<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                  For the quarterly period ended JUNE 30, 2000

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

 For the transition period from ______________________to ______________________

                          Commission file number 0-7647

                             HAWKINS CHEMICAL, INC.
                             ----------------------
             (Exact name of registrant as specified in its charter)

           MINNESOTA                                   41-0771293
          -----------                                 ------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation of organization)

             3100 EAST HENNEPIN AVENUE, MINNEAPOLIS, MINNESOTA 55413
             -------------------------------------------------------
              (Address of principal executive offices)     Zip Code
 
                                 (612) 331-6910
                                 --------------
               Registrant's telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

                             YES   X   NO 
                                 -----    -----
       
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                CLASS                           OUTSTANDING AT AUGUST 8, 2000
 --------------------------------------         -----------------------------
 Common Stock, par value $.05 per share                   10,465,539



<PAGE>

                             HAWKINS CHEMICAL, INC.

                               INDEX TO FORM 10-Q


<TABLE>
<CAPTION>
                                                                           Page
                                                                            No.
                                                                           ----


PART  I.             FINANCIAL INFORMATION

<S>      <C>                                                               <C>

Item 1.  Financial Statements:

         Condensed Balance Sheets - June 30, 2000 and October 3, 1999.....    3

         Condensed Statements of Income - Three and Nine Months 
              Ended June 30, 2000 and 1999................................    4

         Condensed Statements of Cash Flows - Nine Months 
              Ended June 30, 2000 and 1999................................    5

         Notes to Condensed Financial Statements..........................  6-8


Item 2.  Management's Discussion and Analysis of Financial Condition 
              and Results of Operations  ................................. 9-13



PART II. OTHER INFORMATION


Item 1.  Legal Proceedings................................................   13


Item 2.  Change in Securities and Use of Proceeds.........................   14


Item 6.  Exhibits and Reports on Form 8-K.................................   14

         Exhibit Index....................................................   15

         Financial Data Schedule  ........................................   
</TABLE>



                                        2


<PAGE>


                          PART I. FINANCIAL INFORMATION


ITEM I.  FINANCIAL STATEMENTS

                             HAWKINS CHEMICAL, INC.
                            CONDENSED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                    JUNE 30, 2000     OCTOBER 3, 1999
                                                                    -------------  ---------------------
                                                                     (Unaudited)   (Derived from audited
                                                                                    financial statements)
<S>                                                                  <C>                <C>        

ASSETS

Current assets:

  Cash and cash equivalents ......................................   $   317,652        $ 4,778,174
  Investments available-for-sale .................................    11,837,037         17,424,700
  Trade receivables-net ..........................................    11,833,558         11,329,211
  Notes receivable ...............................................       326,749            301,920
  Inventories ....................................................     8,812,407          8,379,228
  Prepaid expenses and other .....................................     2,197,266          2,536,448
                                                                     -----------        -----------

        Total current assets .....................................    35,324,669         44,749,681

Property, plant and equipment-net ................................    23,131,661         18,664,999
Notes receivable-noncurrent ......................................     2,447,859          2,844,220

Other assets .....................................................     6,008,089          2,740,927
                                                                     -----------        -----------

  Total ..........................................................   $66,912,278        $68,999,827
                                                                     ===========        ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable ...............................................   $ 5,021,657        $ 5,032,268
  Current portion of long-term debt ..............................       102,037             95,362
  Dividends payable ..............................................            --          1,314,154
  Other current liabilities ......................................     3,839,106          4,838,635
                                                                     -----------        -----------

        Total current liabilities ................................     8,962,800         11,280,419
     
Long-term debt ...................................................       226,003            328,040

Deferred income taxes ............................................     1,037,950          1,029,950

Other long-term liabilities ......................................       562,681            786,202
                                                                     -----------        -----------


Commitments and contingencies
Shareholders' equity:
  Common stock, par value $.05 per share; issued and
     outstanding, 10,494,539 and 10,951,281 shares respectively          524,727            547,564
  Additional paid-in capital ..................................       38,774,066         40,129,749
  Retained earnings............................................       16,824,051         14,897,903
                                                                     -----------        -----------
         Total shareholders' equity ..............................    56,122,844         55,575,216
                                                                     -----------        -----------
  Total ..........................................................   $66,912,278        $68,999,827
                                                                     ===========        ===========
</TABLE>


            See accompanying Notes to Condensed Financial Statements.


                                       3

<PAGE>

                             HAWKINS CHEMICAL, INC.
                         CONDENSED STATEMENTS OF INCOME


<TABLE>
<CAPTION>
                                                   Three Months Ended June 30        Nine Months Ended June 30
                                                     2000             1999             2000             1999
                                                 -----------------------------     -----------------------------
                                                          (Unaudited)                       (Unaudited)

<S>                                              <C>              <C>              <C>              <C>         
Net sales ...................................    $ 26,832,838     $ 24,959,934     $ 71,206,581     $ 71,034,944

Cost of sales ...............................     (19,190,913)     (18,353,963)     (53,205,404)     (53,999,756)
                                                 ------------     ------------     ------------     ------------

Gross profit ................................       7,641,925        6,605,971       18,001,177       17,035,188

Selling, general and administrative .........      (3,416,755)      (2,894,343)      (8,719,220)      (7,900,237)

Litigation settlement reimbursement .........              --           97,708               --        2,851,708
                                                 ------------     ------------     ------------     ------------

Income from operations ......................       4,225,170        3,809,336        9,281,957       11,986,659

Other income (deductions):

  Interest income ...........................         256,184          276,843          817,911          826,914
  Interest expense ..........................          (7,498)          (9,211)         (22,604)         (27,656)
  Miscellaneous .............................          51,704           (4,444)          82,573          (28,921)
                                                 ------------     ------------     ------------     ------------

     Total other income (deductions) ........         300,390          263,188          877,880          770,337
                                                 ------------     ------------     ------------     ------------

Income before income taxes ..................       4,525,560        4,072,524       10,159,837       12,756,996

Provision for income taxes ..................      (1,783,100)      (1,631,800)      (4,003,000)      (5,101,300)
                                                 ------------     ------------     ------------     ------------

Net income ..................................    $  2,742,460     $  2,440,724     $  6,156,837     $  7,655,696
                                                 ============     ============     ============     ============


Weighted average number of shares outstanding      10,515,251       10,991,611       10,671,563       11,192,820
                                                 ============     ============     ============     ============


Earnings per share - basic and diluted ......    $       0.26     $       0.22     $       0.58     $       0.68
                                                 ============     ============     ============     ============
</TABLE>



            See accompanying Notes to Condensed Financial Statements.


                                       4

<PAGE>

                             HAWKINS CHEMICAL, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                  NINE MONTHS ENDED JUNE 30
                                                                ----------------------------
                                                                    2000            1999
                                                                -----------     ------------
                                                                        (Unaudited)
<S>                                                             <C>             <C>         
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income................................................    $ 6,156,837     $  7,655,696
  Depreciation and amortization ............................      1,578,699        1,465,723
  Deferred income taxes ....................................         83,000          (12,800)
  Other ....................................................        (82,195)         (79,499)
  Changes in certain current assets and liabilities ........     (1,870,162)       2,415,989
                                                                -----------     ------------
     Net cash provided by operating activities .............      5,866,179       11,445,109
                                                                -----------     ------------

CASH FLOWS FROM INVESTING ACTIVITIES:

  Additions to property, plant and equipment ...............     (5,967,171)      (1,834,620)
  Purchases of investments .................................       (523,204)      (4,593,637)
  Sales of investments .....................................      6,110,867        1,885,814
  Acquisition of St. Mary's Chemicals, Inc. ................     (2,700,000)              --
  Payments received on notes receivable ....................        371,532          357,210
                                                                -----------     ------------
     Net cash used in investing activities .................     (2,707,976)      (4,185,233)
                                                                -----------     ------------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Cash dividends paid .....................................     (3,109,181)      (2,814,622)
   Acquisition and retirement of stock .....................     (4,414,182)      (4,888,288)
   Debt repayment ..........................................        (95,362)         (89,123)
                                                                -----------     ------------
     Net cash used in financing activities .................     (7,618,725)      (7,792,033)
                                                                -----------     ------------


DECREASE IN CASH AND CASH EQUIVALENTS ......................     (4,460,522)        (532,157)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR ...............      4,778,174        3,197,015
                                                                -----------     ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD ...................    $   317,652     $  2,664,858
                                                                ===========     ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

  Cash paid for interest ...................................    $    34,658     $     40,897
                                                                ===========     ============

  Cash paid for income taxes ...............................    $ 4,504,049     $  4,113,666
                                                                ===========     ============
</TABLE>



            See accompanying Notes to Condensed Financial Statements.


                                       5

<PAGE>

                             HAWKINS CHEMICAL, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   The accompanying unaudited condensed financial statements have been
     prepared in accordance with the instructions for Form 10-Q and,
     accordingly, do not include all information and footnotes required by
     generally accepted accounting principles for complete financial statements.
     These statements should be read in conjunction with the financial
     statements and footnotes included in the Company's Annual Report on Form
     10-K for the year ended October 3, 1999, previously filed with the
     Commission. In the opinion of management, the accompanying unaudited
     condensed financial statements contain all adjustments necessary to present
     fairly the Company's financial position and the results of its operations
     and cash flows for the periods presented. All adjustments made to the
     interim financial statements were of a normal recurring nature.

     The accounting policies followed by the Company are set forth in Note 1 to
     the Company's financial statements in the 1999 Hawkins Chemical, Inc.
     Annual Report which is incorporated by reference in the Form 10-K filed
     with the Commission on January 3, 2000.

2.   The results of operations for the period ended June 30, 2000 are not
     necessarily indicative of the results that may be expected for the full
     year.

3.   Inventories, principally valued by the LIFO method, are less than current
     cost by approximately $770,000 at June 30, 2000. Inventory consists
     principally of finished goods. Inventory quantities fluctuate during the
     year. No material amounts of interim liquidation of inventory quantities
     have occurred that are not expected to be replaced by year-end.

