BALCHEM CORP
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>ex10-1.txt
<TEXT>
                                                                    Exhibit 10.1







                            STOCK PURCHASE AGREEMENT



                                  BY AND AMONG



                          BALCHEM MINERALS CORPORATION,





                          CHELATED MINERALS CORPORATION



                                       AND



                THE SHAREHOLDERS OF CHELATED MINERALS CORPORATION



                                OCTOBER 31, 2005





<PAGE>

                            STOCK PURCHASE AGREEMENT

      THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of the 31st day
of October, 2005, by and among the Albert and Verla Richards LTD, Partnership, a
Utah limited  partnership  (the  "Partnership"),  Bruce R.  Sherman,  Suzanne R.
Sherman, Frank Ciaramella,  Frank D'Angelo,  Corporation of the President of The
Church  of Jesus  Christ  of  Latter-day  Saints  (the  "Church"),  and Katie H.
Mitchell  (collectively  the  "Shareholders"  or individually a  "Shareholder"),
Chelated Minerals Corporation,  a Utah corporation (the "Company"),  and Balchem
Minerals   Corporation,   a  Delaware   corporation   (the   "Purchaser").   The
Shareholders,  Company and Purchaser may hereinafter be individually referred to
as a "Party" or collectively as the "Parties."

                                    RECITALS

      WHEREAS, the Shareholders own all of the shares of the outstanding capital
stock of the  Company  (collectively,  the  "Shares")  as set forth in Exhibit A
attached hereto and made a part hereof; and

      WHEREAS, the Shareholders desire to sell and transfer to the Purchaser all
of the Shares,  and the Purchaser wishes to acquire such Shares, all pursuant to
and in accordance with the terms and conditions of this Agreement.

      NOW,  THEREFORE,  in  consideration of the mutual covenants and agreements
herein set forth, the parties hereto hereby agree as follows:

                    ARTICLE 1. PURCHASE AND SALE OF SHARES.

      Section 1.1 Purchase and Sale. Subject to the terms and conditions of this
                  -----------------
Agreement,  the  Purchaser  agrees to purchase  from the  Shareholders,  and the
Shareholders  as of the Closing Date (as defined in Section 7.1 hereof) agree to
sell, transfer and convey to the Purchaser all of the Shares.

               ARTICLE 2. PURCHASE PRICE; INVENTORY; ADJUSTMENT.

      Section  2.1  Purchase  Price.  Subject to the  adjustment  provisions  of
                    ---------------
Section 2.3 hereof,  and upon the terms and subject to the conditions  contained
in this  Agreement,  the  Purchaser  shall  pay to the  Shareholders  the sum of
Seventeen  Million Three  Hundred  Fifty  Thousand  Dollars  ($17,350,000)  (the
"Purchase Price") in full consideration for the Shares.

      Section 2.2 Payment of the Purchase Price.  At the Closing,  the Purchaser
                  -----------------------------
shall pay the Purchase Price to the Shareholders'  Representative (as defined in
Section  2.5  below)  by wire  transfer  of  immediately  available  funds,  for
distribution to the  Shareholders  by the  Shareholders'  Representative  in the
amounts set forth in Schedule 2.2,  subject to adjustment,  if any,  pursuant to
                     ------------
Section 2.3 hereof and subject to the payment into escrow of  $1,600,000 of such
Purchase Price (the "Escrow Fund") pursuant to the escrow agreement  referred to
in Section 2.4 (the "Escrow Agreement").

      Section 2.3 Post-Closing Adjustment.
                  -----------------------

<PAGE>

          A. The Purchase Price will be adjusted dollar for dollar following the
Closing Date to the extent that the Net Working Capital (as hereinafter defined)
of the Company as of the Closing Date (the "Final Working  Capital")  shown upon
the Final Working Capital  Statement (as hereinafter  defined)  differs from the
Net Working  Capital of the Company at February 28, 2005 (the "Contract  Working
Capital") shown on Schedule 2.3 (the "Contract Working Capital Statement").  For
                   ------------
purposes of this  Agreement,  the term "Net Working  Capital" shall mean the net
working capital of the Company as defined and determined in the manner set forth
on the Contract Working Capital Statement. The "Final Working Capital Statement"
will be prepared  by the Parties  from the books of account of the Company as of
the Closing Date within sixty (60) days of the Closing  Date.  The Final Working
Capital Statement shall be prepared  consistent with the practice of the Company
used in the preparation of the Contract Working Capital Statement, in the manner
provided in Section 4 of the Escrow Agreement.

          B. If the Final Working Capital exceeds the Contract  Working Capital,
the  Purchase  Price  shall be  increased  by the amount of such excess and such
amount  shall be paid to the  Shareholders  within ten (10) days  following  the
final  determination of the Purchase Price adjustment amount by wire transfer of
immediately  available  funds  to an  account  designated  by the  Shareholders'
Representative, for distribution to the Shareholders pro-rata in accordance with
their ownership of the Shares.

          C. If the Final  Working  Capital  is less than the  Contract  Working
Capital,  the Purchase Price shall be decreased by the amount of such deficiency
and  such  amount  shall be  refunded  to the  Purchaser  within  ten (10)  days
following the final  determination  of the Purchase Price  adjustment  amount as
follows:  (i) up to $800,000 of such amount (or the full amount thereof if it is
less than or equal to $800,000)  shall be paid to the Purchaser  from the Escrow
Fund in accordance  with the  provisions of the Escrow  Agreement;  and (ii) the
balance (if any) shall paid to the  Purchaser  by the  Shareholders  pro-rata by
wire transfer of  immediately  available  funds to an account  designated by the
Purchaser.  If the  Shareholders  fail to pay any amount owed pursuant to clause
(ii) of the  preceding  sentence  within  five (5) days  following  the due date
therefor,  then  Purchaser  shall be  entitled  (at its option,  exercisable  by
written  notice to the  Shareholders'  Representative  and the Escrow  Agent) to
receive payment thereof from the Escrow Fund, and  Shareholders  shall reimburse
the Escrow Fund for the full amount of such  payment  within ten (10) days after
receipt of written notice by the  Shareholders'  Representative of the making of
such payment from either the Purchaser or the Escrow Agent.

      Section 2.4  Escrow.  At Closing,  the  Shareholders,  the Company and the
                   ------
Purchaser  shall  enter into an escrow  agreement  substantially  in the form of
Exhibit B.

      Section 2.5 Appointment of the Shareholders' Representative.
                  -----------------------------------------------

          A. In order to  efficiently  administer (i) the  determination  of the
Final Working Capital amount,  (ii) the waiver of any rights of the Shareholders
under this Agreement,  and (iii) the defense and/or settlement of any claims for
which the  Shareholders  may be required to indemnify the Purchaser  pursuant to
Article 9 below, each of the Shareholders hereby designate Suzanne R. Sherman as
his, her or its representative  (the  "Shareholders'  Representative") to act on
their behalf with respect to such matters.

                                       2
<PAGE>

          B. The Shareholders hereby authorize the Shareholders'  Representative
(i) to  make  all  decisions  on  behalf  of the  Shareholders  relating  to the
determination of the Final Working Capital and the adjusted Purchase Price, (ii)
to take all action  necessary in connection with the waiver of any rights of the
Shareholders pursuant to this Agreement, or the defense and/or settlement of any
claims for which the  Shareholders  may be required to indemnify  the  Purchaser
pursuant to Article 9 below,  (iii) to give and receive all notices  required to
be given by the Shareholders  under the Agreement,  and (iv) to take any and all
additional  action  as is  contemplated  to be  taken  by or on  behalf  of  the
Shareholders by the terms of this Agreement.

          C. If the Shareholders' Representative dies, becomes unable to perform
her responsibilities  hereunder or resigns from such position,  Bruce R. Sherman
shall act as her successor.  If Bruce R. Sherman is not available or declines to
assume such position, or if he assumes the position and thereafter dies, becomes
unable to perform his responsibilities  hereunder or resigns from such position,
then Shareholders  holding,  immediately  before the Closing,  a majority of the
Shares  as  set  forth  on  Exhibit  A  attached  hereto  shall  select  another
representative to fill such vacancy and such substituted representative shall be
deemed  to  be  the  Shareholders'  Representative  for  all  purposes  of  this
Agreement.

          D. All  decisions  and  actions by the  Shareholders'  Representative,
including,   without   limitation,   any  agreement  between  the  Shareholders'
Representative  and the  Purchaser  relating to the  determination  of the Final
Working Capital, or the adjusted Purchase Price, or the defense or settlement of
any claims for which the Shareholders may be required to indemnify the Purchaser
pursuant to Article 9 below, shall be binding upon all of the Shareholders,  and
no  Shareholder  shall have the right to object,  dissent,  protest or otherwise
contest the same.

          E. By execution of this  Agreement,  each of the  Shareholders  agrees
that:

              i.  the  Purchaser  shall  be  able to  rely  conclusively  on the
instructions  and  decisions  of  the  Shareholders'  Representative  as to  the
determination  of the Final Working  Capital or the adjusted  Purchase Price, or
the settlement of any claims for  indemnification  by the Purchaser  pursuant to
Article 9 below or any other actions  required to be taken by the  Shareholders'
Representative  hereunder, and no party hereunder shall have any cause of action
against the Purchaser for any action taken by the Purchaser in reliance upon the
instructions or decisions of the Shareholders' Representative;

              ii. all actions,  decisions and instructions of the  Shareholders'
Representative  shall be conclusive and binding upon all of the Shareholders and
no  Shareholder  shall  have  any  cause of  action  against  the  Shareholders'
Representative  for any action taken,  decision made or instruction given by the
Shareholders'  Representative under this Agreement,  except for fraud or willful
breach of this Agreement by the Shareholders' Representative;

              iii. the provisions of this Section are independent and severable,
are   irrevocable  and  coupled  with  an  interest  and  shall  be  enforceable
notwithstanding  any  rights  or  remedies  that  any  Shareholder  may  have in
connection with the transactions contemplated by this Agreement;

                                       3
<PAGE>

              iv.  the  remedies  available  at Law (as  defined  below) for any
breach  of the  provisions  of  this  Section  are  inadequate;  therefore,  the
Purchaser and/or the Shareholders' Representative shall be entitled to temporary
and permanent  injunctive relief without the necessity of proving damages if the
Purchaser and/or the Shareholders' Representative bring an action to enforce the
provisions of this Section; and

              v. (v) the  provisions  of this Section  shall be binding upon the
executors, heirs, legal representatives and successors of each Shareholder,  and
any references in this Agreement to a Shareholder or the Shareholders shall mean
and  include the  successors  to the  Shareholders'  rights  hereunder,  whether
pursuant to testamentary  disposition,  the laws of descent and  distribution or
otherwise.

          F. All fees and expenses incurred by the Shareholders'  Representative
in the  performance  of his  or  her  duties  hereunder  shall  be  paid  by the
Shareholders  in proportion to their ownership of Shares as set forth on Exhibit
A attached hereto.

          G.  The  Shareholders'  Representative  will  not  be  liable  to  the
Shareholders for any action taken or omitted in good faith.

                   ARTICLE 3. REPRESENTATIONS AND WARRANTIES.

      Section  3.1  Representations  and  Warranties  of the  Shareholders.  The
                    ------------------------------------------------------
Shareholders represent and warrant to the Purchaser as follows:

          A. Corporate  Organization and Standing.  The Company is a corporation
             ------------------------------------
duly  organized,  validly  existing and in good  standing  under the laws of the
jurisdiction  of its  incorporation  and has the requisite  corporate  power and
authority  necessary to own or lease and operate the  properties and to carry on
its business as presently  conducted in all material  respects.  The Company has
delivered  to the  Purchaser  complete  and  correct  copies of the  Articles of
Incorporation  and Bylaws of the  Company,  as amended to date and  currently in
effect. The Company is duly qualified, licensed or registered to do business and
in good  standing  in each of the  jurisdictions  in  which  the  nature  of the
business  as now being  conducted  by it or the  property  owned or leased by it
makes such qualification,  licensing or registration  necessary except where the
failure to be so qualified would not have a Material  Adverse Effect.  Except as
set forth in Schedule 3.1.A, the Company does not directly or indirectly own any
             --------------
equity or similar interest in, or any interest  convertible into or exchangeable
or  exercisable  for  any  equity  or  similar  interest  in,  any  corporation,
partnership, joint venture or other business association or entity. For purposes
of this  Agreement,  "Material  Adverse  Effect"  means  any  change,  effect or
circumstance  that,  individually or when taken together with all other changes,
effects or  circumstances  that have occurred prior to the date of determination
of the occurrence of the Material Adverse Effect,  is or is reasonably likely to
be materially  adverse to the business,  assets (including  intangible  assets),
prospects,  financial  condition or results of operation of the Company,  as the
case may be, in each case taken as a whole.

