freedom of Operation or Validity Opinions as listed on Schedule 10.17.

11.0     CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER

         The obligations of Seller  hereunder are subject to the fullfillment at
         the time of Closing of each of the following conditions:

11.1     Accuracy of Representations and Warranties.

         Except  as   affected  by   transactions   contemplated   hereby,   the
         representations   and   warranties  of  Purchaser   contained  in  this
         Agreement,  the Ancillary Agreements and all other agreements described
         herein, to which either is a party shall be true in all

                                      -63-







         Material respects on and as of the time of  Closing with the same force
         and effect as though made on and as of the date hereof.

11.2     Performance of Agreement.

         All obligations,  agreements and covenants  contained in this Agreement
         to be  performed  or  complied  with by them at or prior to the time of
         Closing (considered individually and collectively) shall have been duly
         performed and completed within all Material respects.

11.3     Purchaser's Certificate.

         Seller shall have received a certificate  from  Purchaser,  dated as of
         the time of Closing,  reasonably  satisfactory in form and substance to
         Seller and its counsel, certifying as to the fulfillment of all matters
         specified in Section 11.1 and Section 11.2 hereof.

11.4     Officer's Certificate.

         Seller  shall  have  received  a  certificate,  dated as of the time of
         Closing,  of an officer of Purchaser with respect to the incumbency and
         specimen  signature  of each  officer or  representative  of  Purchaser
         executing this Agreement,  the certificate  referred to in Section 11.3
         and the Ancillary Agreements to which Purchaser is a party.

11.5     Good Standing Certificates.

         Seller shall have received from Purchaser  certificates from the office
         of the State  Corporation  Commission of the  Commonwealth  of Virginia
         with respect to Purchaser  dated within ten (10)  business  days before
         the Closing Date to the effect that Purchaser is in good standing under
         the laws of such state.

11.6     Absence of Proceedings.

         Except for items listed or described on Schedule 6.7 or Schedule 6.8 or
         Schedule  6.9 or Schedule  6.11 that may be  continuous  in nature,  no
         action,  suit or proceeding before any court or any governmental agency
         or  authority   shall  have  been  commenced  or  threatened,   and  no
         investigation  by any  governmental or regulatory  authority shall have
         been commenced or threatened, against Purchaser, Seller, or

                                      -64-







         any of the officers or directors of any of them, seeking to restrain or
         prevent  the  transactions  contemplated  hereby,  or  challenging  the
         validity  or legality of any such  transactions  or seeking  damages in
         excess of One Hundred  Thousand  Dollars  ($100,000) in connection with
         such   transactions  or  imposing  a  condition  or  restriction   that
         Materially  and  adversely  may  affect  the  Purchased  Assets  or the
         condition or operations of the Business.

11.7     Actions and Proceedings.

         All corporate actions, proceedings,  instruments and documents required
         to  carry  out  the  transactions  contemplated  by this  Agreement  or
         incidental  thereto  and all  other  related  legal  matters  shall  be
         reasonably  satisfactory to counsel for Seller,  and such counsel shall
         have been  furnished  with  such  certified  copies  of such  corporate
         actions and proceedings and such other  instruments and documents as it
         shall have reasonably requested.

11.8     HSR Act Waiting Period.

         Any waiting period  applicable to the  consummation of the transactions
         contemplated  by this Agreement under the HSR Act shall have expired or
         terminated,   and  any  other  statutory  requirements  for  the  valid
         consummation of the  transactions  contemplated  hereby shall have been
         fulfilled.

11.9     Consents.

         Any third-party and governmental consents,  approvals or authorizations
         necessary for the valid  consummation of the transactions  contemplated
         hereby shall have been obtained.

12.0     OBLIGATIONS AFTER THE CLOSING DATE

12.1     Confidentiality.

         (a) Unless this  Agreement is terminated  prior to the time of Closing,
         Seller hereby  covenants and agrees that for a period of five (5) years
         following the Closing  Date,  except as may be required by law, rule or
         regulation  or court  order,  or except as  required  pursuant  to this
         Agreement to obtain the consent of a third party, it will not

                                      -65-






         reveal,  divulge or make known to any Person  (other than  Purchaser or
         its  agents  or  Affiliates)  any  information  as it  relates  to this
         Agreement,  the  transactions  contemplated  hereby  or  the  Business,
         including,  but not  limited  to,  customer  lists  or  other  customer
         information, marketing plans or proposals, and other items described in
         Section 2.1.5,  financial  information or any data,  written  material,
         written  summaries or oral materials,  records or documents solely used
         by or solely  relating  to the  Business  which  are of a  confidential
         nature  (collectively,  the "Confidential  Information").  Confidential
         Information   includes  any  such  information   whether  or  not  such
         information was developed,  devised or otherwise created in whole or in
         part by the efforts of Seller.  After the Closing Date, Purchaser shall
         continue to observe and perform all its agreements and undertakings set
         forth in the Confidentiality Agreement with respect to all Confidential
         Information  provided  by Seller to  Purchaser  which  does not  relate
         solely and  exclusively  to the Business,  the Purchased  Assets or the
         Assumed  Liabilities.  Notwithstanding  the above,  the  obligations of
         Seller and Purchaser  pursuant to this Section 12.1 shall not extend to
         any  information  which (i) is compelled to be disclosed by judicial or
         administrative process (including without limitation in connection with
         obtaining   the   necessary   approvals  of  this   Agreement  and  the
         transactions contemplated hereby) or by other requirements of law; (ii)
         was already  known to Purchaser or Seller at the time of  disclosure as
         is evidenced by written  documentation,  except for Seller's obligation
         to keep Confidential  Information about the Business  confidential from
         third parties;  (iii) is or becomes  generally  available to the public
         other than as a result of  disclosure  by Purchaser  or Seller,  as the
         case  may  be;  (v) is  disclosed  by  someone  who is not  bound  by a
         confidentiality  obligation to Purchaser or Seller, as the case may be,
         with  respect  to the  information  disclosed  or (v)  nothing  in this
         Section, however, shall prohibit the use of Confidential Information as
         in the  reasonable  opinion of the Counsel of the Party wishing to do a
         filing are necessary or appropriate for a governmental filing, provided
         that the Party  making  such a filing  shall give  prior  notice to the
         other Party of such filing.

         (b) Each of the  parties  hereto  recognizes  that any  breach  of this
         Section  would  result in  irreparable  harm to the other party to this
         Agreement and therefore either Purchaser or Seller shall be entitled to
         an injunction,  or any other form of equitable  relief, to prohibit any
         such breach or anticipated breach without the necessity of

                                      -66-






         posting a bond,  cash or  otherwise,  in addition to all of their other
         legal and equitable remedies.

12.2     Covenant Not to Interfere.

         Seller and  Purchaser  hereby  covenant  and agree  that,  unless  this
         Agreement  is  terminated,  for a period  of five (5)  years  after the
         Closing Date,  they will not,  whether for their own account or for the
         account of any other  Person,  endeavor  to entice  away from the other
         Party any person who is an  employee  of such  Party  (except  with the
         written  permission  of  the  employer  or  as  otherwise  specifically
         contemplated by this Agreement).

12.3     Transition of Employees.

         From and after the Closing Date,  Purchaser and Seller shall  cooperate
         to  ensure  an  orderly  transition  of the  Hired  Employees,  and the
         administration  of Seller's and  Purchaser's  employee  benefit  plans,
         programs and policies.

12.4     Management Assistance by Seller.

         Seller shall  provide such  accounting  and other  support  services to
         Purchaser  following  the Closing  Date as are  reasonably  required in
         connection with the transfer of the Business to Purchaser in accordance
         with the terms set forth in Schedule 12.4.  Seller shall cooperate with
         Purchaser's  auditors in connection  with (i) the preparation of income
         statements  for the period  January 1, 1999 through the Closing Date, a
         statement  of cash flow for such  period and a balance  sheet as of the
         Closing Date and (ii) the  preparation of any report or filing required
         in  connection  with  the  transactions   contemplated   hereby,   such
         cooperation  to be provided by Seller at no cost to  Purchaser.  Seller
         shall not,  however,  be  required  to  disclose  to  Purchaser  any of
         Seller's Proprietary Information.