4.   During the nine months ended June 30, 2000, the Company acquired and
     retired 532,100 shares of common stock for $4,414,182.

5.   During 1995, the Company had a fire in the office/warehouse of The Lynde
     Company, a former wholly owned subsidiary. The Company's insurers denied
     coverage and refused to defend the lawsuit filed against it as a result of
     the fire. In the first quarter of fiscal 1999, the Company prevailed
     against its insurers to recover the legal and settlement costs in
     connection with the 1995 warehouse fire. Through the nine-month period
     ended June 30, 1999, the company received $2,851,708 of which $97,708 was
     received during the third quarter, which covered substantially all of its
     settlement and legal costs. The Company's results of operations for the
     first nine-months of fiscal 1999 include $2,851,708 associated with the
     settlement. The umbrella insurer has agreed to defend and indemnify the
     Company on remaining claims under the Settlement Agreement up to and in
     accordance with its policy limits of $5,000,000.


                                       6

<PAGE>

6.   On May 26, 2000, the Company completed the acquisition of certain assets of
     St. Mary's Chemicals, Inc. d.b.a. Universal Chemicals. Universal Chemicals,
     a Minnesota-based company, is engaged in the business of marketing,
     selling, and distributing pharmaceutical chemicals to pharmacies and
     pharmacy wholesalers. In connection with the acquisition, assets purchased,
     common stock issued, and cash consideration paid were as follows:


<TABLE>
<S>                                                                     <C>     
          Assets Acquired:
             Inventory                                                  $   36,843
             Equipment                                                      12,692
             Excess of purchase price over
                net assets acquired                                      3,250,465
                                                                        ----------
                                                                         3,300,000
            Common Stock Issued (75,358 shares)                            600,000
                                                                        ----------

            Cash Consideration Paid                                     $2,700,000
                                                                        ==========
</TABLE>


     The acquisition will be accounted for using the purchase method of
     accounting, and the excess of the purchase price over net assets acquired
     is being amortized over 15 years using the straight-line method. The
     operations of Universal Chemicals are included in the Company's statement
     of income beginning on May 26, 2000. The pro forma effect of this
     acquisition on sales, operating income, and earnings per share were not
     significant.

     On May 26, 2000, the Company also entered into a five-year employment
     agreement with one of the previous owners of Universal Chemicals and
     consulting agreements with the other two previous owners of Universal
     Chemicals.

     The employment agreement and consulting agreements contain performance
     bonuses and non-compete provisions. The agreements are based on Universal
     Chemicals' operating results, as defined, for five years after the
     acquisition date and have a maximum payment of $3,520,000. The non-compete
     provisions cover a period of five years after the termination of the
     employment or consulting agreements, and require annual payments of
     $100,000 to $200,000 depending on Universal Chemicals' operating results,
     as defined, for five years after the acquisition date.


                                       7

<PAGE>

7.   The Company has two reportable segments: Industrial and Water Treatment.
     Reportable segments are defined by product and type of customer. Segments
     are responsible for the sales, marketing and development of their products
     and services. The segments do not have separate accounting, administrative,
     customer service or purchasing functions. The information for 1999 has been
     restated to conform to the 2000 presentation.


<TABLE>
<CAPTION>
REPORTABLE SEGMENTS                INDUSTRIAL    WATER TREATMENT       TOTAL

<S>                               <C>              <C>              <C>        
THREE MONTHS ENDED JUNE 30, 2000
  Net sales ................      $17,804,687      $ 9,028,151      $26,832,838
  Gross profit .............        4,711,194        2,930,731        7,641,925
  Operating income .........        2,548,908        1,676,262        4,225,170

THREE MONTHS ENDED JUNE 30, 1999
  Net sales ................      $16,999,262      $ 7,960,672      $24,959,934
  Gross profit .............        4,069,095        2,536,876        6,605,971
  Operating income .........        2,203,302        1,508,326        3,711,628

NINE MONTHS ENDED JUNE 30, 2000
  Net sales ................      $49,570,772      $21,635,809      $71,206,581
  Gross profit .............       11,155,798        6,845,379       18,001,177
  Operating income .........        5,459,111        3,822,846        9,281,957

NINE MONTHS ENDED JUNE 30, 1999
  Net sales ................      $50,610,887      $20,424,057      $71,034,944
  Gross profit .............       10,743,853        6,291,335       17,035,188
  Operating income .........        5,562,446        3,572,505        9,134,951
</TABLE>



PROFIT RECONCILIATION


<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,                            2000             1999

<S>                                                 <C>             <C>        
Total income for reportable segments...........     $4,225,170      $ 3,711,628
Unallocated corporate income ..................             --           97,708
                                                    ----------      -----------

Total operating income ........................     $4,225,170      $ 3,809,336
                                                    ==========      ===========


NINE MONTHS ENDED JUNE 30,                             2000             1999

Total income for reportable segments...........     $9,281,957      $ 9,134,951
Unallocated corporate income ..................             --        2,851,708
                                                    ----------      -----------

Total operating income ........................     $9,281,957      $11,986,659
                                                    ==========      ===========
</TABLE>



                                       8

<PAGE>


I
TEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

THE INFORMATION CONTAINED IN THIS FORM 10-Q INCLUDES FORWARD-LOOKING STATEMENTS
AS DEFINED IN SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
FORWARD-LOOKING INFORMATION OR STATEMENTS INCLUDE STATEMENTS ABOUT THE FUTURE OF
THE INDUSTRIES REPRESENTED BY OUR OPERATING GROUPS, STATEMENTS ABOUT OUR FUTURE
BUSINESS PLANS AND STRATEGIES, THE TIMELINESS OF PRODUCT INTRODUCTIONS AND
DELIVERIES, EXPECTATIONS ABOUT INDUSTRY AND MARKET GROWTH DEVELOPMENTS,
EXPECTATIONS ABOUT OUR GROWTH AND PROFITABILITY AND OTHER STATEMENTS THAT ARE
NOT HISTORICAL IN NATURE. MANY OF THESE STATEMENTS CONTAIN WORDS SUCH AS "MAY,"
"WILL," "BELIEVE," "INTEND," "ESTIMATE," OR "CONTINUE" OR OTHER SIMILAR WORDS.

THESE FORWARD-LOOKING STATEMENTS INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES,
INCLUDING DEMAND FROM MAJOR CUSTOMERS, COMPETITION, CHANGES IN PRODUCT OR
CUSTOMER MIX OR REVENUES, CHANGES IN PRODUCT COSTS AND OPERATING EXPENSES AND
OTHER FACTORS DISCLOSED THROUGHOUT THIS REPORT. THE ACTUAL RESULTS THAT THE
COMPANY ACHIEVES MAY DIFFER MATERIALLY FROM ANY FORWARD-LOOKING STATEMENTS DUE
TO SUCH RISKS AND UNCERTAINTIES. THE COMPANY UNDERTAKES NO OBLIGATION TO REVISE
ANY FORWARD-LOOKING STATEMENTS IN ORDER TO REFLECT EVENTS OR CIRCUMSTANCES THAT
MAY ARISE AFTER THE DATE OF THIS REPORT. READERS ARE URGED TO CAREFULLY REVIEW
AND CONSIDER THE VARIOUS DISCLOSURES MADE BY THE COMPANY IN THIS REPORT AND IN
THE COMPANY'S OTHER REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
THAT ATTEMPT TO ADVISE INTERESTED PARTIES OF THE RISKS AND UNCERTAINTIES THAT
MAY AFFECT THE COMPANY'S FINANCIAL CONDITION, RESULTS OF OPERATIONS, AND CASH
FLOWS, PARTICULARLY THE COMPANY'S ANNUAL REPORT ON FORM 10-K, FILED WITH THE
COMMISSION.

CONTINUING OPERATIONS

Net sales increased $1,872,904, or 7.5%, in the third quarter of this fiscal
year, and $171,637, or .2%, in the first nine months of this fiscal year as
compared to the comparable periods in fiscal 1999. The Industrial segment sales
increased $805,425 in the third quarter of this fiscal year as compared to the
third quarter of fiscal 1999 and decreased $1,040,115 in the first nine months
of fiscal 2000 as compared to the first nine months of fiscal 1999. The third
quarter increase was mainly attributable to volume increases in certain product
lines. The nine-month decrease is mainly attributable to selling price decreases
of a single, large-volume product (caustic soda), although the decrease was
partially offset by increased volumes in other product lines. The Water
Treatment segment sales increased $1,067,479 in the third quarter of this fiscal
year as compared to the third quarter of fiscal 1999 and increased $1,211,752 in
the first nine months of fiscal 2000 as compared to the first nine months of
fiscal 1999. These increases are due mainly to increased sales volumes.

Gross margin, as a percentage of net sales, for the third quarter of fiscal 2000
was 28.5% compared to 26.5% for the third quarter of fiscal 1999, and was 25.3%
for the first nine months of fiscal 2000 compared to 24.0% for the first nine
months of fiscal 1999. For the Industrial segment, gross margin, as a percentage
of sales, was 26.5% for the third quarter of fiscal 2000 compared to 23.9% for
the third quarter of fiscal 1999 and 22.5% for the first nine months of this
fiscal year compared to 21.2% for the first nine months of fiscal 1999. The
Industrial segment's increases are mainly due to decreases in both the selling
price and cost of caustic soda compared to the prior periods. The demand for
this product does not fluctuate materially as the cost and selling price
increases or decreases. The Company has generally been able to, and expects to
continue to be able to, adjust its selling prices as the cost of materials and
other expenses change, thereby maintaining relatively stable dollar gross
margins. Gross margin, as a


                                       9

<PAGE>

percentage of sales, for the Water Treatment segment was 32.5% for the third
quarter ended June 30, 2000 compared to 31.9% for the third quarter of fiscal
1999 and 31.6% for the nine-month period ended June 30, 2000 compared to 30.8%
for the nine-month period of fiscal 1999. These increases are due to increased
sales volume of certain products with higher profit margins and to selling price
increases in various product lines.