          B. Capitalization of the Company.  The authorized capital stock of the
             -----------------------------
Company  consists of (i) 300,000  shares of common  stock,  $1.00 par value,  of
which 243,496  shares have been duly  authorized,  validly  issued and are fully
paid and  nonassessable and owned

                                       4
<PAGE>

by the  Shareholders  as set forth in  Exhibit  A, free and clear of all  liens,
encumbrances,  restrictions  and claims of any kind.  There are no preemptive or
similar  rights  on the part of any  holder of any  class of  securities  of the
Company,  or obligating the Company to issue or sell any shares of capital stock
of, or other equity  interests in, the Company.  Except as set forth in Schedule
                                                                        --------
3.1.B,  no  options,  warrants,   conversion  or  other  rights,  agreements  or
-----
commitments of any kind obligating the Company,  contingently  or otherwise,  to
issue or sell any  shares of its  capital  stock of any class or any  securities
convertible  into or exchangeable for any such shares,  are outstanding,  and no
authorization or commitment  therefor has been given.  Upon  consummation of the
transactions contemplated by this Agreement, Purchaser will be the sole owner of
all of the issued and  outstanding  capital stock of the Company,  with good and
marketable title to all of the Shares free and clear of all liens, encumbrances,
restrictions and claims of any kind.

          C.  Authorization.  The Company has all necessary  corporate power and
              -------------
authority to enter into this Agreement and to perform its obligations  hereunder
and to consummate the transactions  contemplated hereby. This Agreement has been
duly executed and delivered by the Company and the Shareholders and is the valid
and binding obligation of the Company and the Shareholders  enforceable  against
each of them in accordance with its terms,  except as enforcement may be limited
by equitable  principles  limiting the right to obtain  specific  performance or
other  equitable  remedies,  or by applicable  bankruptcy or insolvency laws and
related decisions affecting creditors' rights generally.

          D. No  Conflict.  Except as set forth in  Schedule  3.1.D,  and to the
             ------------                           ---------------
knowledge  of the  Company  and the  Shareholders,  neither  the  execution  and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (i) result in the  acceleration  of, or the creation in any party of
any right to  accelerate,  terminate,  modify or cancel any material  indenture,
contract, lease, sublease, loan agreement, note or other obligation or liability
to which the  Company  is a party or by which it is bound or to which any of its
assets is subject,  (ii)  conflict with or result in a breach of or constitute a
default under any provision of the Articles of Incorporation or Bylaws (or other
charter  documents)  of the  Company,  or a default  under or  violation  of any
material restriction,  lien, encumbrance,  indenture, contract, lease, sublease,
loan agreement,  note or other obligation or liability to which it is a party or
by which it is bound or to which any of its  assets is  subject or result in the
creation of any lien or encumbrance upon any of said assets, or (iii) violate or
result in a breach of or constitute a default  under any Law (as defined  below)
or any judgment,  order, decree, rule or regulation of any court or governmental
agency to which the Company is subject,  and which, in each of clauses (i), (ii)
and  (iii)  above,  would  have a  Material  Adverse  Effect.  As  used  in this
Agreement, the term "Law" or "Laws" means any and all laws, rules,  regulations,
statutes,  codes,  judgments,  orders,  injunctions,  decrees,  writs,  rulings,
directives, interpretations,  constitutions,  ordinances, common law, or treaty,
of any federal, state, local, municipal, foreign, international or multinational
government,  administrative agency or commission,  court, arbitrational tribunal
or other governmental or regulatory authority or agency of any country.

          E. Financial Statements.
             --------------------

              i. The Shareholders have provided the Purchaser with the following
financial statements of the Company (collectively,  the "Financial Statements"):
(i) unaudited

                                       5
<PAGE>

balance sheets and related statements of income and shareholders'  equity of the
Company as of and for the fiscal years ended  February 28, 2003,  2004 and 2005;
and (ii) an unaudited  balance sheet (the "Current  Balance  Sheet") and related
statements of income and shareholders' equity, of the Company (the "Year-to-Date
Financial  Statements")  as of and for the six (6) months  ended August 31, 2005
(the "Balance Sheet Date"). Except as set forth in Schedule 3.1.E, the Financial
                                                   --------------
Statements  have been  prepared on a  consistent  basis  throughout  the periods
covered  thereby,   present  fairly  the  financial  condition  and  results  of
operations of the Company as of such dates and for such periods, are correct and
complete in all material respects, and are consistent with the books and records
of the Company (which books and records are correct and complete in all material
respects).

              ii. The Company has no material liabilities of any nature, whether
absolute,  accrued,  asserted or  unasserted  or contingent or whether due or to
become due,  except as and to the extent (a) shown on the Current Balance Sheet,
(b) set forth in  Schedule  3.1.E,  or (c)  incurred in the  ordinary  course of
                  ---------------
business  after the Balance Sheet Date and properly  recorded or reserved for on
the Final Working Capital Statement.

              iii.  Except as set forth in  Schedule  3.1.E,  as of the  Closing
                                            ---------------
Date, all Company  Indebtedness (as hereinafter  defined) has been paid in full,
and the Company has no  Indebtedness  of any nature.  As used  herein,  the term
"Indebtedness" means and includes (a) all indebtedness for borrowed money or for
the  deferred  purchase  price  of  property  or  services,  including,  without
limitation,  all indebtedness evidenced by notes, bonds,  debentures and similar
instruments,  as well as all  interest,  fees and charges  payable  with respect
thereto, (b) all obligations and liabilities under or with respect to letters of
credit,   banker's  or  other  acceptances  or  similar  obligations,   (c)  all
obligations  and   liabilities   under  or  in  respect  of  capital  leases  or
sale-leaseback  arrangements,  (d) all obligations and liabilities arising under
guarantees or similar  undertakings,  (e) all indebtedness and other obligations
of the  Company to any  Shareholder,  and (f) all  obligations  and  liabilities
created or arising under any conditional sales contract or other title retention
agreement,  but shall not include (i) trade payables,  and (ii) customer advance
payments and customer deposits received in the ordinary course of business.

          F. Insurance.
             ---------

              i.  Schedule  3.1.F sets forth (a) a complete and correct list and
                  ---------------
description  of all  policies  of  insurance  to which the Company is a party or
under  which the  Company  or any of its assets or  operations  are or have been
covered  during  the past  three (3) years,  true and  complete  copies of which
policies have been  delivered to the  Purchaser;  and (b) a  description  of all
obligations of the Company to third parties with respect to insurance (including
such obligations under leases and service  agreements) and identifies the policy
under which such coverage is provided.

              ii.  Schedule  3.1.F sets forth,  by year,  for the current policy
                   ---------------
year and each of the three (3) preceding policy years: (a) a summary of the loss
experience  under each policy;  (b) a statement  describing  each claim under an
insurance  policy for an amount in excess of $5,000,  which sets forth:  (I) the
name of the  claimant;  (II) a  description  of the policy by  insurer,  type of
insurance,  and period of coverage; and (III) the amount and a brief description
of

                                       6
<PAGE>

the claim;  and (c) a statement  describing  the loss  experience for all claims
that were self-insured, including the number and aggregate cost of such claims.

              iii. Except as set forth on Schedule 3.1.F,  all policies to which
                                          --------------
the Company is a party or that provide  coverage to the Company:  (a) are valid,
outstanding,  and enforceable;  (b) are issued by a reputable  insurer;  (c) are
sufficient for compliance with all legal requirements  applicable to the Company
and contracts  and  agreements to which the Company is a party or by which it is
bound;  (d) will continue in full force and effect following the consummation of
the transactions  contemplated by this Agreement; and (e) do not provide for any
retrospective  premium  adjustment or other  experienced-based  liability on the
part of the Company.

              iv. The  Company  has paid all  premiums  due,  and has  otherwise
performed  all of its  respective  obligations,  under each  policy to which the
Company is a party or that provides coverage to the Company.

              v. The Company has given notice to the  applicable  insurer  under
each  policy to which the  Company is a party or that  provides  coverage to the
Company of all claims that may be insured thereby.

          G.  Litigation.  There  is no  claim,  action,  suit,  proceeding,  or
              ----------
investigation  pending or, to the knowledge of the Company or the  Shareholders,
threatened against or affecting the Company, or its directors,  officers, agents
or employees, or any properties,  assets or rights of the Company, and there are
no orders, writs,  injunctions or decrees currently in force against the Company
or its directors,  officers,  agents or employees of the Company with respect to
the  conduct of the Company or its  business.  Except as  described  in Schedule
                                                                        --------
3.1.G, there is no claim,  action,  suit or proceeding by the Company pending or
-----
threatened against others.

          H. Licenses and Permits;  Compliance with Laws. Except as set forth in
             -------------------------------------------
Schedule  3.1.H,  the Company  owns,  holds or  possesses  in its own name,  all
---------------
governmental  licenses,  franchises,  permits,  approvals and other governmental
authorizations (federal, state and local) (collectively, "Licenses and Permits")
necessary to entitle it to use its corporate name, to own or lease,  operate and
use its  respective  assets  and  properties  and to  carry on and  conduct  its
respective  businesses  and operations as presently  conducted,  except for such
Licenses  and Permits  the  absence of which  would not have a Material  Adverse
Effect.  The Company is not in  violation  of or default  under any  Licenses or
Permits  or any  judgment,  order,  writ,  injunction  or decree of any court or
administrative  agency  issued  against it, or any Law,  applicable to it, which
could reasonably be expected individually or in the aggregate to have a Material
Adverse  Effect or which could  reasonably  be expected to interfere  materially
with the consummation of the transactions  contemplated  herein.  Schedule 3.1.H
                                                                  --------------
sets forth a complete and correct list of all Licenses and Permits  owned,  held
or possessed by the Company, all of which are in full force and effect as of the
date  hereof  and  will  continue  in  full  force  and  effect   following  the
consummation of the transactions contemplated by this Agreement.

          I. Tax Matters.
             -----------

                                       7
<PAGE>

              i. For  purposes  of this  Agreement,  (i) "Tax"  means any of the
Taxes, and "Taxes" means (A) all net income,  capital gains, gross income, gross
receipts,  sales, use, ad valorem,  franchise,  capital,  profits,  license, and
other withholding,  employment, social security, payroll, transfer,  conveyance,
documentary,  stamp,  property,  value added,  customs  duties,  minimum  taxes,
estimated  and any  other  taxes,  fees,  charges,  levies,  excises,  duties or
assessments of any kind whatsoever, together with additions to tax or additional
amounts,  interest  and  penalties  relating  thereto that may be imposed by the
federal  government  or any state,  local,  or foreign  government,  and (B) any
liability of the Company for the payment of any amount of any type  described in
clause  (A) as a result  of the  Company  being a  transferee  or a member of an
affiliated or combined group prior to the Closing,  (ii) "Tax Returns" means all
returns, reports,  statements,  and forms required to be filed in respect of any
Tax,  and (iii) "Code"  means the  Internal  Revenue  Code of 1986,  as amended,
including the rules and  regulations  thereunder and any substitute or successor
provisions.

              ii. Except as set forth on Schedule 3.1.I:
                                         --------------

                  a. The Company has:  (A) timely  filed all  federal,  foreign,
state,  and local Tax  Returns  required  to be filed by or with  respect to the
Company  on or prior to the  Closing  Date and all such Tax  Returns  are  true,
complete  and  correct;  and (B) timely paid in full all Taxes due, or for which
assessments  have  been  received,  for all  periods  ending  on or prior to the
Closing Date.

                  b.  The  Company  is not a  party  to any  pending  action  or
proceeding,  nor, to the knowledge of the  Shareholders  or the Company,  is any
action or proceeding threatened by any governmental authority for the assessment
or collection of any Taxes, and no claim for the assessment or collection of any
Taxes has been  asserted or proposed to be asserted  against the Company,  which
has not been settled with all amounts due having been paid. There are no matters
under discussion with any taxing authority, which might result in the assessment
of additional Taxes against, or relating to, the Company.

                  c. There are no  agreements,  waivers,  or other  arrangements
providing for an extension of time with respect to the filing of any Tax Returns
or for the  assessment  of any Tax or  deficiency  against  or  relating  to the
Company.  There are no  outstanding  powers of  attorney  enabling  any party to
represent the Company with respect to Tax matters.

                  d. All other Taxes required to have been withheld or collected
by the Company  have been duly  withheld and  collected  and have been duly paid
over to the proper governmental authority, or settled or adequately reserved for
on the Final Working Capital  Statement,  all as and to the extent prescribed by
Law.

                  e. All Taxes due from the  Company  with  respect  to  Company
employee income tax withholding,  social security taxes,  unemployment,  and any
similar  Taxes for all periods  ending on or prior to the Closing Date have been
either paid in full on or prior to the Closing Date or accrued as a liability on
the Final Working Capital Statement.