12.5     Further Assurances of Seller.

         Seller shall  execute,  acknowledge  and deliver to Purchaser,  without
         further  consideration,  all  such  further  assignments,  conveyances,
         endorsements,  deeds,  special  powers of attorney,  consents and other
         documents,  and take such other  action,  as Purchaser  may  reasonably
         request (i) to transfer to and vest in Purchaser,

                                      -67-






         and protect its rights, title and interest in, all the Purchased Assets
         and (ii) otherwise to consummate the transactions  contemplated by this
         Agreement.  In addition,  from and after the Closing Date, Seller shall
         afford  to  Purchaser  and  its   attorneys,   accountants   and  other
         representatives  access, during normal business hours, to any books and
         records  relating  to  the  Business  that  Seller  may  retain  as may
         reasonably be required in connection  with the preparation of financial
         information  or tax  returns of  Purchaser.  Subject  to Section  12.4,
         Purchaser shall reimburse Seller for all reasonable out-of-pocket costs
         and expenses  paid to third  parties  whose  assistance is requested by
         Purchaser pursuant to this Section 12.5.

12.6     Further Assurances of Purchaser.

         From and after the Closing Date,  Purchaser  shall afford to Seller and
         its attorneys,  accountants and other  representatives  access,  during
         normal  business  hours,  to such  books and  records  relating  to the
         Business as may reasonably be required.  Purchaser  shall  cooperate in
         all reasonable respects with Seller with respect to its former interest
         in the Business and in connection  with financial  account  closing and
         reporting,  and  claims and  litigation  asserted  by or against  third
         parties,  including,  but not limited to, making employees available to
         assist with,  or provide  information  in  connection  with,  financial
         account closing and reporting and claims and litigation, provided, that
         Seller reimburses  Purchaser for its reasonable out-of- pocket expenses
         in connection therewith.

12.7     Retention of and Access to Records; Cooperation.

         For a period of not less than ten (10) years  after the  Closing  Date,
         Purchaser shall preserve and retain the corporate,  accounting,  legal,
         auditing  and other books and records of the Business  (including,  but
         not limited to, any environmental records, disposal manifests and other
         disposal  records,  governmental or  non-governmental  actions,  suits,
         proceedings or investigations arising out of the conduct and operations
         of the Business prior to the Closing  Date);  provided,  however,  that
         such ten  (10)-year  period  shall be  extended  in the event  that any
         action,  suit,  proceeding or  investigation  has been  commenced or is
         pending or threatened at the  termination of such ten (10)-year  period
         and  such  extension  shall  continue  until  any  such  action,  suit,
         proceeding  or  investigation  has been  settled  through  judgment  or
         otherwise or is no longer  pending or threatened.  Notwithstanding  the
         foregoing, Purchaser may discard or

                                      -68-






         destroy any of such books and records prior to the end of such ten-year
         period or period of extension,  if  applicable,  if it has given Seller
         sixty (60) days' prior written notice of its intent to do so and Seller
         has not taken  possession  of such books and  records,  at its expense,
         within  such sixty  (60)-day  period.  Notwithstanding  anything to the
         contrary in this Section  12.7,  Seller shall retain all tax records of
         the  Business  prepared  prior to the  Closing  Date.  Purchaser  shall
         provide  reasonable  access  to  Seller  to  review  any  records  that
         Purchaser  retains and to make copies thereof and shall cooperate fully
         with Seller (including,  without limitation, making available employees
         to assist  Seller at  reasonable  rates to be agreed by the Parties) in
         preparation and  documentation of all necessary  financial  statements,
         tax returns and reports,  or the resolution of any tax audits,  claims,
         litigation  or disputes  concerning  Seller's  tax  liabilities  or the
         Assumed  Liabilities or for any other reasonable  business purpose.  In
         the event  Purchaser  sells or otherwise  transfers the Business before
         the tenth (10th)  anniversary of the Closing Date,  Purchaser agrees to
         include  in  the  documents  transferring  such  Business  a  provision
         obligating   the  new   purchaser  or  transferee  to  abide  by  these
         provisions.

12.8     Name.

         As soon as reasonably  practicable  after the Closing  Date,  but in no
         event later than thirty (30) days after the Closing Date in the case of
         exterior  signs and  office and lobby  suite  signs and sixty (60) days
         after the Closing Date for the other matters covered by this paragraph,
         Purchaser shall remove from all of the Purchased  Assets (unless agreed
         to by Seller or as set forth in the  Existing  Inventory  License)  all
         signs and other  materials  containing  the name "Exxon" or any variant
         thereof, and make any requisite filings with, and provide any requisite
         notices to, the appropriate federal, state or local agencies to place a
         title or other indicia of ownership in a name other than Exxon.  Except
         as  provided  in  the  preceding  sentence  or the  Existing  Inventory
         License, at no time after the Closing Date shall Purchaser use the name
         referenced above.  Purchaser may use existing Inventory only as set out
         in the Existing Inventory License attached hereto as Exhibit 5.2.7.

12.9     Accounts Receivable Payment.

         In the event that either Party  receives any funds from any third party
         that are properly  payable to the other Party, the Party receiving such
         funds shall promptly remit (and in

                                      -69-






         no event  more than five (5)  Business  Days)  such  funds to the Party
        entitled to such funds.

12.10    Rebates.

         To the extent not already  reflected  on the Adjusted  Working  Capital
         Worksheet  any and all rebates  paid on assigned  Contracts  and Leases
         will be prorated  between  the  Purchaser  and  Seller,  and settled up
         within thirty (30) days of receipt of such rebate.

12.11    Access for Remediation.

         12.11.1  For so long as Seller's  indemnification  with  respect to any
                  Seller Environmental Liabilities shall be in effect, Purchaser
                  shall provide to Seller a copy of all  information  or reports
                  that are provided by Purchaser to any federal,  state or local
                  agency,  with  regard  to  any  matter  related  to  Regulated
                  Substances   that  may   constitute   or   result   in  Seller
                  Environmental Liabilities. Purchaser shall promptly provide to
                  Seller copies of all reports or other  information  (including
                  photographs)  prepared,  produced  or  obtained  by  Purchaser
                  relating to any such matter.

         12.11.2  To the extent  necessary or reasonably  desirable with respect
                  to  potential  or  actual  Seller  Environmental  Liabilities,
                  Purchaser  shall  afford  Seller,  its  employees,  agents and
                  contractors,   and  all  governmental  employees,  agents  and
                  contractors having  jurisdiction over the Real Property and/or
                  Facilities, for no additional consideration, reasonable access
                  to and  rights  to  investigate  the  Real  Property  and  the
                  Facilities (including,  but not limited to, the right to enter
                  upon  the  Real  Property  and  into  the   Facilities;   take
                  photographs; drill, monitor and pump wells; take soil borings;
                  test wastes and any other  materials or substances;  excavate,
                  cap and use available land for the testing and  implementation
                  of remedial technologies; interview Purchaser's employees; and
                  inspect and copy all relevant  documents and records  relating
                  to any matter  for which  Seller  has,  or is alleged to have,
                  responsibility).  However,  except to the extent prohibited by
                  applicable law or regulatory action, the following  conditions
                  and agreements shall apply with respect to the foregoing:  (i)
                  no entry or  investigation  upon such  property  shall be made
                  except during normal business hours and then only

                                      -70-






                  upon at least five (5)  business  days'  notice to  Purchaser;
                  (ii)  Purchaser  shall be entitled to require that any persons
                  entering  upon  such   property   shall  be   accompanied   by
                  representatives  of  Purchaser at all times;  (iii)  intrusive
                  investigations,  such  as  well-drilling  or  soil  boring  or
                  testing  of any  substances,  shall be  permitted  only to the
                  extent  that  they  do  not  Materially   interfere  with  the
                  operations  of  the  Business,  upon  demonstrated  reasonable
                  cause, and upon such bases and to such extent as are consented
                  to by Purchaser, such consent not to be unreasonably withheld;
                  (iv) any samples taken shall be split between  Purchaser's and
                  Seller's  representatives  if so requested by  Purchaser;  (v)
                  Seller shall  provide to Purchaser  within five (5) days after
                  receipt  thereof  a  copy  of  any  report  or  other  written
                  information delivered to Seller by any representative  thereof
                  or   governmental    representative   with   regard   to   any
                  investigations or other activities of such representative upon
                  the   property  of  the   Business  or  the  results  of  such
                  investigations or other activities; and (vi) to the extent the
                  condition of any of the Business' property is disturbed in any
                  Material  respect as a result of any such  activities,  Seller
                  shall cause the property to be restored to  substantially  its
                  condition prior to the occurrence of such  activities.  Seller
                  shall indemnify  Purchaser with respect to any personal injury
                  or  property  damage  arising  from the  exercise  of Seller's
                  rights under this Section 12.11.2, except to the extent caused
                  by Purchaser's negligence.