Selling, general and administrative expenses as a percentage of net sales for
the third quarter of fiscal 2000 were 12.7% compared to 11.6% for the third
quarter of fiscal 1999, and 12.2% for the first nine months of fiscal 2000
compared to 11.1% for the first nine months of fiscal 1999. Stated as a
percentage of the same period one year ago, the third quarter increase in such
expenses was 18.0%, or $522,412, and the nine-month increase was 10.4%, or
$818,983. These increases were mainly due to increases in the sales and
administrative staff, consulting fees, and to employee compensation and benefit
costs. Most of the remaining expenses vary only slightly with fluctuations in
sales.

Income from operations increased by $415,834, or 10.9%, in the third quarter of
fiscal 2000, and decreased $2,704,702, or 22.6%, in the first nine months of
fiscal 2000 compared to the comparable periods of fiscal 1999. The third quarter
increase is primarily due to an increase in gross margin resulting from a
decrease in materials costs. The nine-month decrease is primarily attributable
to the $2,851,708 recovery during fiscal 1999 from the Company's insurers in
connection with the 1995 fire at the Lynde Company, a former wholly owned
subsidiary. This insurance recovery covers substantially all of the related
settlement and legal costs previously incurred in the periods prior to the
payment.

OTHER INCOME

Interest income decreased $20,659 in the third quarter of fiscal 2000 compared
to the same quarter one year ago and $9,003 for the first nine months of this
fiscal year compared to the same nine-month period one year ago. These decreases
are mainly due to less cash available for investment. Interest expense decreased
slightly in the third quarter and the first nine months of fiscal 2000 compared
to the same periods one year ago due to the decline in the amount of long-term
debt outstanding. Other miscellaneous income (deductions) increased $56,148 for
the second quarter and $111,494 for the nine-month periods ended June 30, 2000
compared to the same periods one year ago, due mainly to gains on disposals of
fixed assets.

LIQUIDITY AND CAPITAL RESOURCES

For the nine-month period ended June 30, 2000, cash provided by operations was
$5,866,179 compared to $11,445,109 for the same period one-year ago. This
decrease was due mainly to the decrease in net income and to changes in certain
current asset and liability accounts discussed in the next paragraph below. The
decrease in net income is primarily due to the $2,851,708 recovery received in
fiscal 1999 from the Company's insurers in connection with the 1995 fire at the
Lynde Company, a former wholly owned subsidiary of the company. During the nine
months ended June 30, 2000, the Company invested $5,967,171 in property and
equipment additions, which included approximately $3,450,000 for a new building
being constructed in St. Paul, Minnesota that will be occupied by both the
Industrial and Water Treatment segments.

Accounts receivable increased due to the increase in sales for the quarter.
Inventories increased due to increased quantities of caustic soda, food grade
chemicals, and pharmaceutical chemicals. Other current assets decreased during
the first nine months of fiscal 2000 due to prepayments that existed at October
3, 1999 and are currently being expensed. Other current liabilities decreased as
a result of the payment of benefit plan accruals that existed at fiscal year
end. The Company did not issue any securities during the


                                       10

<PAGE>

nine-month period ended June 30, 2000, except that 75,358 shares were issued in
connection with the acquisition of St. Mary's Chemicals on May 26, 2000.

Through open market purchases, the Company acquired and retired 132,700 shares
of common stock for $1,085,008 during the quarter ended June 30, 2000. For the
nine-month period ending June 30, 2000, 532,100 shares of common stock, at a
cost of $4,414,182, have been acquired and retired.

Cash flows from operations, coupled with the Company's strong cash position,
puts the Company in a position to fund both short and long-term working capital
and capital investment needs with internally generated funds. Management does
not, therefore, anticipate the need to engage in significant financing
activities in either the short or long-term. If the need to obtain additional
capital does arise, however, management is confident that the Company's total
debt to capital ratio puts it in a position to issue debt on favorable terms.

On May 26, 2000, the Company completed the acquisition of certain assets of St.
Mary's Chemicals, Inc. d.b.a. Universal Chemicals. Universal Chemicals, a
Minnesota-based company, is engaged in the business of marketing, selling, and
distributing pharmaceutical chemicals to pharmacies and pharmacy wholesalers. In
connection with the acquisition, assets purchased, common stock issued, and cash
consideration paid were as follows:


<TABLE>
<S>                                              <C>      
     Assets Acquired:
        Inventory                                  $ 36,843
        Equipment                                    12,692
        Excess of purchase price over
           net assets acquired                    3,250,465
                                                 ----------
                                                  3,300,000
     Common Stock Issued (75,358 shares)            600,000
                                                 ----------

     Cash Consideration Paid                     $2,700,000
                                                 ==========
</TABLE>


The acquisition will be accounted for using the purchase method of accounting,
and the excess of the purchase price over net assets acquired is being amortized
over 15 years using the straight-line method. The operations of Universal
Chemicals are included in the Company's statement of income beginning on May 26,
2000. The pro forma effect of this acquisition on sales, operating income, and
earnings per share were not significant.

On May 26, 2000, the Company also entered into a five-year employment agreement
with one of the previous owners of Universal Chemicals and consulting agreements
with the other two previous owners of Universal Chemicals.

The employment agreement and consulting agreements contain performance bonuses
and non-compete provisions. The agreements are based on Universal Chemicals'
operating results, as defined, for five years after the acquisition date and
have a maximum payment of $3,520,000. The non-compete provisions cover a period
of five years after the termination of the employment or consulting agreements,
and require annual payments of $100,000 to $200,000 depending on Universal
Chemicals' operating results, as defined, for five years after the acquisition
date.

Although management continually reviews opportunities to enhance the value of
the Company through strategic acquisitions, other capital investments and
strategic divestitures, no material commitments for such investments or
divestitures currently exist. Until appropriate investment opportunities are
identified, the Company will continue to invest excess cash in conservative
investments. Cash equivalents include


                                       11

<PAGE>

all liquid debt instruments (primarily cash funds and certificates of deposit)
purchased with an original maturity of three months or less. Cash equivalents
are carried at cost, which approximates market value. Investments classified as
available-for-sale securities consist of insurance contracts and variable rate
marketable securities (primarily municipal bonds and annuity contracts) that
will be held for indefinite periods of time, including securities that may be
sold in response to changes in market interest or prepayment rates, needs for
liquidity or changes in the availability or yield of alternative investments.
These securities are carried at market value, which approximates cost.

Other than as discussed above, management is not aware of any matters that have
materially affected the first nine months of fiscal 2000, or are expected to
materially affect future periods, nor is management aware of other matters not
affecting this period that are expected to materially affect future periods.

MARKET RISK

At June 30, 2000, the Company had an investment portfolio of fixed income
securities of approximately $1,606,643, excluding $12,573,916 of those
classified as cash and cash equivalents and variable rate securities. These
securities, like all fixed income instruments, are subject to interest rate risk
and will decline in value if market interest rates increase. However, the
Company has the ability to hold its fixed income investments until maturity and
therefore the Company would not expect to recognize an adverse impact in income
or cash flows.


                                       12

<PAGE>

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board (FASB) issued 
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for 
Derivative Instruments and Hedging Activities." SFAS No. 133 requires 
companies to record derivatives on the balance sheet as assets and 
liabilities, measured at fair value. Gains or losses resulting from changes 
in the values of those derivatives would be accounted for depending on the 
use of the derivative and whether it qualifies for hedge accounting. In July 
1999, the FASB issued SFAS No. 137 delaying the effective date of SFAS No. 
133 for one year to fiscal years beginning after June 15, 2000, with earlier 
adoption encouraged. Management has not yet determined the effects SFAS No. 
133 will have on its financial position or the results of its operations. The 
Company will be required to adopt SFAS No. 133 in fiscal 2001.

In December 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin ("SAB") No. 101 that provides the staff's views in applying
generally accepted accounting principles to selected revenue recognitions
issues. Companies are required to modify their revenue recognition policy to
comply with SAB No. 101 by December 31, 2000. Management has not yet determined
the effects SAB No. 101 will have on the Company's financial position or the
results of its operations.



 
                          PART II. OTHER INFORMATION


Item 1.  Legal Proceedings

As of the date of this filing, the Registrant was not involved in any pending
legal proceedings other than ordinary routine litigation incidental to their
business, except as follows:

     LYNDE COMPANY WAREHOUSE FIRE. The settlement agreement (the "Settlement
     Agreement") relating to the class action, DONNA M. COOKSEY, ET AL. V.
     HAWKINS CHEMICAL, INC. AND THE LYNDE COMPANY ("Cooksey"), brought in March
     1995 against the Company and its former subsidiary, for damages alleged to
     be caused by a fire at an office/warehouse facility used by the former
     subsidiary, was approved by the court on January 30, 1998. Pursuant to the
     Settlement Agreement, the Company agreed to pay certain of the plaintiffs'
     costs and expenses as well as certain compensation to the class. In October
     1998 the Company obtained a judgment against its primary and umbrella
     insurers obligating both insurers to defend the Company in connection with
     the Cooksey lawsuit. The two insurers subsequently settled with the Company
     by reimbursing it $2,754,000 for substantially all amounts incurred in
     defending and settling the Cooksey action. Less than 10 claimants remain
     who have not yet resolved their claims under the Settlement Agreement. The
     Registrant anticipates that the defense and payment of these remaining
     claims, which are subject to arbitration, will be covered by its umbrella
     insurer.


                                       13

<PAGE>


Item 2.  Change in Securities and Use of Proceeds

     On May 26, 2000 in connection with the acquisition of substantially all of
     the assets of St. Mary's Chemicals, Inc., 75,358 shares of common stock
     were issued to St. Mary's Chemicals, Inc., at a value of $600,000 based on
     the weighted average closing price of such shares as listed on the NASDAQ
     National Market System for the twenty trading days ending five trading days
     before the closing date. Since it was a privately negotiated sale, the
     issuance of the securities was exempt from Section 4(2) of the Securities
     Act of 1933.


Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits.

     The following exhibits are included with this Quarterly Report on Form 10-Q
     (or incorporated by reference) as required by Item 601 of Regulation S-K.



<TABLE>
<CAPTION>
          Exhibit No.                     Description of Exhibit
         -------------       ---------------------------------------------------
<S>                          <C> 
             10.1             Asset purchase agreement dated May 26, 2000 among 
                              St. Mary's Chemicals, Inc., its shareholders, and 
                              registrant

              27              Financial Data Schedule
</TABLE>


(b)  Reports on Form 8-K.

     No reports on Form 8-K have been filed during the fiscal quarter ended 
     JUNE 30, 2000.



                                    SIGNATURE

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

                                                 HAWKINS CHEMICAL, INC.

                                    BY  /s/  Marvin E. Dee                  
                                        ---------------------------------------
                                        Marvin E. Dee, Vice President, Chief
                                        Financial Officer, Secretary, Treasurer

Dated:  August 8, 2000


                                       14

<PAGE>


                                  EXHIBIT INDEX

The following exhibits are included with this Quarterly Report on Form 10-Q (or
incorporated by reference) as required by Item 601 of Regulation S-K.


<TABLE>
<CAPTION>
                                                                                       Page
          Exhibit No.                     Description of Exhibit                        No.
         -------------       ---------------------------------------------------      ------
<S>                           <C>                                                      <C>
             10.1             Asset purchase agreement dated May 26, 2000 among        16-35
                              St. Mary's Chemicals, Inc., its shareholders, and 
                              registrant

              27              Financial Data Schedule                                  36
</TABLE>



                                       15





<PAGE>

                            ASSET PURCHASE AGREEMENT

                                  BY AND AMONG

                     ST. MARY'S CHEMICALS, INC., ("SELLER")

                PATRICK L. SODERLUND, WILLIAM A. SODERLUND, JR.,
                      AND RONALD W. WELCH ("SHAREHOLDERS")

                                       AND

                        HAWKINS CHEMICAL, INC. ("BUYER")

                               DATED: MAY 9, 2000




<PAGE>



                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                            PAGE
<S>                                                                         <C>
 1.  TRANSFER OF ASSETS; ASSUMPTION OF LIABILITIES ........................    1

 2.  PURCHASE PRICE AND PAYMENT ...........................................    3

 3.  CLOSING ..............................................................    4

 4.  REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDERS ............    4

 5.  REPRESENTATIONS AND WARRANTIES OF BUYER ..............................    8

 6.  COVENANTS OF SELLER AND SHAREHOLDERS .................................    8

 7.  CONDITIONS TO THE OBLIGATIONS OF BUYER ...............................   10

 8.  CONDITIONS TO THE OBLIGATIONS OF SELLER ..............................   12

 9.  INDEMNIFICATION ......................................................   13

10.  NON-COMPETITION; NON-SOLICITATION; CONFIDENTIALITY....................   14

11.  CHANGE OF NAME .......................................................   15

12.  MISCELLANEOUS ........................................................   15
</TABLE>


(Schedules and Exhibits Omitted)


<PAGE>

                                 ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT (The "Agreement") is made and entered into as
of May 9, 2000, by and among St. Mary's Chemicals, Inc., a Minnesota corporation
("Seller"), Patrick L. Soderlund and William A. Soderlund, Jr. and Ronald W.
Welch, the shareholders of Seller ("Shareholders"), and Hawkins Chemical, Inc.,
a Minnesota corporation ("Buyer");

     WITNESSETH:

     WHEREAS, Seller (also doing business as "Universal Chemical") is engaged in
the business of marketing, selling and distributing
 pharmaceutical chemicals to
pharmacies and pharmacy wholesalers (herein, the "Business"); and

     WHEREAS, Seller desires to sell and transfer certain of the operating
assets and intangible assets of the Business to Buyer and Buyer desires to
purchase and acquire such assets in accordance with the terms set forth herein;
and

     WHEREAS, Shareholders are all the shareholders of Seller and shall benefit
from the sale of the assets of the Business;

     NOW, THEREFORE, in consideration of the foregoing recitals, the covenants
and agreements contained herein, including but not limited to the payments
herein described, and other good and valuable consideration, the parties agree
as follows:

1.   TRANSFER OF ASSETS; ASSUMPTION OF LIABILITIES

     1.1 PURCHASE OF ASSETS FROM SELLER. Subject to the terms and conditions
stated in this Agreement, on the Closing Date (as defined in Section 3), Seller
shall convey, transfer and deliver to Buyer and Buyer shall purchase and acquire
from Seller the following assets of Seller (the "Purchased Assets"):

     (a)  TANGIBLE PERSONAL PROPERTY. The equipment, furniture and fixtures set
          forth on Schedule 1.1(a) attached hereto.

     (b)  MATERIALS AND SUPPLIES. All office and other miscellaneous supplies,
          spare parts, tools, all artwork, advertising and promotional materials
          and other tangible personal property of every kind and description
          used in the Business.

     (c)  INVENTORIES. All inventories of the Business as of the Closing Date.

     (d)  CUSTOMERS. All lists and records related to the customers of the
          Business, including lists of Seller's present and previous customers,
          existing lead data and marketing database information; all records
          relating to cash deposits and prepayments made to




<PAGE>

          Seller under any agreements by Seller to provide products or services
          which have not yet been provided; all contract rights of Seller
          existing under contracts, agreements and arrangements with customers
          related to the Business, including the contracts set forth on 
          Schedule 4.10 attached hereto (such Schedule shall specify those
          contracts the assignment of which requires the consent of any third
          party).

     (e)  TRADEMARKS, NAMES, ETC. All registered and unregistered trademarks, 
          service marks, corporate name, trade names, trade dress and all other
          trademark rights of the Business, including, specifically, all rights 
          to the names "St. Mary's Chemicals" and "Universal Chemicals."

     (f)  FILES AND RECORDS. All files, invoices, customer lists, records and
          accounts pertaining to customers (present, past and potential), all
          supplier lists, all records pertaining to suppliers, books of account,
          files and ledgers, and other records relating to the Business, except
          for Seller's corporate record books and income tax records.

     (g)  GOODWILL. All goodwill of the Business and other intangible property.

     1.2 RETAINED LIABILITIES. Except for any customer contracts which are
expressly assumed by Buyer hereunder pursuant to Section 4.10, Buyer assumes no
liability or obligation of Seller whatsoever and Seller retains all such
liabilities and obligations.

     1.3 EMPLOYEE BENEFIT PLANS. Buyer shall not be obligated to assume or to
continue any employee benefit plan or other arrangement maintained by Seller for
the benefit of its present or former employees, nor shall Buyer have any
responsibility, obligation or liability under any such employee benefit plan or
arrangement. Seller shall be solely responsible for all employer liabilities
under all such plans or arrangements.

     1.4 TAX REPORTING. Buyer and Seller will report the federal, state and
local income and other tax consequences of the purchase and sale contemplated
hereby in a manner consistent with the allocation of the Purchase Price set
forth on the Purchase Price Allocation Schedule attached hereto as Schedule 1.5,
and will file IRS Form 8594 on a basis consistent with such allocation, and
neither party will take any position inconsistent therewith upon examination of
any tax return, in any refund claim, in any litigation, or otherwise.

     1.5 EXCLUDED ITEMS. Schedule 1.5 lists four technology items which are not
included in Purchased Assets. Seller may not sell or transfer such technology to
any other party except upon the default by Buyer in exercising a first right of
refusal to each of such items. The term of the first right of refusal shall be
for five years from the Closing Date hereunder. In each instance, Seller shall
give Buyer written notice that it has an offer from another party to acquire
rights to all or part of or a license for such technology, such notice to
contain the complete terms and conditions of such offer, including the name of
the party. Buyer shall have sixty (60) days from receipt of written notice from
Seller to exercise its rights hereunder by written notice delivered to Seller,
and upon such exercise the parties shall proceed in good faith to execute a
definitive purchase agreement and to close the same.


                                       -2-


<PAGE>


     If Buyer fails to exercise a first right of refusal within the sixty (60)
day period, such first right of refusal shall lapse, and the Seller may proceed
with such proposed sale to the third party.

2. PURCHASE PRICE AND PAYMENT

     2.1 PURCHASE PRICE. The total purchase price to be paid by Buyer to Seller
for the Purchased Assets shall be (i) $3,300,000 plus or minus (ii) the
difference between the Closing Date Net Asset Value and the Balance Sheet Net
Asset Value (each as defined in Section 2.2).

     2.2 CLOSING DATE BALANCE SHEET. As soon as practicable after the Closing
Date, but in any event no later than 60 days thereafter, Seller shall prepare
Seller's balance sheet as at the Closing Date (the "Closing Date Balance
Sheet"), which shall be prepared on the same basis as the Balance Sheet of the
Business for the period ending November 30, 1999 attached hereto as Schedule 2.2
(the "1999 Balance Sheet"). Based upon the applicable Balance sheet, Seller
shall also determine the book value of the Purchased Assets, net of depreciation
and amortization (the "Net Asset Value"), as of December 31, 1999 and the
Closing Date. The Closing Date Balance Sheet shall be prepared by Seller's
accountants based upon a physical inventory taken beginning at 7:00 a.m. on the
Closing Date. The taking of such inventory may be observed by Buyer and Buyer's
accountants. Seller's accountants shall issue a report to be attached to the
Closing Date Balance Sheet. Buyer shall have the right to review all work papers
prepared by Seller and Seller's accountants in connection with the Closing Date
Balance Sheet.