                                       8
<PAGE>

                  f. The  reserves  for Taxes on the  Contract  Working  Capital
Statement,  the Current  Balance Sheet and the Final Working  Capital  Statement
(excluding  any reserves for deferred  Taxes) are  sufficient for the payment of
all unpaid  Taxes  through the dates shown and for all  periods  prior  thereto,
including,  without limitation,  all Taxes, if any, imposed after such dates but
in respect of any period or periods  prior to the dates of such Working  Capital
Statement.

                  g. The Company is not a party to any  agreement,  arrangement,
or practice  for the sharing of Taxes or is  obligated  to  indemnify  any other
party for Taxes.

                  h.  There are no liens for Taxes on any asset of the  Company,
other than for Taxes not yet due and payable.

          J. Brokers,  Finders.  Except as set forth in Schedule 3.1.J,  neither
             -----------------                          --------------
the Company nor any  Shareholder has retained any broker or finder in connection
with the transactions  contemplated  herein or is obligated or has agreed to pay
any brokerage or finder's commission, fee or similar compensation.

          K. Absence of Certain Changes.
             --------------------------

              i. Since the Balance  Sheet Date,  except as set forth in Schedule
                                                                        --------
3.1.K(i),  the Company has  conducted  its business in the  ordinary  course and
-------
there has not occurred with respect to the Company;

                  a. any Material Adverse Effect,  or any event,  development or
circumstance  that could be reasonably  foreseen to result in a Material Adverse
Effect;

                  b. any payment,  discharge or  satisfaction of any liabilities
or obligations (whether accrued, absolute, contingent or otherwise) in excess of
$20,000  other than the  payment,  discharge  or  satisfaction,  in the ordinary
course of  business,  of  liabilities  or  obligations  incurred in the ordinary
course of business;

                  c.  except in the  ordinary  course of  business,  any  assets
(whether real,  personal or mixed,  tangible or intangible)  becoming subject to
any mortgage,  pledge,  lien,  security  interest,  encumbrance,  restriction or
charge of any kind;

                  d. any  cancellation  or  waiver  of any  claims  or rights of
value,  or  any  sale,  lease,  transfer,  assignment,   distribution  or  other
disposition of any material assets, except in the ordinary course of business;

                  e. any increase in the base  compensation  or other payment to
any director,  officer or employee,  whether now or hereafter payable or granted
(other than increases in base  compensation in the ordinary course consistent in
timing and amount with past practices),  or entry into or variation of the terms
of any employment or incentive agreement with any such person;

                                       9
<PAGE>

                  f. any capital  expenditure  or  commitment  for  additions to
property, plant or equipment, or lease agreement, which exceeds $10,000;

                  g. any damage,  destruction  or loss of any asset,  whether or
not covered by insurance,  which exceeds $10,000 or which could otherwise have a
Material Adverse Effect;

                  h.  except  liabilities  incurred  in the  ordinary  course of
business,  any  obligation  or liability,  including,  without  limitation,  any
liability for nonperformance or termination of any contract;

                  i.  any  elimination  of  any  reserves   established  on  the
Company's books or any changing of the method of accrual;

                  j. any change in any accounting method,  principle or practice
of the  Company,  any  revaluation  by the  Company  of  any  of its  assets  or
properties or any change in collection  policies or payment terms  applicable to
any customers or suppliers of the Company; or

                  k. any  agreement,  undertaking or commitment to do any of the
foregoing.

              ii.  Since  February  28.  2005,  except as set forth in  Schedule
                                                                        --------
3.1.K(ii) hereto, the Company has not:
--------

                  a.  authorized  for  issuance,  issued,  delivered or sold any
equity  securities  of the  Company,  or  altered  the terms of any  outstanding
securities  issued by it or in any way increased its  indebtedness  for borrowed
money; or

                  b.  declared,  paid or set aside for payment  any  dividend or
other distribution  (whether in cash, stock or property or otherwise) in respect
of any Shares, including,  without limitation,  any Subchapter S distribution or
dividend  distribution or any similar  distribution,  or redeemed,  purchased or
otherwise acquired any Shares,  any securities  convertible into or exchangeable
for any  Shares,  or any  options,  warrants  or other  rights  to  purchase  or
subscribe to any of the  foregoing  (and no dividends are or will be owed to any
holder of Shares).

          L. Real  Properties.  Schedule  3.1.L lists and describes  briefly all
             ----------------   ---------------
real property  owned or leased by the Company.  With respect to each such parcel
of owned real property, except as set forth on Schedule 3.1.L or 3.1.T:
                                               -----------------------

              i. the Company has good and marketable title to the parcel of real
property, free and clear of any lien, easement,  covenant, or other restriction,
except for  installments of special  assessments not yet delinquent and recorded
easements,  covenants,  and other  restrictions  which do not impair the current
use, occupancy, or value, or the marketability of title, of the property subject
thereto;

                                       10
<PAGE>

              ii.  there are no pending or, to the  knowledge  of the Company or
the   Shareholders,    threatened   condemnation   proceedings,   lawsuits,   or
administrative  actions  relating  to the  property or other  matters  affecting
adversely the current use, occupancy, or value thereof;

              iii. the legal  description  for the parcel  contained in the deed
thereof   describes  such  parcel  fully  and  adequately,   the  buildings  and
improvements  are located within the boundary lines of the described  parcels of
land, are not in violation of applicable setback  requirements,  zoning Laws, or
other Laws (and none of the properties or buildings or improvements  thereon are
subject to "permitted  nonconforming use" or "permitted nonconforming structure"
classifications), and do not encroach on any easement which may burden the land,
the land does not serve any adjoining property for any purpose inconsistent with
the use of the land,  and the property is not located  within any flood plain or
subject to any  similar  type  restriction  for which any  permits  or  licenses
necessary to the use thereof have not been obtained;

              iv. all  facilities  located on the parcel of real  property  have
received  all  approvals of  governmental  authorities  (including  licenses and
permits)  required in connection  with the ownership or operation  thereof,  and
comply with and have been operated and maintained in accordance  with applicable
Laws (except as disclosed in Schedule 3.1.T);

              v. there are no leases, subleases, licenses, concessions, or other
agreements,  written or oral,  granting to any party or parties the right of use
or occupancy of any portion of the parcel of real property;

              vi. there are no outstanding options or rights of first refusal to
purchase  the  parcel of real  property,  or any  portion  thereof  or  interest
therein;

              vii.  there are no parties  (other than the Company) in possession
of the parcel of real property;

              viii.  all  facilities  located on the parcel of real property are
supplied with utilities and other  services  necessary for the operation of such
facilities,  including gas, electricity,  water, telephone,  sanitary sewer, and
storm sewer, all of which services,  to the knowledge of the  Shareholders,  are
adequate in  accordance  with all  applicable  Laws and are  provided via public
roads or via permanent, irrevocable, appurtenant easements benefiting the parcel
of real property; and

              ix. the parcel of real property 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 the parcel of real property,  and
access to the property is provided by paved public  right-of-way  with  adequate
curb cuts available.

          M.  Material  Contracts.  Schedule  3.1.M sets  forth a  complete  and
              -------------------   ---------------
correct list of all of the Material Contracts (as hereinafter  defined) to which
the Company is a party or to which the  Shareholders are a party and that relate
to the business of the Company. The Company has furnished or will furnish to the
Purchaser  prior to the Closing true and correct copies of all written  Material
Contracts  (each as  amended  to date),  and a written  summary of the terms and
conditions of all oral/verbal Material Contracts.  Except as otherwise set forth
in

                                       11
<PAGE>

Schedule 3.1.M: (a) each Material Contract  (including,  without  limitation,
--------------
each real property lease and personal property lease) is legal, valid,  binding,
enforceable,  and in full force and  effect;  (b) each  Material  Contract  will
continue to be legal, valid, binding,  enforceable, and in full force and effect
on identical terms following the consummation of the  transactions  contemplated
hereby;  (c) no party is in breach or default,  and no event has occurred  which
with notice or lapse of time would  constitute  a breach or  default,  or permit
termination, modification, or acceleration, under any Material Contract; and (d)
no party has repudiated any provision of any Material Contract.  As used in this
Agreement, "Material Contracts" means

              i. all  leases or other  agreements  under  which the  Company  is
lessee of, or holds or  operates,  any  machinery,  equipment,  vehicle or other
tangible  personal  property  owned by a third party and used in the business of
the Company and which entails annual payments,  in the case of any such lease or
agreement, in excess of $10,000;

              ii. outstanding  contracts with its officers,  employees,  agents,
consultants,  advisors,  salesmen,  sales representatives,  distributors,  sales
agents or dealers of the Company other than  contracts  which by their terms are
cancelable  by the  Company,  or the  Shareholders  with notice of not more than
thirty (30) days and without  cancellation  penalties or severance payments,  in
the case of any such contract, in excess of $20,000;

              iii. all  mortgages,  indentures,  security  agreements,  pledges,
notes, loan agreements or guarantees relating to the Company; and

              iv. all  outstanding  contracts  with  customers or vendors (other
than  purchase  orders)  expected  to result in payment to or by the  Company in
excess of $10,000;

              v. all  distributor,  sales  representative,  agency  and  similar
agreements;

              vi. all contracts,  agreements and other documents and information
relating to the disposal of waste (whether or not hazardous);

              vii.  any  agreement  concerning  confidentiality,  assignment  of
inventions,  nonsolicitation or noncompetition,  including,  without limitation,
any agreement  which limits or restricts the Company's right to compete with any
person in any respect;

              viii. any bonus,  pension,  profit  sharing,  stock option,  stock
purchase,  stock  appreciation,  deferred  compensation,  severance,  insurance,
hospitalization  or other plan,  understanding or arrangement  pursuant to which
benefits are provided to any current or past employee of the Company;

              ix. any  agreement  under which the  consequences  of a default or
termination could reasonably be expected to result in a Material Adverse Effect;
or

              x. any  other  agreement  (or  group of  related  agreements)  the
performance  of which involves  consideration  in excess of $10,000 or which are
otherwise material to the Company.

          N. Intellectual Property Rights.
             ----------------------------

                                       12
<PAGE>

              i. Except as set forth in Schedule 3.1.N,  the Company solely owns
                                        --------------
or has the  right to use,  free and  clear of any lien or other  encumbrance  or
restriction,  all Intellectual  Property (as defined below) owned or used by the
Company in the conduct of its business. Schedule 3.1.N sets forth a complete and
                                        --------------
correct list of all such Intellectual Property.  Except as set forth in Schedule
                                                                        --------
3.1.N hereto,  there is no claim or demand of any person  pertaining  to, or any
-----
proceeding  pending or, to the  knowledge  of the  Shareholders  or the Company,
threatened,  which  challenges  the rights of the  Company in respect of (i) any
Intellectual  Property  or (ii) the  rights of the  Company  in  respect  of any
material  trade  secret  owned  or used by the  Company  in the  conduct  of the
Company's businesses. None of the Intellectual Property Rights is subject to any
outstanding order, ruling, decree, judgment or stipulation by or with any court,
arbitrator  or  administrative  agency.  To the knowledge of the Company and the
Shareholders,  neither the Company nor any aspect of its business or  operations
nor any products manufactured,  distributed and sold by the Company infringe any
Intellectual  Property held,  owned or used by any third party. To the knowledge
of the  Company  and the  Shareholders,  no third  party  has  interfered  with,
infringed  upon,  misappropriated  or  otherwise  come  into  conflict  with any
Intellectual Property of the Company.

              ii. Except as shown on Schedule  3.1.N,  with respect to each item
                                     ---------------
of  Intellectual  Property  required to be identified in Schedule 3.1.N which is
                                                         --------------
owned by the Company:

                  a. the Company possesses all right, title, and interest in and
to the  item,  free  and  clear  of any  lien,  encumbrance,  license,  or other
restriction;

                  b.  no  action,  suit,  proceeding,   hearing,  investigation,
charge,  complaint,  claim,  or demand is pending  or, to the  knowledge  of the
Company and the  Shareholders,  is  threatened  which  challenges  the legality,
validity, enforceability, use, or ownership of the item; and

                  c. neither the Company nor any of its predecessors in interest
or  affiliates  has ever agreed to indemnify  any third party for or against any
interference, infringement,  misappropriation, or other conflict with respect to
the item.

              iii. As used herein,  the term  "Intellectual  Property" means (a)
all inventions (whether patentable or unpatentable and whether or not reduced to
practice),  all improvements thereto, and all patents, patent applications,  and
patent    disclosures,    together   with   all   reissuances,    continuations,
continuations-in-part,  revisions,  extensions,  and reexaminations thereof, (b)
all trademarks,  service marks,  trade dress,  logos, trade names, and corporate
names,   together  with  all   translations,   adaptations,   derivations,   and
combinations  thereof and including all goodwill associated  therewith,  and all
applications,  registrations,  and  renewals in  connection  therewith,  (c) all
copyrightable works, all copyrights,  and all applications,  registrations,  and
renewals  in  connection  therewith,  (d) all mask  works and all  applications,
registrations,  and renewals in connection therewith,  (e) all trade secrets and
confidential  business information  (including ideas,  research and development,
know-how,  formulas,  compositions,  manufacturing and production  processes and
techniques,  technical data,  designs,  drawings,  specifications,  customer and
supplier lists,  pricing and cost information,  and business and marketing plans
and  proposals),   (f)  all  computer  software   (including  data  and  related
documentation)  other than third

                                       13
<PAGE>

party  software  used  pursuant  to a valid  license  agreement,  (g) all  other
proprietary  rights,  and (h) all copies and  tangible  embodiments  thereof (in
whatever form or medium).