                  Subject  to  the  availability  of  capacity  and  Purchaser's
                  reasonable  constraints  to  protect  health  and  safety  and
                  minimize  business  disruption,  and  provided  that  Seller's
                  activities  are  legally  permitted  and do  not  unreasonably
                  interfere with  Purchaser's  operations,  Purchaser shall make
                  available,  and allow Seller to have access to its  facilities
                  and use of its  utilities on the Real Property for the purpose
                  of Seller's  activities  in discharge of its  obligations  and
                  liabilities under this Section 12.11.  Within thirty (30) days
                  after billing,  Seller shall reimburse  Purchaser for its out-
                  of-pocket costs.

                                      -71-






12.12    Exxon/Ancon Policies.

         No claims regarding any matter whatsoever,  whether or not arising from
         events  occurring  prior to Closing,  shall be made by  Purchaser,  its
         successors  or  assigns,  against or with  respect  to any  Exxon/Ancon
         Policy, regardless of such Exxon/Ancon Policy's date of issuance.

12.13    Return of Excluded Manuals, Documents and other Media.

         If  Purchaser  discovers,  finds or  comes  into  possession  of any of
         Seller's  proprietary  manuals,  documentation  or other media excluded
         from this  Agreement  and not  assigned or  transferred  to  Purchaser,
         Purchaser shall treat such materials as  confidential,  not copy or use
         the  materials  in any way,  and  immediately  return the  materials to
         Seller.

12.14    Noncompetition.

         Seller  agrees  that,  for a period of five (5) years from the  Closing
         Date,  it will not,  directly  or  indirectly,  by  itself  or  through
         Affiliates, manufacture or sell, or act as an agent for any Person that
         manufactures  or  sells,  Film  Products  or  film  products  generally
         considered  within the industry to be  competitive  with Film Products;
         provided  that,  Seller  may  acquire  or  merge  with  a  business  or
         manufacturing  operation,  an  ancillary  portion of which  produces or
         sells   products  which  compete  with  Film  Products  (an  "Ancillary
         Business");  and provided further, that Seller and its Affiliates shall
         be  permitted to purchase or resell films that are used as an ancillary
         portion  of  their  business,  by  way  of  example  and  not by way of
         limitation  on wrapping of pallets or boxes of  products;  and provided
         further,  that  this  noncompetition  obligation  shall  not  apply  to
         activities  of Telasto for six (6) months after  Closing,  during which
         time Seller  shall  divest  Seller's  entire  interest in Telasto;  and
         provided  further,  that if Tonen  Corporation  becomes an Affiliate of
         Seller, this noncompetition obligation shall not apply to activities of
         any Tonen  Affiliate as  conducted by such Tonen  Affiliate at the time
         Tonen Corporation  becomes an Affiliate of Seller;  provided,  however,
         that Tonen Affiliates' activities that would be covered by this Section
         12.14 are not expanded  beyond the products and  geographic  scope that
         exists at the time Tonen Corporation becomes an Affiliate of Seller.

                                      -72-






12.15    Enforcement  of  Secrecy  Agreements  with  Non-hired Employees.

         Seller  shall use its  commercially  reasonable  best efforts and shall
         assist  Purchaser  in  its  efforts  to  enforce  the   confidentiality
         provisions  of all  agreements  relating to the  Business or  Purchased
         Assets of all  agreements  between  Seller and each Employee who is not
         hired by Purchaser.

12.16    Liquidation Proceeds.

         Upon the liquidation or other  divestiture by Seller of its interest in
         Telasto,  Seller shall pay to  Purchaser,  within  thirty (30) calendar
         days of  Seller's  receipt  thereof,  fifty  percent  (50%)  of the net
         proceeds  received  by  Seller  as a  result  of  such  liquidation  or
         divestiture.

13.0     TERMINATION

13.1     Termination of Agreement.

         This Agreement may be terminated:

         (i)      by the mutual consent of Seller and Purchaser;

         (ii)     by Seller or  Purchaser  if the Closing has not taken place on
                  or before June 15, 1999; provided, however, that no Party then
                  in breach of any obligations hereunder shall have the right to
                  so terminate;

         (iii)    by Seller or Purchaser  if any bona fide action or  proceeding
                  shall be pending  against  either Party at the time of Closing
                  that could result in an unfavorable judgment,  decree or order
                  that would  prevent or make unlawful the  performance  of this
                  Agreement and such action or proceeding has not been dismissed
                  or resolved within thirty (30) days after the Closing Date;

         (iv)     by Seller or  Purchaser if any agency of the federal or of any
                  state  government shall have objected at or before the time of
                  Closing to the acquisition contemplated herein or to any other
                  action required by, or in connection with, this Agreement;

                                      -73-






         (v)      by Purchaser if, at the time of Closing, any of the conditions
                  set forth in Article 10.0 hereof have not been met or have not
                  been waived by Purchaser;

         (vi)     by Seller if, at the time of  Closing,  any of the  conditions
                  set forth in Article 11.0 hereof have not been met or have not
                  been waived by Seller;

         (vii)    by  Seller  if  FTC  approval  has  not  been  granted  within
                  seventy-five  (75)  days of the  date  on  which  the  last of
                  Purchaser's or Seller's HSR filing is made; and

         (viii)   by Seller or  Purchaser  if the other Party to this  Agreement
                  has breached a covenant or obligation under this Agreement and
                  such breach has not been waived.

13.2     Return of Documents.

         If this Agreement is terminated for any reason pursuant to this Article
         13.0,  each Party  shall  return to the other Party all  documents  and
         copies  thereof  which  shall have been  furnished  to it by such other
         Party or, with the agreement of the other Party, shall destroy all such
         documents and copies  thereof and certify in writing to the other Party
         any such destruction.

13.3     Limitations on Remedies.

         In the event of any  termination  of this Agreement as provided in this
         Article 13.0, this Agreement shall forthwith  become wholly void and of
         no further  force or effect and there shall be no liability on the part
         of Purchaser,  Seller or their respective officers or directors, except
         that the  provisions of Sections  9.1.1,  13.2,  15.1,  and 15.12 shall
         remain in full force and effect.  If this  Agreement is  terminated  by
         Seller or Purchaser as permitted under Section 13.1 and not as a result
         of the  negligent  or willful  failure of either  Party to perform  its
         obligation  hereunder,  such termination  shall be without liability of
         either Party or any shareholder,  director, officer, employee, agent or
         representative of such Party. If any condition precedent to Purchaser's
         obligation  is not met and such  condition is set forth on Schedule 7.7
         or Purchaser  otherwise waives in writing such condition on or prior to
         the time of  Closing,  Seller  shall have no  liability  or  obligation
         whatsoever to Purchaser by reason of any act or omission of Seller,  or
         by reason of its breach of any  representation,  warranty,  covenant or
         agreement  set forth  herein,  solely as such act,  omission  or breach
         relates to the

                                      -74-





         failure of such  condition  precedent.  If any  condition  precedent to
         Seller's  obligation  is not met and  Seller  waives  in  writing  such
         condition on or prior to the time of Closing,  Purchaser  shall have no
         liability or  obligation  whatsoever  to Seller by reason of any act or
         omission   of   Purchaser,   or  by  reason   of  its   breach  of  any
         representation,  warranty,  covenant  or  agreement  set forth  herein,
         solely as such act,  omission or breach  relates to the failure of such
         condition precedent.