     2.3 PAYMENT OF PURCHASE PRICE. At Closing, Buyer will pay Seller the 
purchase price of $3,300,000 as follows: (a) $2,700,000 by wire transfer or 
certified check and (b) $600,000 through the issuance of shares of common 
stock of Buyer; the number of such shares to be determined based on the 
weighted average closing price of such shares as listed on the NASDAQ 
National Market System for the twenty trading days ending five trading days 
before the Closing Date. Upon acceptance by Buyer of the Closing Date Balance 
Sheet or the settlement of any disputes related thereto pursuant to Section 
2.4, if the Closing Date Net Asset Value is less than the 1999 Balance Sheet 
Net Asset Value, then Seller shall pay the difference to Buyer by wire 
transfer of immediately available funds to an account designated by Buyer. If 
the Closing Date Net Asset Value is greater than the 1999 Balance Sheet Net 
Asset Value, Buyer shall pay the difference by wire transfer of immediately 
available funds to an account designated by Seller. Any balance due Seller or 
refund due Buyer shall be paid within thirty-five (35) days after delivery of 
the Closing Date Balance Sheet, or in the event of a dispute related thereto, 
within five (5) days after final determination of the dispute pursuant to 
Section 2.4.

     2.4 DISPUTES. Within 30 days after receipt of the final draft of the
Closing Date Balance Sheet, Buyer shall either inform Seller in writing that the
Closing Date Balance Sheet is acceptable or object thereto in writing, setting
forth a specific description of each of its objections. If the Buyer so objects,
any such objection that the Buyer and Seller cannot resolve within 30 days from
the date Buyer notifies the Seller of any such objection shall be referred to
KPMG Peat Marwick LLP (the "Referral Firm") for final determination, which final
determination shall be made by the Referral Firm on or before 30 days after
referral. The final determination of the adjustments to the Closing Date Balance
Sheet and the calculation of the Closing Date Net Asset Value of Seller made by
the


                                      -3-

<PAGE>

Referral Firm shall be conclusive and binding upon the Buyer and Seller. In
resolving any disputed items, the Referral Firm (i) shall be bound by the
provisions of this Section 2 and (ii) may not assign a value to any item
greater than the greatest value claimed for such item by either Buyer or Seller
or less than the smallest value for such item claimed by either party. The Buyer
shall pay the fees and disbursements of the Buyer's Accountants. Seller shall
pay the fees and disbursements of Seller's Accountants. The fees and
disbursements, if any, of the Referral Firm shall be paid one-half by the Buyer
and one-half by the Seller, unless the Referral Firm determines that the fees
should be borne unequally.

3. CLOSING

     The closing of the transactions contemplated by this Agreement (the
"Closing") shall be held in the offices of Henson & Efron. P.A., at 10:00 a.m.
local time on May 31, 2000, or at such other time and place as shall be mutually
agreed upon by the parties (the "Closing Date"). At the Closing, each party
shall execute and deliver to the other party such instruments of conveyance or
assumption as may be required by this Agreement and which shall be in form and
substance satisfactory to the other party and its counsel.

4. REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDERS

     Seller and Shareholders, jointly and severally, represent and warrant as
follows:

     4.1 ORGANIZATION. Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Minnesota. Seller has all
requisite corporate power and authority to carry on its business as presently
conducted and is qualified to do business and is in good standing as a foreign
corporation in all states in which qualification is required by the nature of
the Business and in which the failure to so qualify would have a material
adverse effect on the Business, all of which states are listed on Schedule 4.1
hereto. Seller has full corporate power to carry on the Business as it is now
being conducted, to own and operate the Purchased Assets, and to enter into and
complete the transactions contemplated by this Agreement.

     4.2 AUTHORIZATION. All corporate actions and proceedings necessary to be
taken by or on the part of Seller and its shareholders to authorize and approve
the transactions contemplated by this Agreement and the agreements, instruments
and documents to be delivered by Seller pursuant hereto and necessary to make
the same effective have been duly and validly taken, and the execution, delivery
and performance of this Agreement has been duly and validly authorized, executed
and delivered by Seller and its shareholders. This Agreement constitutes a valid
and binding agreement, enforceable in accordance with and subject to its terms,
except as limited by (a) bankruptcy, reorganization, insolvency and other laws
affecting the enforcement of creditors' rights or contractual obligations
generally and (b) general principles of equity (whether the enforceability of
this Agreement is considered in a proceeding in equity or at law).

     4.3 NO VIOLATION. Except as set forth in Schedule 4.3 hereto, the
execution, delivery and performance by Seller of this Agreement and the
consummation by Seller of the transactions

                                       -4-


<PAGE>

contemplated hereby does not and will not constitute a violation of or conflict
with, require the payment of any penalty under or result in any breach of or any
default under, the terms, conditions or provisions of any judgment, law,
regulation, license or decree to which Seller or the Purchased Assets are
subject, or of Seller's Articles of Incorporation or bylaws, or of any agreement
or instrument to which Seller is a party or by which it is bound, or result in
the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever on any of the Purchased Assets, other than as specifically permitted
by this Agreement or on any instrument delivered or executed in connection
herewith.

     4.4 FINANCIAL STATEMENTS. Seller has delivered to Buyer true and complete
copies of the compiled financial statements of Seller as of and for the fiscal
years ended in December 31, 1997, 1998, and 1999 and the Balance Sheet and
statement of operations for the periods then ended. All such financial
statements are accurate and complete and present fairly as of such dates: (i)
the financial position of the Business in accordance with the books and records
regularly maintained by Seller for the Business, (ii) the assets and liabilities
of the Business as at the respective dates, and (iii) the revenues and expenses
of the Business for the fiscal periods ended on such dates.

     4.5 TAXES. Seller is a Subchapter S corporation for which a valid election
under Section 1362 of the Code was filed. Seller has not had its status as a
Subchapter S corporation revoked or terminated, and neither Seller nor any
shareholder has acted or failed to act so as to cause such revocation or
termination. Seller has properly and accurately completed and duly filed in
correct form with the appropriate United States, state and local governmental
agencies, all tax returns and reports required to be filed; such returns and
reports are accurate and complete; and Seller has paid in full or made adequate
provisions in its financial statements for all taxes, interest, penalties,
assessments, or deficiencies shown to be due on such tax returns and reports or
claimed to be due by any taxing authority or otherwise due and owing, including,
without limitation, those due in respect of properties, income, franchises,
licenses, sales and payrolls. Seller has made all payments and all withholdings
of tax required to be made under all applicable United States, state and local
tax regulations. Seller has not executed or filed with the Internal Revenue
Service or any other taxing authority, domestic or foreign, any agreement or
other document extending, or having the effect of extending, the period for
assessment or collection of any taxes.

     Seller is not a party to any pending action or proceeding, nor to the best
knowledge of Seller is any such action or proceeding threatened, by any
governmental authority for assessment or collection of taxes, and no claim for
assessment or collection of taxes has been asserted against Seller, nor has
Seller been notified by any governmental authority that an audit or review of
any tax matter is contemplated. There are no tax liens (other than liens for
taxes for current and subsequent years which are not yet due and delinquent)
upon any properties or assets of Seller, whether real, personal or fixed,
tangible or intangible.

     4.6 BUSINESS SINCE THE BALANCE SHEET DATE. For purposes of this Agreement,
the term "Balance Sheet Date" shall mean November 30, 1999 and Seller's balance
sheet as of such date shall be referred to as the "Balance Sheet." From the
Balance Sheet Date through the date of this Agreement, the Business has been
conducted in the ordinary course and in substantially the same manner as it was
before the Balance Sheet Date. Since the Balance Sheet Date, there has been no
material adverse change in the business, financial condition, operating results,
assets, customer or


                                       -5-


<PAGE>

supplier relations or the business prospects of Seller, (financial or otherwise)
or results of operations of the Business, except as disclosed on Schedule 4.6.

     4.7 INSTRUMENTS OF CONVEYANCE; GOOD TITLE. Seller holds good and marketable
title to the Purchased Assets, free and clear of all liens, encumbrances,
licenses, leases, claims or liabilities. The instruments to be executed by
Seller and delivered to Buyer at the Closing, conveying the Purchased Assets to
Buyer, will transfer good and marketable title to the Purchased Assets, free and
clear of all liens, encumbrances, licenses, leases, claims or liabilities.

     4.8 CONDITION AND ADEQUACY OF ASSETS. The Purchased Assets are all assets
used in or necessary and sufficient for the operation of the Business in the
manner heretofore conducted. The tangible assets included in the Purchased
Assets are in good operating condition and repair, reasonable wear and tear in
ordinary usage excepted, and are adequate and suitable for the purposes for
which they are currently used and intended to be used.

     4.9 INVENTORY. The inventory reflected on the Balance Sheet was determined
in accordance with generally accepted accounting principles on a first in,
first out basis, consistently applied. Such inventory is good and merchantable
and of a quantity and quality presently usable or salable in the ordinary course
of business and, with respect to valuation thereof, adequate provision has been
made for obsolete, slow moving, irregular and damaged items. Since the Balance
Sheet Date, Seller has maintained its inventory in substantially the same manner
as it was maintained before the Balance Sheet Date. Seller is not under any
liability or obligation with respect to the return of inventory or merchandise
in the possession of wholesalers, retailers or other customers.

     4.10 CONTRACTS. Seller has disclosed to Buyer all agreements, leases,
contracts and commitments, written or oral, to which Seller is a party or by
which it is bound and which are material to the operation of the Business; such
material contracts are listed on Schedule 4.10 hereto. Seller has performed all
obligations required to be performed by it to date under such leases,
agreements, contracts and commitments, and is not in default in any respect,
under any of the leases, agreements, contracts, or other commitments to which
Seller is a party or by which it is bound.

     4.11 EMPLOYEE RELATIONS. Seller is not a party to any collective bargaining
agreement or contract with any other entity pertaining to the Business. There
are no threats of work stoppage or pending grievances or claims by any
employees, and there are no labor disputes or proceedings pending or, to the
best knowledge of Seller, threatened between Seller and any of its employees.