          O. Labor Matters.
             -------------

              i.  Except as set  forth in  Schedule  3.1.O(i),  there are no (i)
                                           -----------------
labor strikes, disputes,  slowdowns,  representation campaigns or work stoppages
with  respect to employees  of the Company  pending or, to the  knowledge of the
Company or the Shareholders,  threatened against or affecting the Company,  (ii)
grievance  or  arbitration  proceedings  arising  out of  collective  bargaining
agreements  to which the Company is a party  (other than  informal  grievances),
(iii)  unfair  labor  practice  complaints  pending or, to the  knowledge of the
Company or the Shareholders,  threatened against the Company, or (iv) collective
bargaining  agreements  or other labor  union  contracts  applicable  to persons
employed by the Company and to the knowledge of the Company or the Shareholders,
there are no activities or  proceedings  of any labor union to organize any such
employees.

              ii. Except to the extent set forth in Schedule  3.1.O(ii),  to the
                                                    ------------------
knowledge  of the  Company  and the  Shareholders,  the  Company is in  material
compliance  with  all  applicable  Laws  respecting  employment  and  employment
practices,  terms and conditions of employment  and wages and hours,  and is not
engaged in any unfair labor practice.

          P. No  Consent.  Except as set forth in  Schedule  3.1.P,  no consent,
             -----------                           ---------------
approval,  authorization order, filing, registration or qualification of or with
any court,  governmental  authority  or third  person is  required to be made or
obtained by the Company,  or the  Shareholders  in connection with the execution
and  delivery of this  Agreement  by the  Company,  or the  Shareholders  or the
consummation  by  the  Company,   or  the   Shareholders  of  the   transactions
contemplated hereby.

          Q. Employee Benefit Plans; Employment Agreements.  Schedule 3.1.Q sets
             ---------------------------------------------   --------------
forth a complete and correct list of all employee  contracts,  arrangements  and
"employee  welfare benefit" or "employee  pension benefit" plans relating to the
Company, as such plans are defined in Sections 3(1) and 3(2),  respectively,  of
the  Employee  Retirement  Income  Security  Act of 1974,  as amended  ("ERISA")
(collectively, the "Plans"). The Company has furnished to the Purchaser true and
correct copies of instruments evidencing all such contracts and arrangements and
the Plans,  all as amended to date. The Plans comply with all  applicable  Laws,
and have been administered in material  compliance with their terms and with all
filings,  reporting,  disclosure,  and other requirements of ERISA, the Internal
Revenue Code and all other applicable Laws.

          R. Product Liability.  Except as set forth in Schedule 3.1.R, there is
             -----------------                          --------------
no claim, action,  suit, inquiry,  proceeding or investigation in any case by or
before  any court or  governmental  body  pending  or, to the  knowledge  of the
Shareholders  or the  Company,  threatened,  against or  involving  the  Company
relating to any product  alleged to have been designed,  manufactured or sold by
the  Company  and  alleged to have been  defective  or  improperly  designed  or
manufactured.

          S. Personal Property. Schedule 3.1.S sets forth a complete and correct
             -----------------  --------------
list of all personal  property  owned by the Company and sets forth any material
lease pursuant to which

                                       14
<PAGE>

the Company leases personal property as lessee or lessor (the "Personal Property
Leases").  Except as set forth in Schedule 3.1.S hereto, the Company has or will
                                  --------------
have at the  Closing (a) good and valid  title to all of the  personal  property
listed in Schedule  3.1.S as owned by it,  including,  without  limitation,  the
          ---------------
personal  property  acquired  after  the  date of  this  Agreement  (except  for
inventories  and other assets sold or otherwise  disposed of in accordance  with
the  provisions of this  Agreement),  and (b) valid  leasehold  interests in all
personal  property  listed in Schedule  3.1.S as leased by it, in each case free
                              ---------------
and clear of all mortgages, liens, charges,  encumbrances,  easements,  security
interests or title  imperfections other than (i) those listed in Schedule 3.1.S,
                                                                 --------------
(ii) mechanics, materialmen,  suppliers, vendors or similar liens arising in the
ordinary  course  securing  amounts  which are not  delinquent,  (iii) liens for
current taxes,  assessments or governmental  charges not yet due and delinquent,
or  (iv)  those  which  do  not,  individually  or in the  aggregate  materially
interfere with the use of the personal  property or materially  detract from its
value. The personal property set forth in Schedule 3.1.S hereto  constitutes all
                                          --------------
personal  property  necessary  for the  operation of the  Company's  business as
presently conducted.  Except as set forth on Schedule 3.1.S hereto, the personal
                                             --------------
property is maintained in good  operating  condition,  reasonable  wear and tear
excepted, and is suitable for the purposes for which it is currently being used.

          T. Environmental, Health, and Safety Matters.
             -----------------------------------------

              i. For purposes of this Agreement,  the capitalized  terms defined
below shall have the meanings ascribed to them below.

                  a.  "Environmental  Law(s)" means all federal,  state or local
law (including common law), statute, ordinance, rule, regulation, code, or other
requirement  relating  to the  environment,  natural  resources,  or  public  or
employee health and safety and includes, but is not limited to the Comprehensive
Environmental Response Compensation and Liability Act ("CERCLA"),  42 U.S.C. ss.
9601 et seq., the Hazardous Materials  Transportation Act, 49 U.S.C. ss. 1801 et
     -- ---                                                                   --
seq., the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. ss. 6901 et
---                                                                           --
seq.,  the Clean  Water Act, 33 U.S.C.  Section ss. 1251 et seq.,  the Clean Air
---                                                      -- ---
Act, 42 U.S.C. ss. 7401 et seq., the Toxic Substance  Control Act, 15 U.S.C. ss.
                        -- ---
2601 et seq., the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq., and the
     -- ---                                                     -- ---
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq., as such laws have
                                                      -- ---
been amended or supplemented,  and the regulations promulgated pursuant thereto,
and all analogous state or local statutes and any applicable  transfer statutes.

                  b.    "Environmental    Permits"    means    all    approvals,
authorizations,  consents,  permits,  licenses,  registrations  and certificates
required by any applicable Environmental Law.

                  c. "Hazardous  Substance(s)"  means,  without limitation,  any
flammable explosives,  radioactive materials, urea formaldehyde foam insulation,
polychlorinated  biphenyls,  petroleum and petroleum products (including but not
limited  to  waste  petroleum  and  petroleum  products),   methane,   hazardous
materials,  hazardous  wastes,  pollutants,  contaminants and hazardous or toxic
substances, as defined in or regulated under any applicable Environmental Law.

                                       15
<PAGE>

                  d.  "Release"  means any past or  present  spilling,  leaking,
pumping,  pouring,  emitting,  emptying,   discharging,   injecting,   escaping,
leaching, dumping or disposing of a Hazardous Substance into the environment.

              ii. Except as disclosed in Schedule 3.1.T attached hereto and made
                                         --------------
a part hereof, to the Company's and the Shareholders' knowledge, the Company (i)
has  obtained  all  Environmental  Permits  that  are  required  for the  lawful
operation of its  business;  (ii) is in material  compliance  with all terms and
conditions of its  Environmental  Permits and with any applicable  Environmental
Law, and (iii) has not received  written notice of any material  violation by or
material  claim  against the Company under any  Environmental  Law including any
investigatory, remedial or corrective obligations arising thereunder.

              iii.  Except as disclosed in Schedule  3.1.T, to the Company's and
                                           ---------------
the  Shareholders'  knowledge,  there  have  been  no  Releases,  or  threatened
Releases,  of any Hazardous  Substances  into, on or under any of the properties
owned  or  operated,  in any  case  in  such a way as to  create  any  liability
(including  the costs of  investigation  and  remediation)  under any applicable
Environmental Law

              iv. Except as disclosed in Schedule 3.1.T hereof, to the Company's
                                         --------------
and the  Shareholders'  knowledge,  the  Company  has not been  identified  as a
potentially  responsible  party at any federal or state  National  Priority List
("Superfund") site.

              v. Except as disclosed in Schedule 3.1.T hereof,  to the Company's
                                        --------------
and the  Shareholders'  knowledge,  none of the following exists at any property
owned or operated by the Company:  (1) underground  storage tanks;  (2) asbestos
containing  materials  in any form or  condition;  (3)  materials  or  equipment
containing polychlorinated biphenyls; or (4) landfills, surface impoundments, or
disposal areas.

              vi. Except as disclosed in Schedules  3.1.T and 3.1.BB hereof,  to
                                         ---------------------------
the  Company's  and the  Shareholders'  knowledge,  the Company has not treated,
stored,  disposed  of,  arranged  for or  knowingly  permitted  the disposal of,
transport of, or handling of any  substance,  including  without  limitation any
Hazardous Substance, or owned or operated the Company in a manner that has given
or would give rise to material liabilities, including any material liability for
response costs,  corrective  action costs,  personal  injury,  property  damage,
natural  resources  damages or attorney fees,  pursuant to any Environmental Law
currently in effect.

              vii.  There have been no  environmental  investigations,  studies,
audits,  tests,  reviews,  or other  analyses  conducted  by or which are in the
possession of the Company which have not been  delivered to the Purchaser  prior
to the date hereof.

              viii. All documents  filed by or on behalf of the Company with any
governmental  authority pursuant to any Environmental Law were true, correct and
complete in all material respects and did not omit to state any fact required to
be stated  therein or necessary to make the  statements  therein not  materially
misleading.

          U.  Customers and  Suppliers.  Schedule  3.1.U contains a list setting
              ------------------------   ---------------
forth the 10 largest  customers of the Company,  by dollar  amount,  over the 12
months ended March 31,  2005,  and the 10 largest  suppliers of the Company,  by
dollar  amount,  over the 12 months ended

                                       16
<PAGE>

March 31, 2005. All purchase and sale orders and other commitments for purchases
and sales made by the Company have been made in the ordinary  course of business
in  accordance  with  past  practices,  and no  payments  have  been made to any
supplier or  customers  or any of their  respective  representatives  other than
payments  to such  suppliers  or the payment of the  invoiced  price of supplies
purchased or goods sold in the ordinary course of business. Trade inventories of
the products of the Company are not excessive in kind or amount.  Subject to the
warranty  reserve set forth on the Current  Balance sheet,  all products sold by
the Company conform to applicable Laws and all applicable warranty thereof.  The
Company does not have any  obligation to accept returns of products in excess of
the reserve for returns set forth in the Final Working Capital Statement,  which
will not exceed the reserve  therefor  set forth on the Current  Balance  Sheet.
Except as set forth in Schedule  3.1.U,  since  February 28,  2005,  no customer
                       ---------------
listed in  Schedule  3.1.U  has  indicated  that it shall  stop,  or  materially
           ---------------
decrease the rate of, buying  materials,  products or services from the Company,
and no supplier  listed in Schedule  3.1.U has indicated  that it shall stop, or
                           ---------------
materially  decrease the rate of, supplying  materials,  products or services to
the Company.