14.0     SCOPE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

14.1     Scope and Survival of Representations and Warranties.

         14.1.1   Except as and to the extent set forth in Sections  6.1 through
                  6.26 inclusive, or specifically set forth in other Transaction
                  Documents  or  Technology   License   Agreement   executed  or
                  delivered by Seller,  Seller makes no other representations or
                  warranties  whatsoever,  and  disclaims  all  liabilities  and
                  responsibilities for any representation,  warranty,  statement
                  or information made or communicated  (orally or in writing) to
                  Purchaser  (including,   but  not  limited  to,  any  opinion,
                  information   or  advice  which  may  have  been  provided  to
                  Purchaser by any  officer,  shareholder,  director,  employee,
                  agent,  consultant or  representative of Seller or by Seller's
                  counsel  or any other  agent,  consultant  or  representative)
                  other  than any  intentional  misrepresentation  or  statement
                  furnished to Purchaser by any of such persons not subsequently
                  corrected  by any of such  persons.  All  representations  and
                  warranties  of Seller set forth in Sections  6.1, 6.2, 6.3 and
                  6.6 and of  Purchaser  set forth in Sections  7.1, 7.2 and 7.3
                  shall survive until two (2) years after the Closing Date.  All
                  other  representations  and  warranties  of the Parties  shall
                  survive  until  eighteen  (18) months  after the Closing  Date
                  (other than those in Section  6.18,  which shall survive until
                  sixty (60) days after the expiration of the applicable  period
                  of  limitations  (including  any  extensions  thereof) for the
                  assessment  of Taxes.  There  shall be no  termination  of any
                  representation  or  warranty as to which a bona fide claim has
                  been  asserted  prior  to  the  termination  of  the  relevant
                  survival period,  but only with respect to such claim.  Except
                  as otherwise expressly provided in this Agreement, all

                                      -75-






                  covenants, agreements,  undertakings and indemnities set forth
                  in this Agreement shall survive indefinitely.

14.2     Indemnification by Seller.

         "Seller  General   Liabilities"  shall  mean  all  Losses  (other  than
         Environmental  Loss which shall be  governed by Section  14.6 and other
         than those related, directly or indirectly, to intellectual property as
         described  in  Section  2.2  which  shall  be  governed  solely  by the
         Technology  License  Agreement)  resulting  from,  arising  out of,  or
         incurred by any of Purchaser or its  Affiliates,  any of their officers
         and directors, or any of their respective successors or assigns (each a
         "Purchaser  Indemnified  Party")  after the Closing Date in  connection
         with (i) any breach of any of the representations or warranties made by
         Seller in any of the  Transaction  Documents,  excluding the Technology
         License Agreement;  and (ii) any default by Seller in respect of any of
         the  covenants or agreements  made by Seller in any of the  Transaction
         Documents,  excluding the Technology License Agreement;  and, (iii) any
         Retained  Liability or any attempt  (whether or not  successful) by any
         Person to cause or require  Purchaser to pay or discharge  any Retained
         Liability. Subject to the provisions of Section 13.3 and to the further
         provisions  of this  Article  14.0,  Seller  covenants  and agrees with
         Purchaser  that Seller shall pay,  and shall  indemnify  all  Purchaser
         Indemnified  Parties,  and hold  them  harmless  from,  against  and in
         respect of, any and all Seller  General  Liabilities.  For  purposes of
         determining  Losses  based  upon  clause  (i)  of  this  Section,   any
         "Material"  qualifier  contained  in  any  representation  or  warranty
         referrenced  in such  clause  (i)  shall be  disregarded,  so that such
         Losses shall be recoverable (subject to any other limitations contained
         in this Article  14.0) in full and not only to the extent of any excess
         over the $100,000 "Material" threshold.

14.3     Limitations on Seller's Obligation to Indemnify.

         14.3.1   Seller shall have no  obligation  to indemnify  any  Purchaser
                  Indemnified  Party for any Loss based upon:  (a) clause (i) of
                  Section 14.2 as to which  Seller has not received  notice of a
                  claim to  indemnification  within  eighteen  months  after the
                  Closing  Date,  except for claims to indemnify  any  Purchaser
                  Indemnified Party (i) based on a

                                      -76-






                  breach of the  representations and warranties in Sections 6.1,
                  6.2,  6.3 and 6.6 for which the period  during which notice of
                  claims  must be  given  will be two (2)  years  following  the
                  Closing Date, or (ii) based on a breach of a representation or
                  warranty  in Section  6.18 for which the period  during  which
                  notice of claims  must be given  will be sixty (60) days after
                  the  expiration  of  the  applicable   period  of  limitations
                  (including  any  extensions  thereof)  for the  assessment  of
                  Taxes;  or (b) clause (ii) of Section  14.2 as to which Seller
                  has not received notice of a claim to  indemnification  within
                  one (1)  year  after  the  expiration  date,  if any,  of such
                  covenant.  Notwithstanding  anything in this  Agreement to the
                  contrary,   Section  14.6  sets  out  the  controlling  notice
                  required for indemnification of Purchaser Environmental Loss.

         14.3.2   Subject to Section  14.6  (which  shall  provide  the sole and
                  exclusive indemnification obligation of Seller for the matters
                  covered therein), the aggregate  indemnification  liability of
                  Seller  for any Loss based  upon  clause  (i) of Section  14.2
                  shall not exceed  fifteen  percent (15%) of the Purchase Price
                  less the sum of any amounts  recovered from Seller pursuant to
                  the  indemnification  provisions  of  the  Technology  License
                  Agreement and Section 14.6.1 that in the aggregate  exceed 10%
                  of the Purchase Price. It is agreed by the parties hereto that
                  the aggregate obligation of Seller under this Section, Section
                  14.6.1 and the Technology  License  Agreement shall not exceed
                  25% of the Purchase Price.

         14.3.3   Seller  shall  have  no  indemnification   obligation  to  any
                  Purchaser  Indemnified  Party for any Loss based upon a breach
                  of clauses  (i) or (ii) of Section  14.2  unless and until the
                  total  amount of all such  Losses  based upon  clauses (i) and
                  (ii) of Section  14.2 for which Seller shall have been finally
                  determined  to  have  an  indemnification  obligation  to  all
                  Purchaser Indemnified Parties shall exceed One Million Dollars
                  ($1,000,000),  and then only to the  extent  of the  amount of
                  such excess.

         14.3.4   Notwithstanding  anything to the contrary in Section 14.3.2 or
                  Section  14.3.3,  any  breach  of  the   representations   and
                  warranties  in  Section  6.8  and  6.26  that   constitutes  a
                  Purchaser  Environmental  Loss  shall be  governed  solely and
                  exclusively  by the  indemnification  provisions  contained in
                  Section 14.6.

                                      -77-






         14.3.5   No amount  shall be  recovered  from  Seller for the breach or
                  untruth of any of Seller's  representations  or  warranties to
                  the extent  that  Purchaser  had  Knowledge  of such breach or
                  untruth at or prior to the time of Closing.

         14.3.6   Notwithstanding anything to the contrary in this Article 14.0,
                  Seller shall have an absolute  obligation to make the payments
                  and satisfy its obligations under Sections 3.4, 3.5, 4.5, 4.6,
                  clause (iii) of 14.2, 15.1 and 15.5 of this Agreement  without
                  regard to the time and  monetary  limitations  of this Article
                  14.0.