     4.12 EMPLOYEE BENEFIT PLANS. The Seller does not maintain, participate in
or contribute to (and has not at any time maintained, participated in or
contributed to or had an obligation to contribute to) any defined benefit plan
(within the meaning of Section 3(35) of ERISA) or to any multiemployer plan
(within the meaning of Section 3(37) of ERISA). The Business does not sponsor or
participate in any plan or arrangement, whether qualified or unqualified,
providing for either shutdown benefits or post-employment medical or life
insurance benefits. Seller has been and is presently in compliance, in all
respects, with all of the requirements of Section 4980B of the Internal Revenue
Code of 1986, as amended (the "Code").


     4.13 ENVIRONMENTAL MATTERS. The term "Hazardous Substance" shall include
petroleum


                                      -6-


<PAGE>


products and any substance (including waste) which now or hereafter is 
determined by any agency or court to be a hazardous or toxic substance 
regulated under any law applicable to: (i) the existence, cleanup and/or 
remedy of contamination on property; (ii) the protection of the environment 
from spilled, deposited or otherwise emplaced contamination; (iii) the 
control of hazardous or toxic wastes or (iv) the use, generation, transport, 
treatment, removal or recovery of hazardous or toxic materials. With respect 
to its conduct of the Business, Seller is in compliance with and has not 
violated any applicable federal, state, county or local statutes, laws, 
regulations, rules, ordinances, codes, licenses and permits relating to 
environmental matters, including by way of illustration and not by way of 
limitation (i) the Clean Air Act, the Clean Water Act, the Federal Water 
Pollution Control Act of 1972, the Resource Conservation and Recovery Act of 
1976, the Comprehensive Environmental Response, Compensation and Liability 
Act of 1980, the Toxic Substances Control Act (and any amendments or 
extensions of any of them), and (ii) all other applicable environmental 
requirements.

     4.14 BROKER. There is no broker or finder or other person who would have
any valid claim against any of the parties to this Agreement for a commission or
brokerage fee in connection with this Agreement or the transactions contemplated
hereby as a result of any agreement, understanding or action by Seller.

     4.15 CONSENTS. Except as set forth in Schedule 4.15, the execution, 
delivery and performance of this Agreement by Seller and the consummation of 
the transactions contemplated hereby will not require the consent, approval 
or authorization of or filing with any person, corporation, partnership, 
joint venture or other business association or court or other governmental 
authority or public entity, including, without limitation, with respect to 
the contracts listed on Schedule 4.15.

     4.16 AGREEMENTS. Seller has no agreement or obligation to any person or
entity other than Buyer relating to the sale or transfer or proposed sale or
transfer of the Business or the Purchased Assets.

     4.17 PREDOMINANT CUSTOMERS AND DISCOUNTS. Except as set forth on Schedule
4.17, no single customer of the Business accounted for over five percent (5%) of
the Business revenues during the fiscal year ending prior to the date of this
Agreement. No significant customer has indicated to Seller that it intends to
cease to do business with Seller or materially alter the amount of business with
Seller. Except as set forth in Schedule 4.17, there are: (a) no volume discounts
or other material price advantages which are likely to be lost to the Business
by reason of the sale of the Purchased Assets contemplated by this Agreement;
and (b) no rebates or pricing discounts granted or contingently owing or
accruing to any customers of Seller.

     4.18 INVESTMENT REPRESENTATIONS. Seller acknowledges that the shares of 
stock of Buyer (the "Hawkins Shares"), being issued to Seller under Section 
2.3 as part of the purchase price hereunder, have not been registered under 
the Securities Act or under any state securities law, and that it is 
accepting the Hawkins Shares for its own account for purposes of investment 
and without expectation, desire, or need for resale and not with the view 
toward distribution, resale, subdivision, or fractionalization of the Hawkins 
Shares.

     4.19 COMPLETENESS OF DISCLOSURE. No representation in this Article contains
any untrue


                                       -7-

<PAGE>


statement of a material fact or omits to state any material fact the omission of
which would be misleading.

5. REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer represents and warrants as follows:

     5.1 ORGANIZATION. Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Minnesota. Buyer has full
corporate power to enter into and complete the transactions contemplated by this
Agreement.

     5.2 NO VIOLATION. Neither the execution and delivery by Buyer of this
Agreement or of any agreement executed in connection with this Agreement, nor
the consummation by Buyer of the transactions contemplated hereby or thereby
will, with the giving of notice or the passage of time or both, constitute a
violation of or conflict with or result in any material breach of or default
under, the terms, conditions or provisions of, any judgment, law or regulation
to which Buyer is subject, or of Buyer's Articles of Incorporation or bylaws, 
or of any agreement or instrument to which Buyer is a party or by which it is
bound.

     5.3 CORPORATE ACTION. All corporate actions and proceedings necessary to be
taken by or on the part of Buyer in connection with this Agreement and with the
transactions contemplated by this Agreement and necessary to make the same
effective have been duly and validly taken, and this Agreement has been duly and
validly authorized, executed and delivered by Buyer. This Agreement constitutes
a valid and binding agreement, enforceable of accordance with and subject to its
terms, except as limited by (a) bankruptcy, reorganization, insolvency and other
laws affecting the enforcement of creditors' rights or contractual obligations
generally and (b) general principles of equity (whether the enforceability of
this Agreement is considered in a proceeding in equity or at law).

     5.4 BROKERS. There is no broker or finder or other person who would have 
any valid claim against Buyer for a commission or brokerage fee in connection 
with this Agreement or the transactions contemplated hereby as a result of 
any agreement, understanding or action by Buyer.

6. COVENANTS OF SELLER AND SHAREHOLDERS

     Buyer and Seller agree that from the date hereof to the Closing Date:

     6.1 OPERATIONS. Seller will conduct the Business in the ordinary course of
business and will not enter into any transaction or perform any act which could
constitute a breach of the representations, warranties or covenants contained
herein. Seller will pay its creditors consistent with its prior practice and
course of dealing with respect to the paying such creditors. Seller shall
promptly disclose all contracts, agreements, commitments and leases entered into
by it during this period and, without the written consent of Buyer, shall not
enter into any agreement, contract, commitment or lease involving more than
$1,000 or having a term greater than six months.


                                       -8-

<PAGE>


     6.2 ACCESS TO RECORDS. Seller will make available to Buyer and its agents,
all of the books and records relating to the Business and the Assets.

     6.3 ACCESS TO FACILITIES. Buyer and its agents shall be given full access
during regular business hours to Seller's physical facilities for purposes of
inspection of the tangible personal property and Seller and its employees shall
cooperate fully with Buyer in its examination and inspection of the same.

     6.4 INTERIM OPERATING STATEMENTS. On or before April 15, 2000, Seller shall
furnish to Buyer a copy of its internally prepared fiscal year through February
29 operating statements for the Business. Such operating statements will be
prepared in accordance with generally accepted accounting principles and in
accordance with the books and records of the Business, will be accurate and
complete and will fairly present the financial operations of the Business as at
the date of the operating statements and the results of operations for the
period covered thereby.

     6.5 1999 FINANCIAL STATEMENTS. On or before April 17, 2000, Seller shall
deliver to Buyer a copy of its balance sheet and income statement as prepared by
Seller's accountants, in compilation form, for the fiscal year ending December
31, 1999. The balance sheet and income statement shall be prepared in accordance
with the books and records of Seller and in accordance with generally accepted
accounting principles, consistently applied, shall be accurate and complete and
shall fairly present the financial operations of the Seller as at the fiscal
year and the results of operation for the period covered thereby.

     6.6 SECURITIES FILINGS. Seller is aware that certain financial information
is necessary for securities filings required of Buyer by applicable federal or
state securities laws, rules or regulations as a result of the reporting company
status of Buyer and the nature of the transactions contemplated herein. Seller
will assist in fulfilling such reporting obligations by delivering to Buyer such
financial information requested by Buyer as is in Seller's possession or control
or which Seller causes to be prepared in the ordinary course of its business,
and Seller will use its best efforts to insure that the Seller's independent
accountants and auditors furnish to Buyer, at Buyer's expense, such additional
financial statements or consents as Buyer may require or reasonably request.

     6.7 CONSENTS. Seller shall obtain or cause to be obtained consents to the
assignment to or assumption by Buyer of all licenses, permits, leases, and other
contracts and instruments and rights of Seller included in the Purchased Assets
that require the consent of any third party by reason of the transactions
provided for in this Agreement including, without limitation, those with respect
to the contracts listed on the Contracts Schedule.

     6.8 CORPORATE ACTION. Seller shall take all necessary corporate and other
action (including shareholder approval) required of it to carry out the
transactions contemplated by this Agreement and any agreement executed in
connection herewith. Each Shareholder covenants that he will not transfer any
shares of Seller to any other person prior to the Closing Date, and that he will
vote all shares of Seller in favor of this Agreement and the transactions herein
contemplated.

     6.9 CONSUMMATION OF AGREEMENT. Seller shall fulfill and timely perform all
conditions and obligations on its part to be fulfilled and performed under this
Agreement and to cause the


                                       -9-


<PAGE>

transactions contemplated by this Agreement to be fully carried out.

     6.10 NO NEGOTIATIONS. From the date of this Agreement until the Closing,
none of the Seller, Shareholders nor any of Seller's representatives shall
solicit or enter into any discussions or negotiations with, or furnish or cause
to be furnished any information concerning the Business to, any person (other
than Buyer) in connection with any proposed acquisition of the Business or the
Purchased Assets, regardless of form.

     6.11 NOTICE OF CHANGES. Seller will notify Buyer promptly of any material
changes to the representations and warranties made by Seller herein and of any
other material changes to the Purchased Assets or the Business, including,
without limitation, changes regarding customers and suppliers.

     6.12 LIABILITIES. Seller will pay or perform all of its liabilities and
obligations as and when due, taking into account rights of set-off available to
Seller and good faith disputes.