          V. Certain Agreements.  All Material Contracts,  real property leases,
             ------------------
Personal  Property Leases and all other contracts and agreements of the Company,
including,  without  limitation,  open sales orders and unfilled purchase orders
(collectively,  the "Commitments")  are legal, valid and binding  obligations of
the  Company  enforceable  (except as  enforcement  may be limited by  equitable
principles limiting the right to obtain specific  performance or other equitable
remedies or by applicable  bankruptcy or insolvency  Laws and related  decisions
affecting creditors' rights generally) against the Company and, to the knowledge
of the Company or the  Shareholders,  against the other party in accordance with
their respective terms, are fully transferable  without the consent of any third
party, except as listed on Schedule 3.1.M or Schedule 3.1.V.
                           --------------------------------

          W. Inventory.  Except as provided in Schedule 3.1.W,  the Inventory as
             ---------                         --------------
reflected in the Current  Balance Sheet is carried at an amount not in excess of
the lower of cost or net realizable value. The Inventory is merchantable and fit
for the purpose for which it was procured or manufactured,  and none of which is
defective,  or not usable or saleable in the ordinary  course of business of the
Company as heretofore conducted, subject to the inventory valuation reserves set
forth on the Final Working  Capital  Statement,  which will not exceed those set
forth on the Current  Balance  Sheet.  Since February 28, 2005, no inventory has
been sold or disposed of by the Company  except  through  sales in the  ordinary
course of business.

          X. Notes and  Accounts  Receivable.  Except as  provided  in  Schedule
             -------------------------------                            --------
3.1.X, all notes and accounts  receivable of the Company are reflected  properly
-----
on their respective books and records,  are valid and existing receivables which
arose in the ordinary  course of business and are subject to no refunds or other
adjustments  and to no defenses,  rights of setoff,  assignments,  restrictions,
encumbrances,  conditions  enforceable by third parties,  or counterclaims,  and
will be fully collectible by the Company in accordance with their terms at their
recorded  amounts,  subject  only to the  reserve for bad debts set forth in the
Final Working Capital Statement,  which will not exceed the reserve therefor set
forth on the Current  Balance  Sheet as adjusted for the passage of time through
the Closing Date in accordance with the past custom and practice of the Company.

                                       17
<PAGE>

          Y. Bank  Accounts;  Safe Deposit  Boxes.  Schedule  3.1.Y sets forth a
             ------------------------------------   ---------------
complete  and  correct  list of each  account  with  any  bank,  trust  company,
securities broker or other financial  institution with which the Company has any
account and all safe deposit boxes  maintained by the Company,  the  identifying
numbers or symbols thereof.

          Z.  Guaranties.  Except as set forth in Schedule 3.1.Z, the Company is
              ----------                          --------------
not a guarantor for any liability or obligation (including  indebtedness) of any
third party.

          AA. Certain  Business  Relationships  with the Company.  Except as set
              --------------------------------------------------
forth in Schedule  3.1.AA,  Shareholders  have not been involved in any business
         ----------------
arrangement  or  relationship  with the Company  within the past 12 months,  and
Shareholders own no asset, tangible or intangible, which is used in the business
of the Company.

          BB.  Independent  Product  Analyses.  The  Company  has  provided  the
               ------------------------------
Purchaser with the independent product analyses set forth on Schedule 3.1.BB.
                                                             ---------------

          CC.  Employees and  Consultants.  Schedule  3.1.CC contains a true and
               --------------------------   ----------------
complete list of the names,  titles or job classifications and salaries or rates
of  compensation  of all employees  and  consultants  of the Company.  Except as
disclosed in Schedule 3.1.CC,  none of such persons has an employment  agreement
             ---------------
or  understanding,  whether  oral or  written,  with  the  Company  which is not
immediately terminable by the Company at any time upon notice to the other party
without cost or other liability to the Company.  Except as set forth in Schedule
                                                                        --------
3.1.CC, no employee or consultant of the Company has advised the Company (orally
------
or in writing) that he intends to terminate  employment  or engagement  with the
Company.  The Company has complied in all material  respects with all applicable
Laws relating to employment and labor,  including  provisions relating to wages,
hours,  equal  opportunity,  collective  bargaining  and the  payment  of Social
Security and other taxes, and with ERISA.

          DD.  Books and  Records.  The books of account,  minute  books,  stock
               ------------------
record  books,  and other  records of the  Company,  all of which have been made
available to  Purchaser,  are complete and correct in all material  respects and
have been maintained in accordance with sound business practices,  including the
maintenance of an adequate system of internal controls.  The minute books of the
Company  contain  accurate  and complete  records of all  meetings  held of, and
corporate  action  taken  by,  the  stockholders,  the Board of  Directors,  and
committees of the Board of Directors of the Company,  and no material meeting of
any such stockholders,  Board of Directors, or committee has been held for which
minutes have not been prepared and are not  contained in such minute  books.  At
the  Closing,  all of those books and records will be in the  possession  of the
Company.

      Section  3.2   Representations   and  Warranties  of  Shareholders.   Each
                     ---------------------------------------------------
Shareholder  represents and warrants to the Purchaser,  but only with respect to
such Shareholder, as follows:

          A.  Approvals.  All  consents,  approvals,  authorizations  and orders
              ---------
(corporate,  governmental  or otherwise)  necessary  for the due  authorization,
execution and delivery by the  Shareholders of this Agreement and the valid sale
and delivery of the Shares have been  obtained or will be obtained  prior to the
Closing Date.

                                       18
<PAGE>

          B.  Authorization.  The Shareholder has all right, power and authority
              -------------
to enter into this Agreement,  the Escrow Agreement,  the Noncompete  Agreements
referred  to  in  Section  8.1.F  (if  applicable)  and  all  other   agreements
contemplated by or referred to in this Agreement to which such  Shareholder is a
party and to perform fully his, her or its obligations hereunder and thereunder.
This Agreement,  the Escrow  Agreement,  the Noncompete  Agreement and all other
agreements  contemplated  by or  referred  to in this  Agreement  have been duly
executed  and  delivered  by such  Shareholder  and are the  valid  and  binding
obligations of such Shareholder enforceable against him, her or it in accordance
with their terms,  except as enforcement may be limited by equitable  principles
limiting the right to obtain specific  performance or other equitable  remedies,
or by applicable  bankruptcy or insolvency Laws and related decisions  affecting
creditors' rights generally.

          C. No Conflict.  The  execution  and delivery of this  Agreement,  the
             -----------
Escrow   Agreement,   the  Noncompete   Agreements  and  all  other   agreements
contemplated  by or  referred  to in this  Agreement  by such  Shareholder,  the
consummation by such  Shareholder of the  transactions  contemplated  herein and
therein, the sale to the Purchaser of the Shares owned by such Shareholder,  and
the performance by such Shareholder of this Agreement, the Escrow Agreement, the
Noncompete Agreement and all other agreements  contemplated by or referred to in
this  Agreement in accordance  with their  respective  terms do not and will not
conflict  with or  result  in a  breach  of any  terms  and  provisions  of,  or
constitute a default under or conflict with, any material  agreement,  indenture
or  other  instrument  to which  such  Shareholder  is a party or by which  such
Shareholder  or  his  or  its  assets  are  bound,  or as  to  the  articles  of
incorporation or by-laws of the Company, or any judgment, decree, order or award
of any court,  governmental  body of  arbitrator  or any Law  applicable  to the
Shareholder.

          D. Title to Shares. The Shareholder is the record and beneficial owner
             ---------------
of and has good and valid title to his, her or its Shares, free and clear of any
liens,  pledges,  charges,  security  interests,  encumbrances,  title retention
agreements,  adverse claims or options, and upon the delivery of and payment for
the Shares at the Closing as provided  for herein,  the  Purchaser  will acquire
good and valid title  thereto,  free and clear of any liens,  pledges,  charges,
security interests,  encumbrances, title retention agreements, adverse claims or
options.

      Section 3.3 Definition of "Knowledge". For purposes of this Agreement, the
                  -------------------------
terms "to the  knowledge"  of the Company or "to the  knowledge"  of the Company
and/or  the  Shareholders  or other  term of  similar  import  means the  actual
knowledge of the officers of the Company  and/or the  Shareholders,  as the case
may be.

      Section 3.4 Disclosure.  No representation or warranty made by the Company
                  ----------
or the  Shareholders  in  this  Agreement,  any  Schedule,  any  Exhibit  or any
certificate delivered, or to be delivered, by or on behalf of the Company or the
Shareholders  pursuant hereto contains or will contain any untrue statement of a
material fact or omits or will omit to state a material  fact  necessary to make
the statements contained herein or therein not materially  misleading.  There is
no fact  which  the  Company  or the  Shareholders  have  not  disclosed  to the
Purchaser in writing which the Company or the Shareholders presently believe has
or may have a  Material  Adverse  Effect on the  properties,  assets,  business,
operations,  financial  condition or prospects of the Company or the business or
on the ability of the Company or Shareholders to perform their obligations under
this Agreement.  Matters  disclosed on any Schedule shall be deemed disclosed

                                       19
<PAGE>

on all  Schedules,  to the extent it is  reasonably  clear from a reading of the
disclosure,  and not an actual  reading of the document,  sections or paragraphs
that  are  the  subject  matter  of the  disclosure,  that  such  disclosure  is
applicable to such other Schedules.

          ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.

      Section 4.1 Representations and Warranties.  The Purchaser  represents and
                  ------------------------------
warrants to the Shareholders as follows:

          A.  Organization  and Standing.  The  Purchaser is a corporation  duly
              --------------------------
incorporated,  organized,  and validly  existing  under the Laws of the State of
Delaware  and has all  requisite  corporate  power and  authority to execute and
deliver this Agreement and to consummate the  transactions  contemplated  hereby
and perform its obligations hereunder.

          B. Authorization.  All corporate and other proceedings  required to be
             -------------
taken on the part of the Purchaser,  including,  without limitation,  all action
required  to be taken by the  directors  or  shareholders  of the  Purchaser  to
authorize  the  Purchaser  to enter  into and  carry out this  Agreement  and to
purchase the Shares hereunder,  have been, or prior to the Closing will be, duly
and properly taken.  This Agreement and all other agreements  contemplated by or
referred to in this  Agreement  have been duly  executed  and  delivered  by the
Purchaser and are the valid and binding obligations of the Purchaser enforceable
against it in accordance with their terms,  except as enforcement may be limited
by equitable  principles  limiting the right to obtain  specific  performance or
other  equitable  remedies,  or by applicable  bankruptcy or insolvency Laws and
related decisions affecting creditors' rights generally.

          C.  Compliance.  The execution  and delivery of this  Agreement by the
              ----------
Purchaser and the consummation by the Purchaser of the transactions contemplated
hereby,  upon satisfaction of the conditions set forth in Article 7 hereof, will
not:

              i. result in the breach of any of the terms or  conditions  of, or
constitute a default under or violate,  as the case may be, the  certificate  of
incorporation or by-laws of the Purchaser,  or any agreement,  lease,  mortgage,
note,  bond,  indenture,  license  or other  document  or  undertaking,  oral or
written,  to which the  Purchaser or any of its  subsidiaries  or  affiliates is
bound, or by which any of its or their properties or assets may be affected; or

              ii.  violate  any rule,  regulation,  writ,  injunction,  order or
decree of any court, administrative agency or governmental body.

          D.   Litigation.   There  are  no  actions,   suits,   proceedings  or
               ----------
investigations pending, or to the Purchaser's knowledge,  threatened against the
Purchaser  which  question the validity of this Agreement or of any action taken
or to be taken by the Purchaser in connection  herewith or the  consummation  by
the Purchaser of the transactions contemplated herein.

          E.  Brokers,  Finders.  The  Purchaser  has not retained any broker or
              -----------------
finder  in  connection  with the  transactions  contemplated  herein  and is not
obligated and has not agreed to pay any brokerage or finder's commission, fee or
similar compensation.

                                       20
<PAGE>

          F.  Approvals.  All  consents,  approvals,  authorizations  and orders
              ---------
(corporate,  governmental  or otherwise)  necessary  for the due  authorization,
execution and delivery by the Purchaser of this  Agreement and the  consummation
by the Purchaser of the transactions  contemplated  hereby have been obtained or
will be obtained prior to the Closing Date.

          G. Financial Condition.  The Purchaser has the financial  capabilities
             -------------------
to fully meet and perform all of its obligations under this Agreement.

                      ARTICLE 5. COVENANTS AND AGREEMENTS.

      Section 5.1 [RESERVED].

      Section 5.2 Reasonable Best Efforts to Close. During the period commencing
                  --------------------------------
on the date of the execution of this Agreement and continuing  until the Closing
Date, the Purchaser and the Shareholders shall use their reasonable best efforts
to comply promptly with all requests or requirements which applicable federal or
state Law or  governmental  officials  may  impose on them with  respect  to the
transactions  which are the subject of this  Agreement,  and to consummate  such
transactions  as promptly as  practicable.  The  reasonable  best efforts of the
Purchaser and the Shareholders  shall include,  without  limitation,  good faith
response,  in  cooperation  with each other,  to all requests  for  information,
documentary or otherwise, by any governmental agency.