14.4     Indemnification by Purchaser.

         "Purchaser  General  Liabilities"  shall  mean all Losses  (other  than
         Environmental  Loss which shall be governed by Section 14.6)  resulting
         from,  arising out of, or incurred by any of Seller or its  Affiliates,
         any of  their  officers  and  directors,  or any  of  their  respective
         successors  or assigns  (each a "Seller  Indemnified  Party") after the
         Closing  Date  in  connection  with  (i)  any  breach  of  any  of  the
         representations or warranties made by Purchaser in this Agreement, (ii)
         any  default  by  Purchaser  in  respect  of any of  the  covenants  or
         agreements made by Purchaser in the  Transaction  Documents , (iii) any
         Assumed  Liability or any attempt  (whether or not  successful)  by any
         Person to cause or  require  Seller  to pay or  discharge  any  Assumed
         Liability;  (iv) any claim  made  after  the  Closing  against  or with
         respect  to  any  of  the  Exxon/Ancon  Policies,  regardless  of  said
         Exxon/Ancon Policy's date of issuance, by Purchaser,  its successors or
         assigns;  or  (v)  any  liability  arising  out  of or  related  to the
         operation of the Business  after the Closing Date,  other than Retained
         Liabilities.  Subject  to the  provisions  of  Section  13.3 and to the
         further provisions of this Article 14.0, Purchaser covenants and agrees
         with Seller that  Purchaser  shall pay, and shall  indemnify all Seller
         Indemnified  Parties,  and hold  them  harmless  from,  against  and in
         respect of, any and all Purchaser General Liabilities.

14.5     Limitations on Purchaser's Obligation to Indemnify.

         14.5.1   Purchaser  shall have no  obligation  to indemnify  any Seller
                  Indemnified  Party for any Loss based upon:  (a) clause (i) of
                  Section 14.4 as to which  Purchaser has not received notice of
                  a claim to  indemnification  within  eighteen months after the
                  Closing  Date,  except  for  claims to  indemnify  any  Seller
                  Indemnified

                                      -78-






                  Party based on a breach of the  representations and warranties
                  in Sections 7.1, 7.2 and 7.3 for which the period during which
                  notice of claims must be given will be two (2) years after the
                  Closing  Date;  or (b) clause (ii) of Section 14.4 as to which
                  Purchaser   has   not   received   notice   of  a   claim   to
                  indemnification  within one year after the expiration date, if
                  any,  of  such  covenant.  Notwithstanding  anything  in  this
                  Agreement  to the  contrary,  Section  14.6  sets out the sole
                  notice    requirements   for    indemnification    of   Seller
                  Environmental Loss.

         14.5.2   Purchaser  shall  have no  indemnification  obligation  to any
                  Seller  Indemnified  Party for any Loss based upon clauses (i)
                  and (ii) of Section  14.4 unless and until the total amount of
                  all Losses  listed under  clauses (i) and (ii) of Section 14.4
                  for which Purchaser shall have been finally determined to have
                  an  indemnification   obligation  to  all  Seller  Indemnified
                  Parties  shall exceed One Million  Dollars  ($1,000,000),  and
                  then only to the extent of the amount of such excess.  Subject
                  to Section  14.6.3 (which shall provide the sole and exclusive
                  indemnification   obligation  of  Purchaser  for  the  matters
                  covered therein), the aggregate  indemnification  liability of
                  Purchaser  for any Loss based upon clause (i) of Section  14.4
                  shall not exceed  fifteen  percent (15%) of the Purchase Price
                  less the sum of any amounts recovered from Purchaser  pursuant
                  to the  indemnification  provisions of the Technology  License
                  Agreement and Section 14.6.3 that in the aggregate  exceed 10%
                  of the Purchase Price. It is agreed by the parties hereto that
                  the  aggregate  obligation  of Purchaser  under this  Section,
                  Section 14.6.3 and the Technology  License Agreement shall not
                  exceed 25% of the Purchase Price.

         14.5.3   No amount shall be recovered  from Purchaser for the breach or
                  untruth of any of Purchaser's representations or warranties to
                  the extent that Seller or any of its  Affiliates had Knowledge
                  of such breach or untruth at or prior to the time of Closing.

         14.5.4   Notwithstanding  anything  to the  contrary  set forth in this
                  Article 14.0,  Purchaser shall have an absolute  obligation to
                  make the payments and satisfy its  obligations  under Sections
                  3.2.1, 3.4, 3.5, 3.7, 4.3, 4.4, 4.5, 4.6, clauses

                                      -79-






                  (iii), (iv) and (v) of Section 14.4 and 15.1 of this Agreement
                  without  regard to the time and monetary  limitations  of this
                  Article 14.0.

14.6     Environmental Indemnification.

         14.6.1   "Seller  Environmental  Liabilities"  shall  mean  all  Losses
                  incurred by any Purchaser  Indemnified Party after the Closing
                  Date (i)  following  discovery of a Regulated  Substance on or
                  beneath the Real  Property  in  connection  with the  release,
                  placement  or  deposit,  prior  to the  Closing  Date,  of the
                  Regulated  Substance  on, from or beneath the Real Property or
                  (ii) as a result of Seller's release,  placement,  disposal or
                  arranging for disposal of a Regulated  Substance from the Real
                  Property at an offsite  location  prior to the Closing Date or
                  (iii)   as  a   result   of   Seller's   non-compliance   with
                  Environmental  Law  prior  to  the  Closing  Date  ("Purchaser
                  Environmental  Loss").  Subject to the  provisions  of Section
                  14.7,  Seller  covenants and agrees with Purchaser that Seller
                  as set out below,  shall  indemnify all Purchaser  Indemnified
                  Parties, and hold them harmless,  from and against any and all
                  Seller Environmental Liabilities.  For purposes of determining
                  Seller  Environmental  Liabilities  under this  Section  14.6,
                  "Environmental  Law" and  "Regulated  Substance" as such terms
                  are used in the  definition  of Purchaser  Environmental  Loss
                  shall be  limited  to  Environmental  Law in effect as of, and
                  Regulated Substances as such, on the Closing Date.

         14.6.2   (a) Seller shall have no obligation to indemnify any Purchaser
                  Indemnified  Party for Losses due to any Regulated  Substance,
                  or any portion  thereof,  which is placed or  deposited  on or
                  beneath the Real  Property  Owned or Leased  after the Closing
                  Date.

                  (b)      Seller's aggregate liability for Seller Environmental
                           Liabilities shall not exceed five percent (5%) of the
                           Purchase Price, less the sum of any amounts recovered
                           from   Seller   pursuant   to   the   indemnification
                           provisions of the  Technology  License  Agreement and
                           Section  14.3.2 that in the  aggregate  exceed 20% of
                           the  Purchase  Price.  It is  agreed  by the  parties
                           hereto  that  the  aggregate  obligation  under  this
                           Section,  Section 14.3.2 and the  Technology  License
                           Agreement shall not exceed 25% of the Purchase Price.

                                      -80-






                  (c)      Subject to the five percent (5%) limitation set forth
                           in    Section    14.6.2(b),    Seller's    duty    of
                           indemnification   for   any   Seller    Environmental
                           Liabilities shall be further limited as follows:

                           (i)      Where notice of claim for indemnification is
                                    received by Seller within twelve (12) months
                                    after  the  Closing   Date,   Seller   shall
                                    indemnify for one hundred  percent (100%) of
                                    Purchaser  Environmental Loss; even if costs
                                    are actually  incurred more than twelve (12)
                                    months following the Closing Date;

                           (ii)     Where notice of claim for indemnification is
                                    received  by Seller  between  twelve (12) to
                                    twenty-four  (24)  months  after the Closing
                                    Date,    Seller    shall    indemnify    for
                                    seventy-five   percent  (75%)  of  Purchaser
                                    Environmental   Loss,   even  if  costs  are
                                    actually incurred more than twenty-four (24)
                                    months following the Closing Date;

                           (iii)    Where notice of claim for indemnification is
                                    received by Seller between  twenty-four (24)
                                    and thirty-six (36) months after the Closing
                                    Date,   Seller  shall  indemnify  for  fifty
                                    percent  (50%)  of  Purchaser  Environmental
                                    Loss,  even if costs are  actually  incurred
                                    more than thirty-six  (36) months  following
                                    the Closing Date;

                           (iv)     Where notice of claim for indemnification is
                                    received by Seller between  thirty-six  (36)
                                    and   forty-eight   (48)  months  after  the
                                    Closing  Date,  Seller shall  indemnify  for
                                    twenty-five  percent  (25%) of any Purchaser
                                    Environmental   Loss,   even  if  costs  are
                                    incurred more than  forty-eight  (48) months
                                    following the Closing Date; and

                           (v)      Where notice of claim for indemnification is
                                    received  by Seller  more  than  forty-eight
                                    (48)  months  following  the  Closing  Date,
                                    Seller shall have no obligation to indemnify
                                    for any Purchaser Environmental Loss.