7. CONDITIONS TO THE OBLIGATIONS OF BUYER

     The obligations of Buyer under this Agreement are, at its option, subject
to the fulfillment by Seller of the following conditions prior to or on the
Closing Date, or on the date specified:

     7.1 REPRESENTATIONS, WARRANTIES, COVENANTS. Each of the representations,
warranties, covenants and agreements of Seller contained in this Agreement and
in any agreement, statement, deed, certificate, schedule or other document
delivered by Seller or Shareholders pursuant to this Agreement or in connection
with the transactions contemplated hereby, shall have been true and accurate as
of the date when made and shall be deemed to be made again on and as of the
Closing Date and shall then be true and accurate.

     Seller and Shareholders shall have complied fully with all covenants of
Seller contained in this Agreement and in any agreement, statement, certificate,
schedule or other document delivered by Seller and Shareholders pursuant hereto
or in connection with the transactions contemplated hereby.

     7.2 CERTIFIED COPY OF RESOLUTIONS. Seller shall have delivered to Buyer a
certified copy of resolutions adopted by Seller's Board of Directors and its
shareholders authorizing the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement.

     7.3 CERTIFICATE OF SELLER. Seller shall have delivered to Buyer a
certificate of an officer of Seller, dated the Closing Date, certifying to the
fulfillment of the conditions set forth in this Section 7.

     7.4 OPINION OF COUNSEL. Buyer shall have received an opinion of James W.
Brandt, counsel to Seller, dated the Closing Date, that:


                                      -10-


<PAGE>

     (a)  Seller is a corporation duly organized, validly existing and in good
          standing under the laws of the State of Minnesota and has full
          corporate power and authority to carry on the Business as now
          conducted, and to own and operate the Purchased Assets, and to perform
          its obligations hereunder. Seller is legally qualified to do business
          as a foreign corporation in the following states:___________________.

     (b)  All necessary corporate proceedings and other consents and
          authorizations required by Seller to effect the execution, delivery
          and performance of this Agreement, as applicable to each, and all
          related documents and the consummation of the transactions
          contemplated hereby and thereby, have been taken or obtained.

     (c)  This Agreement, constitutes the valid, legal and binding obligation of
          Seller, as applicable, enforceable against each in accordance with its
          terms, subject to bankruptcy, insolvency and similar acts affecting
          the enforcement of creditors' rights or contractual obligations
          generally, and subject to general principles of equity.

     (d)  The execution, delivery and performance of this Agreement and the
          consummation of the transactions contemplated hereby and thereby do
          not breach or otherwise result in a default under Seller's Articles of
          Incorporation or By-Laws or any agreement or instrument known to
          counsel to which Seller is a party or is otherwise bound, or violate
          any statute, governmental regulation, judgment, injunction, or decree
          that Seller's counsel, exercising customary professional diligence,
          would reasonably recognize as being directly applicable to Seller or
          the transaction.

     (e)  Except as set forth in the Schedules or in any other provision of the
          Agreement, no permit, consent, approval or authorization of or
          declaration to or filing with any regulatory or other government
          authority is required in connection with the execution and delivery of
          the Agreement or the other agreements contemplated thereby and the
          performance by Seller of all transactions contemplated by such
          agreements.

     (f)  Except as set forth in Schedules attached to the Agreement or in any
          provision of the Agreement and to the best of our knowledge after due
          inquiry, there are no material actions, suits, proceedings,
          investigations or claims pending or to counsel's knowledge threatened
          against or affecting Seller at law or in equity, or before any
          federal, state, municipal or other governmental department,
          commission, board, bureau, agency or other governmental department.

     7.5 CONSENTS. All consents, approvals and filings required to be obtained
for the valid and effective consummation of the transactions contemplated by
this Agreement shall have been obtained.

     7.6 PROCEEDINGS. No action or proceeding shall have been instituted before
any court or governmental body to restrain or prohibit, or to obtain damages in
respect of, the consummation of this Agreement. None of the parties to this
Agreement shall have received written notice from any governmental body of (i)
its intention to institute any action or proceeding to restrain or enjoin or
nullify this Agreement or the transactions contemplated hereby, or to commence
any investigation


                                      -11-




<PAGE>

into the consummation of this Agreement or (ii) the actual commencement of such
an investigation. Seller shall give notice to Buyer of any such intent,
investigation or inquiry promptly upon receipt by Seller of notice of its
occurrence.

     7.7 EMPLOYMENT AGREEMENT. Buyer and Patrick Soderlund shall have entered
into an Employment Agreement in the form of Schedule 7.7 hereto.

     7.8 CONSULTANT AGREEMENTS. Buyer and each of William A. Soderlund, Jr. and
Ron Welch shall have entered into consulting agreements in substantially the
form set forth on Schedule 7.8.

     7.9 PERMITS. All licenses and permits necessary for the conduct of the
Business shall have been assigned to Buyer effective as of the Closing Date,
with all necessary consents to permit Buyer to operate the Business under such
permits and licenses.

     7.10 NO CHANGE. There shall have been no material adverse change in the
Business or the Purchased Assets from the Balance Sheet Date.

8. CONDITIONS TO THE OBLIGATIONS OF SELLER

     The obligations of Seller and Shareholders under this Agreement are, at
their option, subject to the fulfillment by Buyer of the following conditions
prior to or on the Closing Date:

     8.1 REPRESENTATIONS, WARRANTIES, COVENANTS. Each of the representations and
warranties of Buyer contained in this Agreement and in any agreement, statement,
certificate, schedule or other document delivered by Buyer pursuant hereto in
connection with transactions contemplated hereby, shall have been true and
accurate as of the date when made and shall be deemed to be made again on and as
of the Closing Date and shall then be true and accurate.

     Buyer shall have complied fully with all covenants of Buyer contained in
this Agreement and in any agreement, statement, certificate, schedule or other
document delivered by Buyer pursuant hereto or in connection with the
transactions contemplated hereby.

     8.2 CERTIFIED COPIES OF RESOLUTIONS. Buyer shall have delivered to Seller a
certified copy of resolutions adopted by the Board of Directors of Buyer
authorizing the execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement.

     8.3 OPINION OF COUNSEL. Seller shall have received an opinion of Henson &
Efron, P.A., counsel to Buyer, dated the Closing Date, in form and substance
satisfactory to Seller and its counsel that:

     (a)  Buyer is a corporation duly organized, validly existing and in good
          standing under the laws of the State of Minnesota and has full
          corporate power and authority to carry on its business as now
          conducted and to own and operate the property and assets owned and
          operated by it.


                                      -12-


<PAGE>

     (b)  All necessary corporate proceedings and other consents and
          authorizations required by Buyer to effect the execution, delivery and
          performance of this Agreement and all related documents and the
          consummation of the transactions contemplated hereby have been taken
          or obtained.

     (c)  This Agreement constitutes a valid, legal and binding obligation of
          Buyer, enforceable against Buyer in accordance with its terms, subject
          to bankruptcy, insolvency and similar acts affecting the enforcement
          of creditor's rights or contractual obligations generally, and general
          principles of equity.

     (d)  The execution, delivery and performance of this Agreement and the
          consummation of the transactions contemplated hereby do not breach or
          otherwise result in a default under Buyer's Articles of Incorporation
          or By-Laws or any agreement or instrument known to counsel to which
          Buyer is a party or is otherwise bound, or violate any statute,
          governmental regulation, judgment, injunction or decree that Buyer's
          counsel, exercising customary professional diligence, would reasonably
          recognize as being directly applicable to Buyer or the transaction.

     8.4 PROCEEDINGS. No action or proceeding shall have been instituted before
any court or governmental body to restrain or prohibit, or to obtain damages in
respect of, the consummation of this Agreement.

9. INDEMNIFICATION

     9.1 INDEMNIFICATION OF BUYER. Seller and Shareholders, jointly and
severally, hereby expressly indemnify and hold Buyer harmless from and against
any and all damages, claims, losses, expenses, costs, obligations and
liabilities, including, without limitation, interest, penalties and reasonable
attorneys' fees arising out of any of the following:

     (a)  any breach of any representation or warranty made by Seller or
          Shareholders in or pursuant to this Agreement;

     (b)  any failure by Seller or Shareholders to perform or fulfill any
          covenants or agreements set forth in this Agreement or any agreement,
          instrument or certificate executed in connection with this Agreement
          and listed on Schedule 9.1 attached; or

     (c)  the assertion against Buyer of any liabilities of Seller not to be
          assumed by Buyer hereunder.

     9.2 INDEMNIFICATION OF SELLER. Buyer hereby expressly indemnifies and holds
Seller and Shareholders harmless from and against any and all liabilities
incurred by Seller by reason of, or arising out of any of the following:

     (a)  any breach of any representation or warranty made by Buyer in or
          pursuant to this Agreement; or


                                      -13-


<PAGE>

     (b)  any failure of Buyer to perform or fulfill any of its covenants or
          agreements set forth in this Agreement or any agreement, instrument or
          certificate executed in connection with this Agreement.

     9.3 The party seeking indemnification (the "Indemnitee") shall give the
party from whom indemnification is sought (the "Indemnitor") notice of any claim
or the commencement of any action or proceeding promptly after the Indemnitee
receives notice thereof, and shall permit the Indemnitor to assume the defense
of any such claim or litigation resulting from such claim.

     If the Indemnitor assumes the defense of any such claim or litigation
resulting therefrom, the obligations of Indemnitor as to such claims shall be
limited to taking all steps necessary in the defense or settlement of such claim
or litigation resulting therefrom and to holding the Indemnitee harmless from
and against any and all losses, damages and liabilities caused by or arising out
of any settlement approved by the Indemnitor or any judgment in connection with
such claim of litigation resulting therefrom.

     The Indemnitee may participate, at its expense, in the defense of any such
claim or litigation, provided that the Indemnitor shall direct and control the
defense of such claim or litigation.

