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                       UNITED STATES DISTRICT COURT                         MIDDLE DISTRICT OF GEORGIA
                            THOMASVILLE DIVISION



       UNITED STATES OF AMERICA, )  
       )  
       Plaintiff, )  
       )  
       v. ) Civil Action No.:
       )  
       ENGELHARD CORPORATION, ) Filed:
       FLORIDIN COMPANY, )  
       U.S. BORAX INC., and )  
       U.S. SILICA COMPANY, )  
       )  
       Defendants. )  
       )  

                     FINAL PRE-TRIAL ORDER - NON-JURY CASE
             The following constitutes a pre-trial order entered in the above-styled case after
        conference with counsel for the parties:
             (1)  The name, address, and telephone number of the attorneys who will
        conduct the trial are as follows:
                Plaintiff:  Angela L. Hughes, Lead Attorney
                          Nina B. Hale
                          John R. Read
                          Mark F. Sheridan
                          John S. Sciortino
                          William J. Hughes
                          Alexander Y. Thomas
                          Michele B. Felasco

                          Trial Attorneys
                          U.S. Department of Justice, Antitrust Division
                          555 Fourth Street, N.W., Room 9810
                          Washington, D.C. 20001
                          (202) 307-6351


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                Defendant:   Attorneys for Defendant
                          Engelhard Corporation:

                          William T. Lifland
                          Dean Ringel
                          Howard G. Sloane
                          Scott Martin
                          Christopher Nelson
                          Cahill Gordon & Reindel
                          80 Pine Street
                          New York, New York 10005
                          (212) 701-3000

                          H. Jerome Strickland
                          Jones, Cork & Miller
                          Post Office Box 6437
                          435 Second Street, 5th Floor
                          Macon, Georgia 31201
                          (912) 745-2821


                          Attorneys for Defendant
                          Floridin Company, U.S. Silica
                          Company and U.S. Borax Inc.

                          George Chester
                          Robert A. Long
                          William J. Shieber
                          Covington & Burling
                          1201 Pennsylvania Avenue, N.W.
                          Washington, D.C. 20044
                          (202) 662-6000

                          Robert Gunn
                          Michael Smith
                          Martin, Snow, Grant & Napier
                          240 Third Street
                          Post Office Box 1606
                          Macon, Georgia 31202
                          (912) 743-7051
             It is understood that only counsel who personally appear at the pretrial
        conference will be allowed to participate in the trial.


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             (2)  (a)  Companion cases pending in this and other Federal or State courts
        are:                None.
                (b) Possible derivative claims not now the subject of pending litigation:
                            None.
                (c) The estimated time required for trial is: two weeks.
             (3)  (a)  The parties agree that the court has jurisdiction of the parties and
        the subject matter pursuant to 15 U.S.C. 1331 and 1337.
                (b) There are no motions pending for consideration by the court except
        as follows: Plaintiff's Motion to Strike Defendants' Efficiencies Affirmative Defense,
        Plaintiff's Motion in Limine to Exclude Testimony by Defendants' Executives Respecting
        Customers' Opinions About the Transaction, and Plaintiff's Motion in Limine to Exclude
        Evidence Relating to Engelhard's Threat to Exit the Business if the Transaction is
        Enjoined. There may be other issues relating to the admissability of exhibits or
        deposition testimony that are pending as of the time of the pretrial conference.
             (4)  Proposed findings of fact and conclusions of law with citations to the
        record where the evidence may be found or to the statute or case from which the law is
        derived will be filed with the court 21 days after the end of the trial, accompanied by
        post-trial briefs. Reply briefs are due ten days thereafter.
             (5)  (a)  All discovery has been completed, unless otherwise noted, and the
        court will not consider any further motions to compel discovery except for good cause
        shown.


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                (b) Unless otherwise noted, the names of the parties as shown in the
        caption to this order are correct and complete, and there is no question by any party as
        to the misjoinder or non-joinder of any parties.
             (6)  The plaintiff's outline of the case and contentions are contained in the
        Trial Brief of the United States filed with this Court on July 14, 1995.
             (7)  The defendants' outline of the case and contentions are contained in the
        Defendants' Pretrial Memorandum filed with this Court on July 14, 1995.
             (8)  The issues for determination by the court as set forth by the plaintiff are as
        follows:
                (A) Whether the United States has carried its burden of proving that
                Engelhard's proposed acquisition of Floridin's assets may substantially
                lessen competition in the relevant product and geographic markets in
                violation of Section 7 of the Clayton Act.
                     1.  Whether the relevant product market is the mining,
                     processing, and sale of gellant-quality attapulgite clay ("gel clay").
                     2.  Whether the relevant geographic market is the United
                     States.
                     3.  (a)  Whether the proposed acquisition is presumptively
                     illegal because it will substantially increase concentration in a
                     highly concentrated market; or
                          (b)  If defendants successfully rebut the presumption of
                          illegality based on market concentration, whether there is