                                      -81-






                  (d)      Subject to the  further  provisions  of this  Section
                           14.6.2,  Seller  shall  indemnify  Purchaser  to  the
                           extent Purchaser incurs  reasonable costs to mitigate
                           emergency  situations,  to respond to judicial orders
                           or to obtain immunity from further enforcement, which
                           reasonably    appear   to   be    potential    Seller
                           Environmental  Liabilities,  provided  however,  that
                           Purchaser  shall promptly notify Seller of its intent
                           to undertake such mitigation.

         14.6.3   "Purchaser  Environmental  Liabilities"  shall mean all Losses
                  incurred  by any Seller  Indemnified  Party  after the Closing
                  Date (i)  following  discovery of a Regulated  Substance on or
                  beneath the Real  Property in connection  with the  placement,
                  release or deposit  after the Closing  Date,  of the Regulated
                  Substance  on,  from or beneath  the Real  Property  (ii) as a
                  result  of  Purchaser's   release,   placement,   disposal  or
                  arranging for disposal of a Regulated  Substance from the Real
                  Property at an offsite  location,  after the  Closing  Date or
                  (iii)  as  a  result  of   Purchaser's   non-compliance   with
                  Environmental  Laws on or  after  the  Closing  Date  ("Seller
                  Environmental  Loss").  Subject  to  the  provisions  of  this
                  Section 14.7,  Purchaser covenants and agrees with Seller that
                  Purchaser   shall  pay,   and  shall   indemnify   all  Seller
                  Indemnified  Parties,  and hold them harmless from and against
                  any and all Purchaser Environmental  Liabilities regardless of
                  when notice of the claim is given by Seller.  For the purposes
                  of determining  Purchaser  Environmental  Liabilities  arising
                  under this Section 14.6,  "Environmental  Law" and  "Regulated
                  Substance" as such terms are used in the  definition of Seller
                  Environmental  Loss shall be limited to  Environmental  Law in
                  effect as of and Regulated  Substances  treated as such on the
                  date of the claim.

         14.6.4   (a) Purchaser shall have no obligation to indemnify any Seller
                  Indemnified  Party for Losses due to any Regulated  Substance,
                  or any portion  thereof,  which was placed or  deposited on or
                  beneath or  released  from the Real  Property  Owned or Leased
                  prior to the Closing Date.

                  (b)      Purchaser's   aggregate   liability   for   Purchaser
                           Environmental   Liabilities  shall  not  exceed  five
                           percent (5%) of the Purchase  Price,  less the sum of
                           any amounts recovered from Purchaser  pursuant to the
                           indemnification  provisions of the Technology License
                           Agreement and

                                      -82-






                           Section  14.5.2 that in the  aggregate  exceed 20% of
                           the  Purchase  Price.  It is  agreed  by the  parties
                           hereto  that  the  aggregate  obligation  under  this
                           Section,  Section 14.5.2 and the  Technology  License
                           Agreement shall not exceed 25% of the Purchase Price.

                  (c)      Subject to five percent (5%)  limitation set forth in
                           Section     14.6.4(b),     Purchaser's     duty    of
                           indemnification   for  any  Purchaser   Environmental
                           Liabilities shall be further limited as follows:

                           (i)      Where notice of claim for indemnification is
                                    received  by  Purchaser  within  forty-eight
                                    (48) months after  Closing  Date,  Purchaser
                                    shall  indemnify  for  one  hundred  percent
                                    (100%) of Seller Environmental Loss; even if
                                    costs  are  actually   incurred   more  than
                                    forty-eight   (48)  months   following   the
                                    Closing Date.

                           (ii)     Where notice of claim for indemnification is
                                    received by Purchaser more than  forty-eight
                                    (48)  months  following  the  Closing  Date,
                                    Purchaser   shall  have  no   obligation  to
                                    indemnify for any Seller Environmental Loss.

14.7     Procedures for Indemnification.

         14.7.1   Each Indemnified Party shall promptly give notice hereunder to
                  the indemnifying party after becoming aware of any claim as to
                  which  recovery may be sought against the  indemnifying  party
                  because of the  indemnity in this Article  14.0,  and, if such
                  indemnity shall arise from the claim of a third party, so long
                  as the  indemnifying  party assumes  liability (as between the
                  Parties) for such claim,  the  Indemnified  Party shall permit
                  the indemnifying party to assume the defense of any such claim
                  and any  litigation or other  proceeding  resulting  from such
                  claim;   provided   that  any   indemnifying   party  and  any
                  Indemnified  Party  may,  in any  event,  at its own  expense,
                  monitor  the   defense  of  any  such  claim  or   litigation.
                  Notwithstanding  the foregoing,  the right to  indemnification
                  hereunder   shall  not  be  affected  by  any  failure  of  an
                  Indemnified  Party  to give  such  notice  (or by  delay by an
                  Indemnified Party in giving such notice) unless, and then only
                  to  the  extent   that,   the  rights  and   remedies  of  the
                  indemnifying  party shall have been  prejudiced as a result of
                  the

                                      -83-






                  failure to give, or delay in giving,  such notice.  The notice
                  required  hereunder  shall specify the basis for the claim for
                  indemnification   and  the  Indemnified   Liabilities  arising
                  therefrom  to the  extent  ascertainable  at the  time  of the
                  notice.   Failure  by  an  indemnifying  party  to  notify  an
                  Indemnified  Party of its election to defend any such claim or
                  action by a third  party  within  twenty-one  (21) days  after
                  notice thereof shall have been given to the indemnifying party
                  shall  be  deemed a waiver  by the  indemnifying  party of its
                  right to defend  such  claim or  action.  Notwithstanding  the
                  foregoing,  the  indemnifying  party may, at its own  expense,
                  monitor the defense of any such claim or action.

         14.7.2   The indemnifying party shall not, in the defense of such claim
                  or any litigation resulting therefrom, consent to entry of any
                  judgment  (other  than a judgment of  dismissal  on the merits
                  without costs) or enter into any  settlement,  except with the
                  written  consent,  which  consent  shall  not be  unreasonably
                  withheld,  of the Indemnified Party, which does not include as
                  an  unconditional  term  thereof the giving by the claimant or
                  the  plaintiff  to the  Indemnified  Party a release  from all
                  liability in respect of such claim or litigation.

         14.7.3   If the indemnifying  party shall not assume the defense of any
                  such  claim  by  a  third  party,   or  litigation   resulting
                  therefrom, after receipt of notice from the Indemnified Party,
                  the  Indemnified  Party  may  defend  against  such  claim  or
                  litigation in such manner as it deems appropriate.

         14.7.4   If an  indemnifying  party shall not,  within thirty (30) days
                  after its  receipt of the notice  required  by Section  14.7.1
                  hereof,  advise the  Indemnified  Party that the  indemnifying
                  party denies or disputes the right of the Indemnified Party to
                  indemnity  in respect  of the  claim,  then the amount of such
                  claim, if specified,  shall be deemed to be finally determined
                  between the Parties hereto in the amount of such claim. If the
                  indemnifying  party shall notify the Indemnified Party that it
                  denies or disputes  any claim made by the  Indemnified  Party,
                  then  the  Parties   hereto  shall   endeavor  to  settle  and
                  compromise  such  claim,   and  if  unable  to  agree  on  any
                  settlement or compromise, such claim for indemnification shall
                  be  settled  by  appropriate  litigation,  and  any  liability
                  established  by  reason  of  such  settlement,  compromise  or
                  litigation shall be deemed to be finally determined. Any claim
                  that is finally determined in the

                                      -84-






                  manner  set  forth   above   shall be  paid  promptly  by  the
                  indemnifying party in cash.