      Section  5.3  Disclosures.  Except as  required  by Law or stock  exchange
                    -----------
rules,  or  occurring  after  the  Closing,  neither  the  Shareholders  nor the
Purchaser,  without the prior written consent of the other,  will make any press
release  or  any  similar  public   announcement   concerning  the  transactions
contemplated  hereby without the prior written  approval of the Purchaser or the
Shareholders' Representative. Except as required by Law or stock exchange rules,
or  occurring  after the  Closing,  no written or oral  announcement  or private
disclosure with respect to the transactions  contemplated hereby will be made to
any  person  unrelated  to the  Shareholders  or the  Purchaser  unless  jointly
approved by the Shareholders' Representative and the Purchaser. If disclosure is
required by Law or stock exchange rules,  the disclosing  Party shall consult in
advance  with the other  Party and  attempt in good faith to reflect  such other
Party's concerns in the required disclosures.

      Section  5.4  Tax Returns.  The  Shareholders  shall  file any  applicable
                    -----------
federal and state income tax returns for the Company for all periods expiring on
or before the Closing Date.

      Section 5.5  Notice of Developments.  The Company will give prompt written
                   ----------------------
notice to the  Purchaser  of any  development  which might  result in a Material
Adverse Effect or cause a breach of any of the representations and warranties in
Article 3 above. Each Party will give prompt written notice to the others of any
material  adverse  development  causing a breach  of any of his,  her or its own
representations and warranties in this Agreement.

      Section 5.6 Property Not Used in the Business. Prior to or at the Closing,
                  ---------------------------------
the Company  shall  divest  itself of or  otherwise  transfer  (i) to Suzanne R.
Sherman or her assigns,  the parcel of real property  (approximately 3.47 acres)
owned by the Company on which the operations of Chelated Minerals International,
Inc.  ("CMI") are currently  situated,  as described

                                       21
<PAGE>

on  Schedule  3.1.M (the "CMI  Property")  and (ii) those  assets,  tangible  or
intangible, listed on Schedule 5.6 of this Agreement.
                      ------------

      Section 5.7  Real Property.  Following the Closing,  the Company agrees to
                   -------------
reasonably  cooperate  in obtaining  all  additional  governmental  consents and
approvals  necessary to divide the CMI Property from the real property  owned by
the Company, provided that the Company shall not be required to incur any out of
pocket expenses in connection with obtaining such consents and approvals.

      Section 5.8 Restrictions on Distributions to Limited  Partners.  Following
                  --------------------------------------------------
the Closing,  the Partnership,  and Suzanne R. Sherman as general partner of the
Partnership, agree that the Partnership will at all times retain sufficient cash
and liquid assets to pay the  Partnership's  pro rata share of the Indemnity Cap
as defined in Section 9.3 until the  Partnership's  indemnification  obligations
under  Section  9.1 and 9.3  terminate.  The  Purchaser  shall have the right to
request periodic statements from the Partnership demonstrating compliance by the
Partnership with this Section.

                ARTICLE 6. CONDUCT OF BUSINESS PENDING CLOSING.

      Section 6.1 Conduct of Business Pending Closing.  The Shareholders and the
                  -----------------------------------
Company agree that, pending the Closing:

      Section 6.2 Conduct of Business in Ordinary Course. The Shareholders shall
                  --------------------------------------
cause the Company to conduct its business in a manner  consistent  with the past
practices of the Company,  and the  Shareholders  shall cause the Company not to
engage in any transactions out of the ordinary course of business.  Furthermore,
except as may otherwise be required under this Agreement, the Shareholders shall
cause the Company not to do any of the  following  without the prior  consent of
the Purchaser:

          A. incur or permit to be incurred any obligation or other  liabilities
(exclusive of normal wages,  salaries,  and insurance  premiums) which would, in
the  aggregate,  be in excess of $20,000  except for inventory  purchases in the
normal and ordinary course of business consistent with past practice;

          B. voluntarily permit to be incurred any lien or encumbrance on any of
the assets of the Company;

          C. increase the  compensation  payable or to become  payable to any of
the employees of the Company,  except for  increases in the ordinary  course and
consistent with past practice,  or otherwise enter into or alter any employment,
consulting, or service agreement;

          D.  commence,  enter  into,  or alter  any  profit  sharing,  deferred
compensation,  bonus,  stock option,  stock purchase,  pension,  retirement,  or
incentive plan or any fringe benefit plan for employees of the Company;

          E. sever or terminate any employees of the Company except for cause in
the ordinary course of business;

                                       22
<PAGE>

          F. make or commit to any capital  expenditure  in excess of $20,000 or
make or  commit to such  expenditures  which  would,  in the  aggregate,  exceed
$40,000.

          G. make any tax election or settle or compromise any Tax liability.

      Section 6.3  No Changes to Organization  Documents. No change will be made
                   -------------------------------------
to the organization documents of the Company.

      Section  6.4  Changes  to  Capital  Stock.  No  issuance,   sale,  pledge,
                    ---------------------------
disposition or encumbrance of, or authorization of the issuance,  sale,  pledge,
disposition or encumbrance  of, any shares of capital stock of any class, or any
options, warrants, convertible securities or other rights of any kind to acquire
any shares of capital stock of, or any other  ownership  interest in the Company
will be made.  Notwithstanding  the preceding,  the Purchaser  acknowledges that
certain  options  held by  Shareholders  shall be  converted to shares of common
stock immediately prior to or  contemporaneously  with the Closing. The exercise
price of such  options  will be deemed paid to the Company  prior to Closing and
distributed  to all  Shareholders  pro rata based on  post-exercise  Shareholder
ownership  percentages  pursuant to Section 6.5(iii) or pursuant to the Purchase
Price  Adjustment  described in Section 2.3. The  Shareholders  holding  options
acknowledge that this may result in such Shareholders  receiving less than their
post-exercise pro rata percentage of the Purchase Price.

      Section 6.5  Dividends and  Transfers. Notwithstanding  any  provisions of
                   ------------------------
Articles  3, 5 or 6, (i) the Company  shall pay all  amounts  owed on account of
stock  appreciation  rights as shown on Schedule 3.1.Q; (ii) the Company may, in
                                        --------------
the Company's sole discretion,  pay bonuses and SEP payments to employees; (iii)
the Company may, in its sole  discretion,  dividend to the Shareholders all cash
of the  Company  prior to  Closing;  and (iv) make the  transfers  described  in
Section 5.6.

      Section  6.6  Audit.    The  Company  will  retain  the  certified  public
                    -----
accounting firm of McGladrey & Pullen, LLP, to conduct an audit of the Company's
Financial Statements (the "Audit") prior to the Closing.  Following the Closing,
and  notwithstanding  any provision of this  Agreement,  the Company will remain
liable  for  the  payment  of all  accounting  fees  and  expenses  incurred  in
connection  with the Audit and such fees and expenses  will be excluded from the
Final Working Capital  Statement and will in no way reduce the Purchase Price or
the Purchase Price  adjustment.  The Purchaser and the Shareholders  acknowledge
that (i) the Audit is required for purposes of the  Purchasers'  compliance with
certain Laws and that the Audit is not part of  Purchaser's  due  diligence  and
will not be used to adjust the Purchase  Price and (ii) the  Purchase  Price has
already been  adjusted to account for the  Shareholders'  portion of the cost of
the Audit.

             ARTICLE 7. CLOSING DATE, CONDITIONS AND TRANSACTIONS.

      Section  7.1  Closing  Date and Place.  The  consummation  of the sale and
                    -----------------------
purchase of the Shares  contemplated by this Agreement (the "Closing") will take
place at the  offices  of the Mabey  Murray LC at 136 South Main  Street,  Suite
1000, Salt Lake City, Utah at 10:00 A.M. Mountain within five (5) days following
completion  of the  Audit,  or at such  other  date and time as may be  mutually
agreeable to the parties hereto (the "Closing Date").  In the event the Audit is
completed  after  November 25, 2005,  the  Shareholders  shall have the right to
extend the Closing

                                       23
<PAGE>

Date until no later than  January 5, 2006.  The Closing  will be effective as of
the end of business on the Closing Date. At the Closing,  the Shareholders  will
deliver  to the  Purchaser  certificates  representing  all of the  Shares  duly
endorsed for transfer or accompanied  by duly executed  stock powers,  in either
case executed in favor of the Purchaser or its nominee as the Purchaser may have
directed prior to the Closing. At the Closing, the Purchaser will deliver to the
Shareholders the Purchase Price as provided in Section 2 hereof.

      Section 7.2 Conditions Precedent to the Obligations of the Purchaser.  The
                  --------------------------------------------------------
obligations of the Purchaser under this Agreement are subject to the fulfillment
prior to or at the Closing of each of the following conditions,  any one or more
of which may be waived by the Purchaser.

          A. No Injunctive  Proceedings.  No preliminary or permanent injunction
             --------------------------
or other order (including a temporary restraining order) of any state or federal
court or other  governmental  agency  which  prevents  the  consummation  of the
transactions   which  are  the  subject  of  this  Agreement  or  prohibits  the
Purchaser's  ownership of the Shares shall have been issued and remain in effect
(provided that the Purchaser has acted in accordance  with the  requirements  of
Section 5.2 hereof).

          B. Representations and Warranties.  All representations and warranties
             ------------------------------
of the Company and/or the Shareholders contained in this Agreement shall be true
and  correct in all  material  respects as of the  Closing  Date,  except (i) as
otherwise  contemplated by this Agreement,  and (ii) that no  representation  or
warranty of the Company and/or the Shareholders  shall be deemed to be untrue or
incorrect by reason of any  transaction  that  conforms to the  requirements  of
Articles  5 or 6  hereof.  In the event  that the  Purchaser  believes  any such
representations or warranties to be untrue or incorrect in any material respect,
the  Shareholders  shall have ten (10) days  following  written  notice from the
Purchaser to remedy such representation or warranty.

          C. Performance of Agreements; Instruments of Transfer. The Company and
             --------------------------------------------------
the  Shareholders  shall have  fully  performed  in all  material  respects  all
obligations,  agreements, conditions and commitments required to be fulfilled by
the Company and the Shareholders pursuant to the terms hereof on or prior to the
Closing  Date and the  Shareholders  shall have  tendered to the  Purchaser  the
Shares and other documents,  instruments and certificates  required by Article 8
hereof. In the event that the Purchaser believes any such obligation, agreement,
condition or commitment has not been fully  performed in all material  respects,
the  Shareholders  shall have ten (10) days  following  written  notice from the
Purchaser to remedy such nonperformance.

          D.  Material  Adverse  Effect.  There shall not have been any Material
              -------------------------
Adverse Effect from the date hereof to the Closing Date.

          E. Consents. All authorizations,  consents or approvals of any and all
             --------
governmental   regulatory   authorities   necessary  in   connection   with  the
consummation  of the Closing  shall have been  obtained and be in full force and
effect.

          F. Due Diligence.  The Purchaser shall have completed all business and
             -------------
legal review of the Company by October 31, 2005 and the  Purchaser  shall in its
reasonable discretion be satisfied with the results of said review.

                                       24
<PAGE>

          G. Audit. The Company shall have completed the Audit.
             -----

      Section 7.3 Conditions  Precedent to the Obligations of the  Shareholders.
                  -------------------------------------------------------------
The obligations of the Shareholders  and/or the Company under this Agreement are
subject  to the  fulfillment  prior  to the  Closing  of each  of the  following
conditions,  any one or more of which may be waived by the  Shareholders and the
Company:

          A. No Injunctive  Proceedings.  No preliminary or permanent injunction
             --------------------------
or other order (including a temporary restraining order) of any state or federal
court or other  governmental  agency  which  prevents  the  consummation  of the
transactions   which  are  the  subject  of  this  Agreement  or  prohibits  the
Purchaser's  ownership of the Shares shall have been issued and remain in effect
(provided that the  Shareholders  have acted in accordance with the requirements
of Section 5.2 hereof).

          B. Payment.  The Purchaser  shall have delivered to the  Shareholders'
             -------
Representative  the  payments  provided  for in  Section 2 hereof  and all other
payments  required to be made by the  Purchaser on the Closing Date  pursuant to
the terms hereof.

          C. Representations and Warranties. Except as otherwise contemplated by
             ------------------------------
this Agreement, all representations and warranties of the Purchaser contained in
this  Agreement  shall be true and  correct in all  material  respects as of the
Closing Date.

          D. Performance of Agreements;  Instruments of Transfer.  The Purchaser
             ---------------------------------------------------
shall have fully performed in all material respects all obligations, agreements,
conditions and commitments required to be fulfilled by the Purchaser on or prior
to the Closing Date and shall have tendered to the  Shareholders  the documents,
instruments and certificates required by Article 8 hereof.