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                          evidence of anticompetitive effects of the proposed
                          acquisition, that is:
                            i.  Whether the proposed acquisition will result in
                            a reduction in competition in the mining of gel clay.
                            ii.  Whether the proposed acquisition will result in
                            a reduction in competition in processing of gel clay.
                            iii.  Whether the proposed acquisition will result in
                            a reduction in competition in gel clay product quality
                            and innovation.
                            iv.  Whether the proposed acquisition will result in
                            a reduction in gel clay price competition.
                (B) Whether defendants have carried their burden of proving new entry
                or expansion in the relevant market is likely to offset the anticompetitive
                effects of the proposed acquisition.
                     1.  Whether there are substantial barriers to entry into the
                     United States gel clay market.
                     2.  Whether Oil-Dri, who previously entered the market
                     unsuccessfully and exited the market in 1992, is likely to re-enter
                     the United States gel clay market.
                     3.  Whether foreign gel clay is likely to enter the United States
                     gel clay market.


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                (C) Whether defendants have carried their burden of proving that their
                alleged efficiencies have a legal and factual basis, and if so, that they
                outweigh the anticompetitive harm of the proposed acquisition.
                (D) Whether the Engelhard/ITC Supply Contract will be adequate and
                effective relief to restore the competition that would be lost as a result of
                Engelhard's acquisition of the Floridin assets, and if so, the extent to
                which the Court must supervise performance of the Supply Contract and
                retain jurisdiction to protect gel clay customers and the public.
             (9)  The issues for determination by the court as set forth by the defendants
        are as follows:
                (A) Whether the United States has carried its burden of proving that
                the transaction as proposed, including the agreement of March 22, 1995
                between Engelhard and ITC, will probably substantially lessen competition
                in relevant product and geographic markets in violation of Section 7 of the
                Clayton Act.
                (B) Whether new entry or expansion in the relevant market is likely to
                offset any anticompetitive effects of the transaction as are proved.
                (C) Whether defendants have presented sufficient evidence to rebut a
                prima facie case, if established by the plaintiff, by showing that the
                transaction as proposed will create significant efficiencies in the relevant
                market that will ultimately benefit competition and, hence, consumers.


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                (D) Whether any prima facie case, if established by the plaintiff, has
                been rebutted by evidence indicating that Engelhard will withdraw from
                the attapulgite business if the transaction as proposed is enjoined.
             (10)  The parties have stipulated and agreed that:
                (A) this Court has jurisdiction over this action and the parties;
                (B) venue is proper in this District; and
                (C) the defendants are engaged in interstate commerce and in
                     activities substantially affecting interstate commerce.
                The parties are still discussing proposed stipulations and will present any
             other stipulations to which they have agreed to the Court on Monday, July 24 at
             8:00 am.
             (11) The list of documentary and physical evidence that will be tendered at the
        trial by the plaintiff is attached as Exhibit A.
             (12) The list of documentary and physical evidence that will be tendered at the
        trial by the defendants is attached as Exhibit B.
             (13) The plaintiff's final witness list is attached as Exhibit C.
             (14) The defendants' final witness list is attached as Exhibit D.
                As to any will call witnesses, opposing counsel may rely on representation
             by the designated party that he will have a witness present unless notice to the
             contrary is given in sufficient time prior to trial to allow the other party to
             subpoena the witness or obtain his testimony by other means. Only those


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             witnesses listed in the pre-trial order will be allowed to testify and only in the
             manner listed.
             (15) Set down on non-jury calendar for: July 24, 1995
             (16) Other matters: None.
             Dated:


                                      Submitted by:


                                      ________________________________
                                      Angela L. Hughes
                                      Lead Attorney for the Plaintiff
                                      United States Department of Justice
                                      Antitrust Division
                                      555 Fourth Street, N.W., Room 9401
                                      Washington, D.C. 20001


___________________________ ______________________________
George Chester Dean Ringel
Covington & Burling Cahill Gordon & Reindel
1201 Pennsylvania Avenue, N.W. 80 Pine Street
Washington, D.C. 20044 New York, New York 10005
Telephone: (202) 662-6000 Telephone: (212) 701-3000
Facsimile: (202) 662-6291 Facsimile: (212) 5420
                          
                          
___________________________ ______________________________
Robert Gunn H. Jerome Strickland
Martin, Snow, Grant & Napier Jones, Cork & Miller
240 Third Street Post Office Box 6437
Post Office Box 1606 435 Second Street, 5th Floor
Macon, Georgia 31202 Macon, Georgia 31201
Telephone: (912) 743-7051 Telephone: (912) 745-2821
Facsimile: (912) 743- 4204 Facsimile: (912) 743-9609
                          
Attorneys for Defendants Attorneys for Defendant
Floridin Company, U.S. Borax Inc. and U.S. Silica Company Engelhard Corporation





















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             It is hereby ORDERED that the foregoing, including the attachments thereto,
        constitutes the pre-trial order in the above case and supersedes the pleadings which
        may not be further amended except by order of the court to prevent manifest injustice.
             This ________ day of ________________________, 1995.

                                      ________________________________
                                      W. LOUIS SANDS
                                      UNITED STATES DISTRICT JUDGE
                                      MIDDLE DISTRICT OF GEORGIA



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