15.0     GENERAL

15.1     Expenses.

         Except as otherwise provided in this Agreement,  and whether or not the
         transactions  herein  contemplated shall be consummated,  Purchaser and
         Seller shall pay their own fees, expenses and disbursements,  including
         the fees and  expenses of their  respective  counsel,  accountants  and
         other experts,  in connection with the subject matter of this Agreement
         and all other costs and expenses  incurred in performing  and complying
         with all conditions to be performed under this Agreement.

15.2     Waivers.

         The waiver by either Party hereto of a breach of any  provision of this
         Agreement  shall  not  operate  or be  construed  as a  waiver  of  any
         subsequent breach.

15.3     Binding Effect; Benefits.

         This Agreement  shall inure to the benefit of the Parties  hereto,  and
         shall  be  binding  upon  the  Parties  hereto  and  their   respective
         successors and assigns.  Except as otherwise set forth herein,  nothing
         in this  Agreement,  express or  implied,  is intended to confer on any
         Person other than the Parties hereto,  or their  respective  successors
         and assigns, any rights, remedies,  obligations or liabilities under or
         by reason of this Agreement.

15.4     Notices.

         15.4.1   All   notices,   requests,   demands,   elections   and  other
                  communications which either Party may desire or be required to
                  give hereunder shall be in writing and shall be deemed to have
                  been  duly  given  if  delivered  personally,  by a  reputable
                  courier  service which requires a signature upon delivery,  by
                  mailing the same by registered or certified  first class mail,
                  postage prepaid,  return receipt requested,  or by telecopying
                  with receipt  confirmation  (followed by a first class mailing
                  of the  same)  to the  Party  to whom  the same is so given or
                  made. Such notice, request, demand, waiver, election or other

                                      -85-






                  communication will be deemed to have been given on the earlier
                  of the date so  delivered  or  electronically  transmitted  or
                  seven (7) days after mailing thereof.

         15.4.2   If to Seller, to:

                  Exxon Chemical Company
                  13501 Katy Freeway
                  Houston, Texas  77079-1398
                  Attention:  Vice-President, Polyolefins Americas
                  Facsimile:  (281) 870-6411
                  With a copy to:

                  Exxon Chemical Company
                  13501 Katy Freeway
                  Houston, Texas 77079-1398
                  Attention:  Chief Attorney-Special Projects
                  Facsimile:  (281) 588-4606

         15.4.3   If to Purchaser, to:

                  Tredegar Industries, Inc.
                  1100 Boulders Parkway
                  Richmond, Virginia  23225
                  Attention:  President
                  Facsimile:  (804) 330-1777

                  With a copy to:

                  Hunton & Williams
                  951 E. Byrd Street
                  Richmond, Virginia  23219
                  Attention:  C. Porter Vaughan, III, Esq.
                  Facsimile:  (804)  788-8218

         or to such other address as either Party shall have specified by notice
         to the other Party hereto.

15.5     Bulk Transfers Laws.

         Purchaser hereby waives compliance by Seller with the provisions of any
         applicable  bulk  transfers  laws of any U.S.  jurisdiction  (including
         Section 1403 of Title 72 of the Pennsylvania  Consolidated Statutes and
         Section  5/902(d)  and 120/5j of Chapter  35 of the  Illinois  Compiled
         Statutes). Seller shall promptly pay and discharge when due, or contest
         or litigate all claims of creditors that are asserted against Purchaser
         by

                                      -86-






         reason of  Seller's  non-compliance  with such laws  provided  that the
         foregoing  shall not  affect in any way  Purchaser's  obligations  with
         respect to the Assumed  Liabilities  and agrees to  indemnify  and hold
         Purchaser  harmless from and against and shall reimburse  Purchaser for
         any and all Losses suffered by Purchaser by reason of Seller's  failure
         to pay and discharge any such claims.

15.6     Like-Kind Exchange.

         In the event Seller so elects and notifies Purchaser before the Closing
         Date,   Purchaser   agrees  to   accommodate   Seller  in  effecting  a
         tax-deferred  exchange under Internal  Revenue Code Section 1031 of all
         or part of the Purchased  Assets.  Purchaser  shall execute such escrow
         instructions,   documents,  agreements  or  instruments  to  effect  an
         exchange as Seller may reasonably request. Seller may assign its rights
         and  delegate   its  duties   under  this   Agreement  to  an  exchange
         intermediary  selected by Seller, as necessary to effect a tax-deferred
         exchange.  Notwithstanding the foregoing, Purchaser's obligations under
         this Section 15.6 shall not require it to incur any cost,  expense,  or
         liability,  and  Seller  shall  indemnify  Purchaser  against  and hold
         Purchaser  harmless from any cost,  expense,  or liability  incurred in
         connection with this Section 15.6.

15.7     Entire Agreement.

         This Agreement  (including  the Exhibits and Schedules  hereto) and the
         documents delivered pursuant hereto constitute the entire agreement and
         understanding  between the  Parties  hereto as to the matters set forth
         herein   and   supersede   and   revoke   all  prior   agreements   and
         understandings,  oral  and  written,  between  the  Parties  hereto  or
         otherwise with respect to the subject matter hereof,  but not including
         the Confidentiality Agreement and any other agreements executed between
         the Parties of even date herewith or hereafter.  No change,  amendment,
         termination or attempted  waiver of any of the provisions  hereof shall
         be binding upon any Party  unless said act is in writing  signed by the
         Party to be bound by its respective successors in interest.

                                      -87-






15.8     Counterparts.

         This  Agreement  may be  executed  simultaneously  in two  (2) or  more
         counterparts,  each of which  shall be  deemed an  original  and all of
         which together shall constitute but one and the same instrument.

15.9     Headings.

         The article, section and other headings contained in this Agreement are
         for  reference  purposes  only and  shall not be deemed to be a part of
         this  Agreement  or to affect  the  meaning or  interpretation  of this
         Agreement.

15.10    Construction.

         Within this  Agreement,  the singular  shall include the plural and the
         plural shall  include the  singular,  and any gender shall  include all
         other  genders,  all as the meaning  and the context of this  Agreement
         shall require.

15.11    Exhibits and Schedules.

         All Exhibits and Schedules hereto have been delivered by the Parties to
each other previously or simultaneously herewith.

15.12    Governing Law and Choice of Forum.

         THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE CONSTRUED IN
         ACCORDANCE WITH, AND GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW
         YORK  (EXCEPT  FOR ANY LAW  WHICH  WOULD  MAKE  THE  LAWS OF ANY  OTHER
         JURISDICTION  APPLICABLE).  ALL  CLAIMS,  DISPUTES  OR CAUSES OF ACTION
         (WITH  THE  EXCEPTION  OF THOSE TO BE  ARBITRATED  IN  ACCORDANCE  WITH
         SECTION 3.4.3)  RELATING TO OR ARISING OUT OF THIS  AGREEMENT  SHALL BE
         BROUGHT,  HEARD AND RESOLVED SOLELY AND EXCLUSIVELY BY AND IN A FEDERAL
         OR STATE  COURT  SITUATED  IN NEW YORK,  NEW YORK.  EACH OF THE PARTIES
         HERETO AGREES TO SUBMIT TO THE  JURISDICTION OF SAID COURTS AND FURTHER
         AGREES THAT PERSONAL JURISDICTION OF SAID COURT SHALL BE PROPER FOR ALL
         PURPOSES OF THIS AGREEMENT.

                                      -88-






15.13    Cooperation.

         The Parties hereto shall cooperate  fully at their own expense,  except
         as  otherwise  provided  in this  Agreement,  with each other and their
         respective  counsel and  accountants in connection with all steps to be
         taken as part of their obligations under this Agreement.

15.14    Severability.

         If any term, covenant,  condition or provision of this Agreement or the
         application   thereof   to  any   circumstance   shall  be  invalid  or
         unenforceable to any extent, the remaining terms, covenants, conditions
         and provisions of this Agreement shall not be affected thereby and each
         remaining  term,  covenant,  condition and provision of this  Agreement
         shall be valid and shall be enforceable to the fullest extent permitted
         by  law.  If any  provision  of this  Agreement  is so  broad  as to be
         unenforceable,  such provision shall be interpreted to be only as broad
         as is enforceable.