          E. Consents. All authorizations,  consents or approvals of any and all
             --------
governmental   regulatory   authorities   necessary  in   connection   with  the
consummation  of the Closing  shall have been  obtained and be in full force and
effect.

          F.  Release.  The  Shareholder  shall have  received  releases  of all
              -------
personal   guaranties  and   liabilities  of  the  Company  in  form  reasonably
satisfactory to the Shareholders.

      Section 7.4  Noncompliance  with and Termination of This  Agreement.  This
                   ------------------------------------------------------
Agreement may be terminated at any time prior to Closing:

          A. by the written mutual agreement of the  Shareholders,  the Company,
and the Purchaser;

          B. by the Purchaser, if any of the conditions specified in Section 7.2
hereof  shall not have been met prior to Closing  and shall not have been waived
in writing by the Purchaser;

          C. by the Shareholders  and the Company,  if any of the conditions set
forth in Section  7.3 hereof  shall not have been met prior to Closing and shall
not have  been  waived  in  writing  by the  Shareholders;  provided  that  such
termination  shall not relieve the  Purchaser of any

                                       25
<PAGE>

obligations  under Section 10.8 or any  confidentiality  agreements  between the
Company and the Purchaser; or

          D. by either the Company or Purchaser after January 6, 2006,  provided
the Closing has yet to occur on said date.

          E.

                         ARTICLE 8. CLOSING DOCUMENTS.

      Section 8.1  Shareholders'  Obligations.  At the Closing, the Shareholders
                   --------------------------
shall deliver to the Purchaser the following:

          A. Resolutions.  Copies of resolutions of the Company certified by the
             -----------
Secretary or Assistant Secretary of the Company, as the case may be, authorizing
the execution,  delivery and performance of this Agreement and the  transactions
contemplated hereby.

          B. Share  Certificates.  Certificates  representing  the Shares,  duly
             -------------------
endorsed in blank or accompanied by an appropriate stock power.

          C. Books and Records.  The Company's corporate minute books, seals and
             -----------------
stock ledger books.

          D.  Resignations.  Resignations  of all officers and  directors of the
              ------------
Company.

          E. Escrow Agreement.  The Escrow Agreement duly executed by all of the
             ----------------
Shareholders.

          F. Noncompete  Agreement.  A Noncompete Agreement in substantially the
             ---------------------
form  attached  hereto  as  Exhibit  C  duly  executed  by  CMI  and  all of the
Shareholders other than Frank D'Angelo and the Church.

      Section 8.2 The  Purchaser's  Obligations.  At the Closing,  the Purchaser
                  -----------------------------
shall deliver to the Shareholders the following:

          A.  Payment.  Funds in the amounts and payable as set forth in Section
              -------
2.1 hereof and all other  payments  required to be made by the  Purchaser  on or
prior to the Closing Date pursuant to the provisions of this Agreement.

          B.  Escrow  Agreement.  The  Escrow  Agreement  duly  executed  by the
              -----------------
Purchaser.

          C.  Consulting  Agreements.  The  Consulting  Agreements  for Bruce R.
              ----------------------
Sherman and Frank  Ciaramella  duly  executed by the  Purchaser  and  reasonably
acceptable to the parties thereto.

      Section 8.3  The Company's  Obligations.  At or prior to the Closing,  the
                   --------------------------
Company shall deliver the following:

                                       26
<PAGE>

          A. Deed. A Special  Warranty Deed to Suzanne R. Sherman or her assigns
             ----
duly  executed  by the  Company in  substantially  the form  attached  hereto as
Exhibit D conveying the CMI Property.

          B. [RESERVED]

          C. Shared  Services  Agreement.  The Shared  Services  Agreement  duly
             ---------------------------
executed by the Company in substantially the form attached hereto as Exhibit E.

          D. Amendment to License Agreement. The Amended and Restated Technology
             ------------------------------
License  Agreement  duly  executed  by the  Company  in  substantially  the form
attached hereto as Exhibit F.

                          ARTICLE 9. INDEMNIFICATION.

      Section 9.1 Indemnification by the Shareholders. Subject to the limits set
                  -----------------------------------
forth in this Article 9, the  Shareholders,  pro rata in  accordance  with their
ownership of the  applicable  Shares,  agree to  indemnify,  defend and hold the
Purchaser, and each of the Purchaser's officers,  directors,  employees, agents,
successors  and  assigns  (the  Purchaser  and  such  persons  are  collectively
hereinafter referred to as the "Purchaser's Indemnified Persons"), harmless from
and against any and all claim, loss, liability,  damage or deficiency (including
interest,  penalties,  costs of preparation  and  investigation,  and reasonable
attorneys'  fees)  (collectively,  "Losses")  that the  Purchaser's  Indemnified
Persons may suffer,  sustain,  incur or become  subject to arising out of or due
to:  (a)  any  inaccuracy  of any  representation  of the  Company  and/or  such
Shareholder in this Agreement or any other agreement contemplated by or referred
to in this Agreement to which such  Shareholder  is a party,  or any schedule or
exhibit  hereto or thereto,  or any  certificate  delivered  pursuant  hereto or
thereto;  (b) the breach of any warranty of the Company and/or such  Shareholder
in this Agreement or any other agreement  contemplated by or referred to in this
Agreement  to which such  Shareholder  is a party,  or any  schedule  or exhibit
hereto or thereto,  or any certificate  delivered pursuant hereto or thereto; or
(c)  the  nonfulfillment  of  any  covenant,  undertaking,  agreement  or  other
obligation of the Company  and/or such  Shareholder  under this Agreement or any
other  agreement  contemplated by or referred to in this Agreement to which such
Shareholder  is a party,  or any schedule or exhibit  hereto or thereto,  or any
certificate  delivered  pursuant  hereto or thereto not otherwise  waived by the
Purchaser, including, without limitation, any failure by the Shareholders to pay
all Shareholder  Acquisition Expenses (as defined in Section 10.1) in accordance
with the provisions of Section 10.1.

      Section 9.2  Indemnification  by the Purchaser.  Subject to the limits set
                   ---------------------------------
forth in this Article 9, the Purchaser agrees to indemnify,  defend and hold the
Shareholders  and  each  of  the  Shareholders'   successors  and  assigns  (the
Shareholders  and such persons are hereinafter  collectively  referred to as the
"Shareholder's  Indemnified  Persons"),  harmless  from and  against any and all
Losses that the Shareholders'  Indemnified Persons may suffer, sustain, incur or
become  subject  to  arising  out  of or  due  to:  (a)  any  inaccuracy  of any
representation  of the  Purchaser  in  this  Agreement  or any  other  agreement
contemplated  by or referred to in this  Agreement,  or any  schedule or exhibit
hereto or thereto, or any certificate  delivered pursuant hereto or thereto; (b)
the breach of any  warranty  of the  Purchaser  in this  Agreement  or any other
agreement  contemplated by or referred to in this Agreement,  or any schedule or
exhibit  hereto or

                                       27
<PAGE>

thereto,  or any certificate  delivered  pursuant hereto or thereto;  or (c) the
nonfulfillment  of any covenant,  undertaking,  agreement or other obligation of
the Purchaser  under this Agreement or any other  agreement  contemplated  by or
referred to in this Agreement,  or any schedule or exhibit hereto or thereto, or
any certificate delivered pursuant hereto or thereto not otherwise waived by the
Shareholders, including, without limitation, any failure by the Purchaser to pay
all  Purchaser  Acquisition  Expenses (as defined in Section 10.1) in accordance
with the provisions of Section 10.1.

      Section 9.3  Survival of Representations, and Warranties;  Deductible. The
                   --------------------------------------------------------
representations  and warranties of the parties contained in this Agreement or in
any document  delivered  pursuant  hereto and the parties' right to indemnity in
accordance  with this Article 9 shall  survive the Closing Date and shall remain
in full force and effect thereafter for a period of twelve (12) months after the
Closing Date and shall be effective  with respect to any  inaccuracy  therein or
breach thereof,  notice of which shall have been duly given within such 12 month
period in  accordance  with  Section 9.4 hereof,  after which  twelve (12) month
period  they shall  terminate  and be of no further  force or effect.  Except as
provided  in  Section   9.5,   anything  to  the   contrary   contained   herein
notwithstanding,  neither party shall be entitled to any recovery from the other
party  with  respect  to  any  inaccuracy  or  breach  of  such   warranties  or
representations  unless and until the amount of such Losses suffered,  sustained
or incurred by the asserting party, or to which such party becomes  subject,  by
reason of such  inaccuracy  or breach,  shall  exceed  $60,000  calculated  on a
cumulative basis.  Notwithstanding any other provision of this Agreement,  in no
event shall the  Shareholders  or the Purchaser be liable to the other,  in each
case, in an aggregate  amount in excess of $7,500,000 (the "Indemnity  Cap"). As
an illustration of the provisions of Sections 9.1 and 9.3, a Shareholder holding
10% of the Shares could not be liable to the  Purchaser  in an amount  exceeding
$750,000. Notwithstanding anything to the contrary contained in this Section 9.3
to the contrary,  the covenants of the parties contained in this Agreement shall
survive according to their respective terms.

      Section 9.4  Notice and Opportunity  to Defend.  If there  occurs an event
                   ---------------------------------
which either party asserts is an indemnifiable event pursuant to Sections 9.1 or
9.2 hereof, the party seeking  indemnification  (the "Indemnitee")  shall notify
the party obligated to provide  indemnification (the "Indemnitor")  promptly. If
such event  involves  (a) any claim,  or (b) the  commencement  of any action or
proceeding by a third person,  the Indemnitee shall give the Indemnitor  written
notice of such claim or the commencement of such action or proceeding.  Delay or
failure to so notify the  Indemnitor  shall only relieve the  Indemnitor  of its
obligations hereunder to the extent, if at all, that it is prejudiced by reasons
of such delay or failure.  The  Indemnitor  shall have a period of fifteen  (15)
days (or such lesser period as circumstances  may dictate,  if the nature of the
claim requires an earlier response) within which to notify the Indemnitee of its
intention to assume responsibility for the defense or settlement of the claim or
action, and shall have the right to compromise or defend, at its own expense and
by  counsel  chosen  by  the  Indemnitor  and  reasonably  satisfactory  to  the
Indemnitee,  such matter, so long as (i) the Indemnitor  notifies the Indemnitee
of its intention to assume responsibility to do so within the prescribed period;
(ii) the  Indemnitor  provides the  Indemnitee  with such  assurances  as may be
reasonably  required by the  Indemnitee  to assure that the  Indemnitor  has the
financial  resources to and will assume and be responsible  for the liability at
issue,  subject to the  limitations  set forth in Section 9.5 hereof,  (iii) the
particular  claim or cause of action  involves  only money  damages and does not
seek an injunction or other equitable relief,  (iv) settlement of, or an adverse
judgment with respect to, the

                                       28
<PAGE>

claim or action is not, in the good faith judgment of the Indemnitee,  likely to
establish a precedential custom or practice materially adverse to the continuing
business  interests  of the  Indemnitee,  and (v) the  Indemnitor  conducts  the
defense of the claim or action actively and  diligently.  If the Indemnitor does
not  respond  within such  period or rejects  responsibility  for such matter in
whole  or in  part,  or if any of the  conditions  set  forth  in the  preceding
sentence is not satisfied or becomes  unsatisfied,  the Indemnitee shall be free
to defend or  compromise  such claim or action in any  matter it may  reasonably
deem  appropriate,  without  prejudice to any of its rights  hereunder,  and may
pursue  any  and  all  remedies  as may be  available  to the  Indemnitee  under
applicable Law. The Indemnitee agrees, at the Indemnitor's cost and expense,  to
cooperate  fully with the Indemnitor and its counsel in the defense  against any
such asserted  liability.  In any event, the Indemnitee and the Indemnitor shall
have the right to participate at its own expense in the defense of such asserted
liability,  including  any  meetings,  discussions,  and  negotiations  with any
adverse party. Any compromise of such asserted liability by the Indemnitor shall
require the prior written  consent of the  Indemnitee  and until such consent is
obtained the Indemnitor  shall continue the defense of such asserted  liability.
If,  however,  the  Indemnitee  refuses  its  consent  to a bona  fide  offer of
settlement  which the  Indemnitor  wishes to accept that  involves  solely money
damages (and no  injunctive or other  equitable  relief) in an amount to be paid
entirely by the Indemnitor  without  contribution by the Indemnitee and provides
for an unconditional  release of the Indemnitee,  the Indemnitee may continue to
pursue such matter,  free of any  participation  by the Indemnitor,  at the sole
expense of the  Indemnitee.  In such event,  the obligation of the Indemnitor to
the  Indemnitee  shall be equal to the  lesser of (i) the amount of the offer of
settlement which the Indemnitee refused to accept plus the costs and expenses of
the Indemnitee  prior to the date the Indemnitor  notifies the Indemnitee of the
offer of settlement,  and (ii) the actual out-of-pocket amount the Indemnitee is
obligated  to pay as a result of the  Indemnitee's  continuing  to  pursue  such
matter.