     Except with the written consent of the Indemnitee, the Indemnitor shall
not, in the defense of such claim or any litigation resulting therefrom, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof, the giving by the claimant or the plaintiff to
the Indemnitee of a release from liability with respect to the claim or
litigation.

     If the Indemnitor shall not assume the defense of any such claim or
litigation resulting therefrom, the Indemnitee may defend against such claim or
litigation in such manner as it may deem appropriate and, unless the Indemnitor
shall deposit with the Indemnitee a sum equivalent to the total amount demanded
in such claim or litigation, or shall deliver to Indemnitee a surety bond in
form and substance reasonably satisfactory to Indemnitee, Indemnitee may settle
such claim or litigation on such terms as it may reasonably deem appropriate,
and the Indemnitor shall promptly reimburse Indemnitee for the amount of all
expenses, legal or otherwise, reasonably incurred by the Indemnitee in
connection with the defense against or settlement of such claims or litigation.
If no settlement of such claim or litigation is made, the Indemnitor shall
promptly reimburse the Indemnitee for the amount of any final judgment rendered
with respect to such claim or in such litigation and for all reasonable
expenses, legal or otherwise, incurred by the Indemnitee in the defense against
such claim or litigation, but only to the extent that such amounts are actually
paid.

     9.4 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS. The
representations, warranties, covenants and agreements of Seller and Shareholders
and Buyer set forth in this Agreement shall survive the Closing and shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any party hereto.

10. NON-COMPETITION; NON-SOLICITATION; CONFIDENTIALITY

     Except as provided in this Section 10, Seller covenants and agrees that for
a period ending


                                      -14-


<PAGE>

seven (7) years after the Closing Date, it shall not anywhere in the United
States or another country where Buyer is then conducting business, directly or
indirectly, as owner, partner, joint venturer, stockholder, broker, agent,
principal, trustee, licensor, or in any other capacity whatsoever (as
applicable) (A) engage in, become financially interested in, be employed by,
render any consultation or business advice to, or have any connection with, any
person, firm, corporation, business or other enterprise engaged in a similar
business to, or which is otherwise competitive with, the Business, or (B)(i)
knowingly interfere with, disrupt or attempt to disrupt any then existing
relationship, contractual or otherwise, of the Business with any of its
customers, suppliers, employees, agents or other persons with whom it deals,
(ii) solicit for employment, attempt to employ or assist any other person in
employing or soliciting for employment any employee or executive who is at that
time employed by the Business, or (iii) influence or attempt to influence any of
the customers of the Business known to Seller (including without limitation
customers who prior to the Closing were customers of Seller), to transfer their
patronage from Buyer to any other person. Seller shall not, without Buyer's
prior written consent, from and after the Closing, divulge, furnish or make
available to any third party any financial information or other information with
respect to the Business or Buyer, other than to its professional advisors or as
compelled by law.

     Schedule 10 attached hereto lists companies (with the description of their
activities) which are specifically excluded from the provisions of this Section
10.

11. CHANGE OF NAME

     Within 5 days following the closing, Seller shall take all necessary
actions to discontinue the use of any doing business or assumed name containing
the words "St. Mary's Chemicals" or "Universal Chemicals" or any variation
thereof which is likely to cause confusion with any names used in the Business,
and shall deliver to Buyer evidence thereof satisfactory to Buyer and its
counsel, certified by the applicable Secretary of State and (if required) by the
applicable local authority as to the due filing and recordation thereof. Seller
shall also, on request of Buyer, execute and deliver to Buyer any consents or
other instruments, or take any other reasonable actions, which may be necessary
in connection with Buyer's application to qualify to transact business under the
foregoing names in any state.

12. MISCELLANEOUS

     12.1 EXPENSES. Each party hereto shall bear all of its or his expenses
incurred in connection with the transactions contemplated by this Agreement,
including, without limitation, accounting and legal fees incurred in connection
therewith.

     12.2 FURTHER ASSURANCES. From time to time prior to, at and after the
Closing Date, Seller, Shareholders, and Buyer shall execute all such instruments
and take all such actions as Buyer, Seller, or Shareholders, being advised by
counsel, shall reasonably request in connection with carrying out and
effectuating the intent and purpose hereof and all transactions and things
contemplated by this Agreement, including, without limitation, the execution and
delivery of any and all confirmatory and other instruments in addition to those
to be delivered on the Closing Date, and


                                       -15-


<PAGE>

any and all actions that may be reasonably necessary or desirable to complete
the transactions contemplated hereby.

     12.3 NOTICES. All notices, demands and other communications that are
required or permitted to be given hereunder or with respect hereto shall be in
writing, shall be given either by personal delivery, by nationally recognized
overnight courier or by telecopy, and shall be deemed to have been given or made
when personally delivered, when deposited with charges prepaid with the
nationally recognized overnight courier, addressed to the respective parties as
follows:



<TABLE>

<S>                                          <C>
If to Buyer:                                 with a copy (which shall not constitute notice) to:

Hawkins Chemical, Inc.                       Henson & Efron, P.A.         
3100 East Hennepin Avenue                    1200 Title Insurance Building
Minneapolis, MN 55413                        400 Second Avenue South      
Attn: Kurt Norman, President                 Minneapolis, MN 55401        
                                             Attn: Stanley Efron          

If to Seller or Shareholders:                with a copy (which shall not constitute notice) to:
c/o Patrick Soderlund                        James W. Brandt                                    
Route 2, Box 525                             Brandt Law Office                                  
New Prague, MN 56071                         P.O. Box 57                                        
                                             St. Peter, MN 56082                                

</TABLE>


Any party may by notice change the address to which notice or other
communications to it are delivered or mailed. Any notice deemed given herein to
Seller shall automatically be deemed given to Shareholders.

     12.4 CAPTIONS. The captions of Articles and sections of this Agreement 
are for convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Agreement.

     12.5 LAW GOVERNING. This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Minnesota.

     12.6 WAIVER OF PROVISIONS. The terms, covenants, representations,
warranties and conditions of this Agreement may be waived only by a written
instrument executed by the party waiving compliance. The failure of any party at
any time or times to require performance of any provision of this Agreement
shall in no manner affect the right at a later date to enforce the same or to
enforce any future compliance with or performance of any of the provisions
hereof. No waiver by any party of any condition or the breach of any provision,
term, covenant, representation or warranty contained in this Agreement, whether
by conduct or otherwise, in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such condition or of the
breach of any other provision, term, covenant, representation or warranty of
this Agreement.

     12.7 COUNTERPARTS. This Agreement may be executed in several counterparts,
and all counterparts so executed shall constitute one agreement, binding on the
parties hereto.


                                      -16-


<PAGE>


     12.8 ENTIRE AGREEMENT. This Agreement, together with the schedules,
exhibits and agreements executed in connection herewith, constitutes the entire
agreement between the parties and supersedes all prior agreements between them
relating to the subject matter hereof, and may not be amended except in a
writing signed by all of the parties hereto.

     12.9 SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provisions shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision never comprised a part hereof, and the remaining provisions hereof
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance here from.

     12.10 BINDING EFFECT. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns.

     12.11 DEFINITION OF "KNOWLEDGE". As used in this Agreement, the term "to
the best knowledge" of a party shall mean the actual knowledge of any one or
more of the officers of such party after conducting an appropriate investigation
of the subject matter at issue including reviews of relevant files and inquiry
of persons who could reasonably be expected to have some knowledge of the
subject.

     12.12 ANNOUNCEMENTS. Seller, Shareholders and Buyer agree that the terms of
this Agreement and the transactions contemplated hereby shall remain
confidential (except to the extent required by law or as specifically
contemplated by this Agreement), and any announcement to third parties or the
public shall be jointly planned and coordinated.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their


                                      -17-




<PAGE>


duly authorized officers, respectively, all as of the day and year first above
written.

                                        SELLER:

                                        ST. MARY'S CHEMICALS, INC.
                                        d/b/a UNIVERSAL CHEMICALS

                                        By: /s/ Patrick L. Soderlund
                                            -------------------------------
                                            Its: President
                                                 --------------------------

                                        SHAREHOLDERS:

                                        By: /s/ Patrick L. Soderlund
                                            -------------------------------
                                            Patrick L. Soderlund

                                        By: /s/ Willam A. Soderlund, Jr.
                                            -------------------------------
                                            Willam A. Soderlund, Jr.


                                        By: /s/ Ronald W. Welch
                                            -------------------------------
                                            Ronald W. Welch

                                        BUYER:

                                        HAWKINS CHEMICAL, INC.

                                        By: /s/ John R. Hawkins
                                            -------------------------------
                                            Its: CEO
                                                 --------------------------


                                      -18-



<TABLE> <S> <C>


<PAGE>
<ARTICLE> 5
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          OCT-01-2000
<PERIOD-START>                             OCT-04-1999
<PERIOD-END>                               JUN-30-2000
<CASH>                                         317,652
<SECURITIES>                                11,837,037
<RECEIVABLES>                               12,213,458
<ALLOWANCES>                                   379,900
<INVENTORY>                                  8,812,407
<CURRENT-ASSETS>                            35,324,669
<PP&E>                                      40,213,053
<DEPRECIATION>                              17,081,392
<TOTAL-ASSETS>                              66,912,278
<CURRENT-LIABILITIES>                        8,962,800
<BONDS>                                        226,003
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                       524,727
<OTHER-SE>                                  55,598,117
<TOTAL-LIABILITY-AND-EQUITY>                66,912,278
<SALES>                                     71,206,581
<TOTAL-REVENUES>                            71,206,581
<CGS>                                       53,205,404
<TOTAL-COSTS>                               53,205,404
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                              22,604
<INCOME-PRETAX>                             10,159,837
<INCOME-TAX>                                 4,003,000
<INCOME-CONTINUING>                          6,156,837
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                 6,156,837
<EPS-BASIC>                                        .58
<EPS-DILUTED>                                      .58
        

</TABLE>