15.15    Reservations.

         Except as otherwise  agreed by the Parties  under this  Agreement,  the
         Parties reserve all rights and remedies they may have at law.

15.16    Attorneys' Fees.

         If a dispute arises among the Parties as a result of which an action is
         commenced to  interpret or enforce any of the terms of this  Agreement,
         or if there  is a breach  of any of the  terms of this  Agreement,  the
         losing or defaulting Party shall pay to the prevailing Party reasonable
         out-of-pocket   attorneys'  fees,   costs  and  expenses   incurred  in
         connection with the prosecution or defense of such action.

15.17    Successors and Assigns.

         The covenants,  agreements and conditions  contained  herein or granted
         hereby  shall  be  binding  upon and  shall  inure  to the  benefit  of
         Purchaser  and its  designated  lenders and  Seller,  and each of their
         respective  successors  and  permitted  assigns.   Neither  Seller  nor
         Purchaser shall assign,  license or otherwise  transfer any interest in
         this  Agreement or any property  which is the subject of this Agreement
         to any other

                                      -89-






         Person or entity except for a Person or entity which is an Affiliate of
         Purchaser  or  a  purchaser  from  Purchaser  who  will  remain  liable
         hereunder.  In  no  event  shall  Seller's  or  Purchaser's  rights  or
         obligations under Article 14.0 hereof be assignable without the consent
         of the other Party,  except to an Affiliate of the  assigning  Party at
         the time of the assignment,  and then only where the assignment is part
         of an overall  assignment by the assigning Party of its entire chemical
         fabricated  products  business to the assignee,  provided,  however the
         assigning  Party will  guaranty the  performance  by an Assignee of its
         obligations  under this Agreement  pursuant to a Guaranty  Agreement in
         form and substance reasonably  acceptable to the other Party hereto. It
         is specifically  agreed that Seller's  assignment of the Purchase Price
         to a trust in preparation for a like-kind exchange is not an assignment
         under this Section 15.17.

                                      -90-





IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed in their
respective names by an officer or  representative  thereof duly authorized to be
effective on the date first above written.

                           .        TREDEGAR INDUSTRIES, INC.

                           .         By:  /s/ N. A. Scher
                                         -----------------------------------
                                         Name:  Norman A. Scher
                                         Title: Executive Vice President

                                    EXXON CHEMICAL COMPANY, a
                                    division of EXXON CORPORATION

                                    By:   /s/ A. K. Barton
                                         -----------------------------------
                                         Name:  A. K. Barton
                                         Title: V.P. Polyolefin Americas


                                     -91-





                                                           FOR IMMEDIATE RELEASE

        TREDEGAR ACQUIRES EXXON'S PLASTIC FILM BUSINESS FOR $200 MILLION


         RICHMOND,  Va., May 17, 1999 -- Tredegar Industries (NYSE:TG) announced
that it has  acquired  the  assets  of Exxon  Chemical  Company's  plastic  film
business for $200 million.

         The  acquisition  includes 350 employees and two plants in Lake Zurich,
Ill., and Pottsville,  Pa., that manufacture  films used primarily in packaging,
personal hygiene and medical  markets.  Over the last 12 months ending March 31,
the Exxon business had revenues of $111 million and generated  EBITDA  (earnings
before interest,  taxes,  depreciation and amortization) of $24.6 million.  Over
the same period,  Tredegar's  film division  reported  sales of $280 million and
EBITDA of $64.2 million.

         Tredegar  is a major  producer  of plastic  films  used in diapers  and
feminine  hygiene  products  as well as a variety of other  packaging,  medical,
industrial and agricultural  markets. The company operates six film plants and a
technical center in the U.S. and has plants in the Netherlands, Hungary, Brazil,
Argentina and China.

         Based in  Richmond,  Va.,  Tredegar  Industries  is a  manufacturer  of
plastics and aluminum extrusions. Tredegar also has interests in drug discovery,
drug delivery and a variety of other emerging technologies.

                                       ###




                                                           FOR IMMEDIATE RELEASE

                   TREDEGAR RELEASES ANNUAL MEETING HIGHLIGHTS

         RICHMOND,  Va., May 20, 1999 -- At its annual meeting of  shareholders,
held today in Richmond,  Va., Tredegar Corporation  (NYSE:TG) expressed optimism
about recent  acquisitions  and its prospects for growth in 2000,  but said 1999
performance  may be  disappointing  due to losses in its newly acquired  Therics
subsidiary and lower than expected profits in its plastic films business.

                   EXXON FILMS ACQUISITION A MAJOR OPPORTUNITY

         Earlier  this  week,  Tredegar  announced  its  acquisition  of Exxon's
plastic  films  business for $200  million.  Douglas R. Monk,  Tredegar's  chief
operating  officer,  said:  "We think it's a great  strategic  fit. Exxon was an
excellent  competitor  that  we're  thrilled  to have  on our  side.  They  have
exceptional  technical strengths and a broad product line that's spread across a
variety of similar and new markets for Tredegar."

         Regarding the near-term  profit impact of the Exxon  acquisition,  Monk
added:  "We don't  expect it to have much of an impact on  earnings  this  year.
Hopefully,  we'll begin to see the  results in the form of earnings  growth next
year, and momentum should build after that."

     THERICS TO GENERATE INITIAL LOSSES, LONG-TERM POTENTIAL IS SUBSTANTIAL

         Therics, the company's recently acquired drug delivery  subsidiary,  is
expected  to  generate  pretax  losses of  approximately  $7 million  (including
goodwill  amortization)  over  the  next 12  months  as it  seeks  revenue-based
development partnerships. Tredegar said successful commercialization of Therics'
technology  could lead to  substantial  revenue  and  earnings  growth.  John D.
Gottwald,  Tredegar's  president  and  chief  executive  officer,  said:  "On  a
risk-reward  basis,  I think Therics is a good bet, and we should know which way
it's headed within a couple of years."

                                   -- more --





TREDEGAR ANNUAL MEETING, page 2

                 ALUMINUM BUSINESS STRONG, SEEKING ACQUISITIONS

         The company  said  profits in aluminum  extrusions,  which have doubled
since 1996, continue to be strong.  Tredegar has doubled its production capacity
in this  business by adding five  plants,  one in mid-1997  and four more during
1998. Monk said: "The truly exciting thing is that most of our profit growth has
been driven by our original three plants. If we make similar improvements in the
acquired  plants,  we should be able to sustain the momentum we've achieved." He
added that Tredegar is considering additional acquisitions in this business.

     FILMS PROFITS LOWER THAN EXPECTED IN 1999, OUTLOOK FOR 2000 IS POSITIVE

         The company said that 1999 profits in its films business continue to be
affected by a variety of factors  including  higher product  development  costs,
delays  in new  product  introductions,  start-up  expenses  at a new  plant  in
Hungary,  and weakness in Far East and Latin  American  markets.  Gottwald said:
"Due to the  sluggishness  we're  experiencing  in films,  which I suspect  will
continue  to  disappoint  all of us for a while,  and the newly  added  expenses
associated  with  Therics,  I expect 1999  results to be less than  exciting and
clearly lower than I had hoped."

         Gottwald  added:  "I'm  optimistic that results in 2000 will improve as
new products  ramp up in films,  the aluminum  business  continues to grow,  and
acquisition  synergies kick in. Looking  further down the road, if you factor in
the potential of our technology  businesses,  the prospect of Tredegar achieving
high growth rates becomes very intriguing. We've certainly planted the seeds for
growth in future years."

         Based in Richmond,  Va.,  Tredegar  Corporation  is a  manufacturer  of
plastics and aluminum extrusions. Tredegar also has interests in drug discovery,
drug delivery and a variety of other emerging technologies.

                                       ###



         This  press  release  contains  forward-looking   statements  based  on
management's beliefs,  assumptions and currently available  information.  Due to
potential  changes in a variety of  business  and  economic  conditions,  actual
results  may  differ  materially  from  those  anticipated  in   forward-looking
statements.