      Section 9.5  Reduction  for  Insurance.  The amount which an Indemnitor is
                   -------------------------
required to pay to, for, or on behalf of an Indemnitee  pursuant to this Article
9  shall  be  reduced  (including,  without  limitation,  retroactively)  by any
insurance  proceeds  actually  recovered  by or on behalf of the  Indemnitee  in
reduction of the related indemnifiable loss (the "Indemnifiable  Loss"). Amounts
required  to be  paid,  as so  reduced,  are  hereinafter  sometimes  called  an
"Indemnity Payment".  If an Indemnitee shall have received,  or if an Indemnitor
shall  have  paid  on  its  behalf,  an  Indemnity  Payment  in  respect  of  an
Indemnifiable  Loss and shall  subsequently  receive,  directly  or  indirectly,
insurance proceeds in respect of such  Indemnifiable  Loss, then such Indemnitee
shall promptly pay to the Indemnitor the amount of such insurance proceeds,  or,
if less, the amount of the Indemnity Payment.  The parties hereto agree that the
foregoing  shall not affect the  subrogation  rights of any insurance  companies
making payments hereunder.

      Section   9.5  Offset  of  Escrow.   The   Shareholders'   indemnification
                     ------------------
obligations  under Section 9.1 and Section 9.3 shall be secured by $800,000 held
pursuant to the terms of the Escrow Agreement.

                           ARTICLE 10. MISCELLANEOUS.

      Section 10.1  Expenses.  Except as otherwise set forth in this  Agreement,
                    --------
each of the parties  hereto shall pay its own expenses and costs  incurred or to
be  incurred by it in  negotiating,  closing and  carrying  out this  Agreement.
Notwithstanding the foregoing, it is understood and

                                       29
<PAGE>

agreed  that the  Shareholders  will pay all fees and  expenses  incurred by the
Company in  connection  with this  Agreement and the  transactions  contemplated
hereby,  including,  without limitation,  all legal,  accounting (other than the
Audit),  investment banking, tax, financial advisory and other fees and expenses
of third parties  incurred by the Company in connection with the negotiation and
effectuation of the terms and conditions of this Agreement and the  consummation
of the transactions  contemplated  hereby (including,  without  limitation,  all
commissions due to AgriCapital Corporation in connection with this Agreement and
the  transactions  contemplated  hereby but excluding  the $50,000  retainer and
monthly expenses paid to AgriCapital  Corporation by the Company) (collectively,
"Shareholder  Acquisition  Expenses").  The accounting  fees and expenses of the
Audit shall be paid after the Closing Date by the Company. In the event that the
transactions  contemplated  in this Agreement do not close,  the Purchaser shall
pay all accounting  costs and expenses of the Audit (the "Purchaser  Acquisition
Expenses").

      Section  10.2   Notices.   All  notices,   requests,   demands  and  other
                      -------
communications given hereunder (collectively, "Notices") shall be in writing and
delivered  personally  or by overnight  courier to the parties at the  following
addresses or sent by facsimile,  with  confirmation  received,  to the facsimile
number specified below:

      If to the  Shareholders at the address and facsimile number set forth next
to their names on Exhibit A hereto.

      If to the Shareholders, to the Shareholders' Representative at:

                           Suzanne R. Sherman
                           7029 S. Monica Cove
                           Salt Lake City, UT 84121
                           Facsimile:  (801) 943-1681
                           Telephone:  (801) 942-1790

                           With a copy to:

                           David M. Connors
                           Mabey Murray LC
                           136 South Main
                           1000 Kearns Building
                           Salt Lake City, Utah 84101
                           Facsimile:  (801) 359-8256
                           Telephone:  (801) 320-6700

      If to the Purchaser at:

                           Balchem Minerals Corporation
                           c/o Balchem Corporation
                           52 Sunrise Park Road
                           P.O. Box 600
                           New Hampton, New York 10958
                           Telephone:  (845) 326-5662

                                       30
<PAGE>

                           Facsimile:  (845) 326-5702
                           Attn:  Dino A. Rossi

                           with a copy to:

                           Balchem Corporation
                           52 Sunrise Park Road
                           P.O. Box 600
                           New Hampton, New York 10958
                           Telephone:  (845) 326-5662
                           Facsimile:  (845) 326-5702
                           Attn:  General Counsel

      All Notices shall be deemed delivered when actually  received if delivered
      personally  or by  overnight  courier,  sent by  facsimile,  addressed  in
      accordance with this Section.  Each of the parties shall hereafter  notify
      the other in  accordance  with this  Section  of any  change of address or
      facsimile number to which notice is required to be mailed.

      Section 10.3 Counterparts.  This Agreement may be executed  simultaneously
                   ------------
in one or  more  counterparts,  and by  different  parties  hereto  in  separate
counterparts,  each of which when executed shall be deemed an original,  but all
of which taken together shall constitute one and the same instrument.

      Section  10.4 Entire  Agreement.  This  Agreement  constitutes  the entire
                    -----------------
agreement and  supersedes  all prior  agreements  and  understandings  among the
parties hereto with respect to the subject matter hereof.

      Section 10.5 Headings. The headings contained in this Agreement and in the
                   --------
Schedules  and Exhibits  hereto are for  reference  purposes  only and shall not
affect in any way the meaning or interpretation of this Agreement.

      Section 10.6 Assignment;  Amendment of Agreement.  This Agreement shall be
                   -----------------------------------
binding upon the respective  successors and assigns of the parties hereto.  This
Agreement  may not be assigned  by any party  hereto  without the prior  written
consent of all other  parties  hereto.  This  Agreement  may be amended  only by
written  agreement of the parties  hereto,  duly  executed  and  delivered by an
authorized  representative  of each of the parties hereto.  Notwithstanding  the
forgoing,  the  Purchaser  shall  have  the  right  to  assign  its  rights  and
obligations  under this Agreement,  in whole or in part, to an affiliate without
consent.

      Section  10.7  Governing  Law.  This  Agreement  shall be  governed by and
                     --------------
construed and enforced in accordance  with the internal laws of the State of New
York  applicable to contracts  made in that State,  without giving effect to the
conflicts of laws principles thereof.

      Section  10.8  Failure  to Close.  If for any  reason  this  Agreement  is
                     -----------------
terminated prior to the Closing,  the Purchaser shall return to the Shareholders
all  documents  and other  information,  including  all originals and all copies
thereof,  theretofore  delivered  to the  Purchaser by the  Shareholders  or the
Company.  The Purchaser  shall not retain copies of any such  documents or other
information,  and shall not thereafter disclose to any person for any purpose or
use  any

                                       31
<PAGE>

information  conveyed  to the  Purchaser  in  connection  with the  transactions
contemplated  by this  Agreement,  except for such  information  which was:  (a)
possessed by the Purchaser prior to the disclosure  thereof by the  Shareholders
or the Company;  (b)  disclosed to the Purchaser by an  independent  third party
without a violation of any  obligation  of  confidentiality  on the part of such
third party to the Shareholders or the Company; or (c) ascertainable from public
or published information or trade sources.

      Section  10.9 Further  Assurances.  Each party agrees that it will execute
                    -------------------
and deliver, or cause to be executed and delivered, on or after the date of this
Agreement,  all such other  instruments and will take all reasonable  actions as
may be  necessary  to transfer  and convey the Shares to the  Purchaser,  on the
terms herein contained, to consummate the transactions  contemplated hereby, and
to effectuate the provisions and purposes hereof.

      Section  10.10 No Third Party Rights.  This  Agreement is not intended and
                     ---------------------
shall not be  construed  to create  any  rights in any  parties  other  than the
Company,  the  Shareholders  and the  Purchaser  and no person  shall assert any
rights as third party beneficiary hereunder.

      Section 10.11  Non-Waiver.  The failure in any one or more  instances of a
                     ----------
party  hereto to insist  upon  performance  of any of the  terms,  covenants  or
conditions  of this  Agreement,  to  exercise  any  right or  privilege  in this
Agreement  conferred,  or the  waiver by said  party of any breach of any of the
terms,  covenants or  conditions of this  Agreement  shall not be construed as a
subsequent  waiver  of  any  such  terms,  covenants,   conditions,   rights  or
privileges,  but the same shall  continue and remain in full force and effect as
if no such forbearance or waiver had occurred.

      Section  10.12  Severability.  If any  term  or  other  provision  of this
                      ------------
Agreement is invalid, illegal or incapable of being enforced by any rule of Law,
or public policy,  all other  conditions and provisions of this Agreement  shall
nevertheless  remain in full force and effect so long as the  economic  or legal
substance of the transactions  contemplated hereby is not affected in any manner
adverse to any party. Upon such  determination  that any term or other provision
is invalid,  illegal or incapable of being  enforced,  the parties  hereto shall
negotiate  in good faith to modify this  Agreement  so as to affect the original
intent of the parties as closely as possible in an acceptable  manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.

      Section 10.13  Incorporation  of Exhibits and Schedules.  The Exhibits and
                     ----------------------------------------
Schedules hereto are incorporated into this Agreement and shall be deemed a part
hereof as if set forth herein in full. References herein to "this Agreement" and
the words "herein," "hereof" and words of similar import refer to this Agreement
(including  its Exhibits  and  Schedules)  as an  entirety.  In the event of any
conflict  between  the  provisions  of this  Agreement  and any such  Exhibit or
Schedule, the provisions of this Agreement shall control.

      Section 10.14 Release by Shareholders.  As partial  consideration for this
                    -----------------------
Agreement, and other good and valuable consideration, receipt and sufficiency of
which are hereby acknowledged,  subject to and effective upon the Closing,  each
of the  Shareholders,  on behalf of themselves and their respective  successors,
assigns,   legal   representatives,   executors,   administrators  and  estates,
representatives,  agents,  financial advisors and attorneys  (collectively,

                                       32
<PAGE>

the  "Releasors"),   hereby  unconditionally   remises,   releases  and  forever
discharges  the  Company  and  its  successors  and  assigns  and  all of  their
respective officers, directors, stockholders, agents and advisors (collectively,
the "Company  Releasees") from any and all debts,  demands,  actions,  causes of
action, suits, assessments,  contracts,  obligations,  losses, damages and other
claims and liabilities,  in law or in equity, which any of the Releasors now has
or ever had, whether known or unknown,  against the Company Releasees, or any of
them, from the beginning of the world to the date hereof for or by reason of any
event,  occurrence,  matter,  cause  or  thing  whatsoever,  including,  without
limitation, any and all Indebtedness,  compensation, dividends, distributions or
other  amounts of any nature  owed or alleged to be owed by the  Company to such
Shareholder, whether in their capacity as an employee, consultant or stockholder
of the Company or otherwise.

                    [THE REMAINDER OF THIS PAGE INTENTIONALLY
                       LEFT BLANK -SIGNATURE PAGES FOLLOW]


                                       33
<PAGE>

      IN WITNESS WHEREOF,  the Company,  the Purchaser and the Shareholders have
duly  executed and delivered  this  Agreement as of the day and year first above
written.

                            COMPANY:

                            CHELATED MINERALS CORPORATION



                            By:
                                     ------------------------------------
                            Name:    Bruce R. Sherman
                            Title:
                                     ------------------------------------


                            SHAREHOLDERS:

                            ALBERT AND VERLA RICHARDS LTD, PARTNERSHIP



                            By:
                                     ------------------------------------
                                     Suzanne R. Sherman, general partner

                            By:
                                     ------------------------------------
                                     Ruth Ellen R. Bean, general partner





                            By:
                                     ------------------------------------
                            Name:    Bruce R. Sherman



                            By:
                                     ------------------------------------
                            Name:    Suzanne R. Sherman



                            By:
                                     ------------------------------------
                            Name:    Frank Ciaramella



                            By:
                                     ------------------------------------
                            Name:    Frank D'Angelo


                                      S-1
<PAGE>


                            CORPORATION OF THE PRESIDENT OF THE CHURCH  OF JESUS
                            CHRIST OF LATTER-DAY SAINTS



                            By:
                                     ------------------------------------
                            Name:
                                     ------------------------------------
                            Title:
                                     ------------------------------------



                            By:
                                     ------------------------------------
                            Name:    Katie H. Mitchell



                            PURCHASER:

                            BALCHEM MINERALS CORPORATION



                            By:
                                     ------------------------------------
                            Name:
                                     ------------------------------------
                            Title:
                                     ------------------------------------


                                      S-2
</TEXT>
</DOCUMENT>
