<PAGE>   1

                              AMENDED AND RESTATED
                             HYDRATE SALES AGREEMENT

                  This Amended and Restated Hydrate Sales Agreement
("Agreement") is dated as of May 27, 1997 but effective as of August
1, 1995 ("Effective Date"), by and between Kaiser Aluminum & Chemical
Corporation, a Delaware corporation ("KACC"), and Kaiser LaRoche Hydrate
Partners, a Delaware general partnership ("Buyer") and replaces and supercedes
the Hydrate Sales Agreement, dated as of January 1, 1993, between KACC and
Buyer.

                                    RECITALS

                  A.    KACC and LaRoche Chemicals, Inc., a Delaware corporation
("LCI"), have entered into that certain Partnership Agreement, dated as of
January 1, 1993 (the "Partnership Agreement"), pursuant to which KACC and LCI
created Buyer (LCI was subsequently merged with and into LaRoche Industries
Inc., a Delaware corporation ("LII"), with LII as the surviving company and
succeeding to all of LCI's rights and obligations hereunder);

                  B.    The purpose of Buyer is to serve as the vehicle of KACC
and LCI for the development, operation and management of a marketing operation
for the sale of alumina trihydrate ("Hydrate") and wet alumina trihydrate filter
cake ("Wetcake");

                  C.    Hydrate and Wetcake shall be referred to herein together
as the "Products";

                  D.    This Agreement, as originally entered into by KACC and
Buyer effective January 1, 1993, provided that the parties would meet and
negotiate good faith amendments to this Agreement with respect to the quantity,
quality and pricing of Wetcake at such time as KACC was capable of producing
Wetcake at its Gramercy, Louisiana production facility (the "Facility");

                  E.    KACC now has the capability of producing Wetcake at the
Facility;

                  F.    Buyer desires to purchase its requirements of Hydrate
and Wetcake from KACC and KACC desires to sell such Hydrate and Wetcake to 
Buyer, all upon the terms and conditions set forth herein;

                  G.    Buyer has assembled and owns certain oxygen operating
equipment (the "Oxygen Facility") located at or near the Facility and desires
that KACC operate such Oxygen Facility in connection with KACC's production of
Products, and KACC is willing to do so on the terms and conditions set forth
herein; and


<PAGE>   2

                  H.    The parties hereto wish to amend and restate this 
Agreement to provide the terms and conditions upon which Buyer will purchase
Wetcake as well as Hydrate from KACC and upon which KACC will operate the Oxygen
Facility in connection with its production of Products.

                  NOW, THEREFORE, in consideration of the terms and conditions
set out in this Agreement, the parties agree as follows:

                  1.   QUANTITIES OF PRODUCTS.

                       (a)  During the term of this Agreement and subject to the
limitations contained in this Agreement, KACC shall sell and deliver to Buyer,
and Buyer shall purchase and take delivery of, all of Buyer's requirements for
Hydrate and Wetcake. As used herein, the term "Physical Capability" shall mean
the maximum capacity of the Facility to produce Products after deducting the
amount of Products sold by KACC to LII for LII's internal use at Baton Rouge.
Buyer shall purchase from KACC, and KACC shall sell to Buyer, (i) all of Buyer's
requirements for Wetcake during the term hereof; and (ii) a minimum total amount
per calendar year of no less than 125,000 metric tons of Products; provided,
however, that Buyer shall not be liable for damages in the event it fails to
purchase such minimum amount of Hydrate as a direct result of market conditions
beyond Buyer's control, and provided, further, that Buyer shall not be required
to sell Hydrate at a loss in order to purchase the minimum total amount per
calendar year referenced above. In the event of capital improvements which
increase the Physical Capability of KACC's Gramercy, Louisiana facility, as
contemplated in the Partnership Agreement, the minimum total amount per calendar
year of Hydrate which Buyer is required to purchase hereunder shall be increased
pursuant to the negotiations required under the Partnership Agreement.

                       (b)  Notwithstanding Buyer's obligation to purchase all
of its requirements from KACC as set forth in subsection (a) above, Buyer shall
have the right to purchase its immediate requirements of Products from
alternative suppliers in the event the Products delivered to Buyer by KACC fails
to meet the quality specifications required under this Agreement.
Notwithstanding KACC's obligation to sell and deliver to Buyer all of Buyer's
requirements for Products, KACC shall not be obligated to supply in any Year
hereunder an aggregate amount of Products in excess of the lesser of (i) the
Physical Capability or (ii) the



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<PAGE>   3



amounts set forth below for each such Year (the "Cap Amount"):
<TABLE>
<CAPTION>
             Year                      Cap Amount (Short Dry Tons)
             ----                      ---------------------------
             <S>                       <C>    
             1996                      320,000
             1997                      370,000
             1998                      405,000
             1999                      435,000
             2000                      470,000
</TABLE>

The parties hereto shall meet to negotiate a mutually-acceptable Cap Amount for
the Year 2001 and for the succeeding Years hereunder, commencing no later than
April 1, 2000. In the event the parties are unable to agree on a Cap Amount for
the Year 2001 on or prior to December 31, 2000, the Cap Amount for such Year
shall be an amount equal to the amount of Products actually sold by KACC to
Buyer hereunder during the Year 2000 plus ten percent (10%). In the event the
parties hereto do not thereafter reach agreement on Cap Amounts for each
succeeding Year, the Cap Amount shall increase by two percent (2%) per Year over
and above the Cap Amount for Year 2001.

                       (c)  In the event Buyer requests an amount of Products in
excess of the Cap Amounts, KACC shall reasonably cooperate with Buyer to provide
such Products requested by Buyer but shall have no obligation beyond that stated
in this subparagraph (c) to supply such excess Products. The price provisions
set forth in Article 4 hereof shall not apply to Products supplied by KACC
pursuant to this Section 1(c) from any source other than the Facility.

                       (d)  At KACC's election, KACC may supply Products from 
another source but any additional costs incurred by KACC in doing so (including
any applicable sales or use tax on such Hydrate) shall be at KACC's sole
expense.

                  2.   SCHEDULING OF PURCHASES AND DELIVERIES.

                       (a)  Buyer shall notify KACC in writing, by no later than
September 30 of each calendar year ("Year"), with respect to its estimated
requirements for Products during the following Year and its forecast of
requirements for Products during the following five (5) Years ("First Notice").
By no later than October 31 of each Year, Buyer shall notify KACC in writing
with respect to its final determination of its Products requirements for the
following Year under its best case sales plan ("Second Notice"). The quantity of
Products specified in the Second Notice shall constitute the quantity of
Products which KACC shall be obligated to make available and sell to Buyer
during the following Year, subject to the minimum amount set forth in Section
1(a) hereof and a maximum amount equal to the lesser of (i) the Physical
Capacity of the Facility or (ii) the




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<PAGE>   4



Cap Amount set forth in Section 1(b) hereof. In the event Buyer fails to provide
KACC with the Second Notice within the respective time periods set forth above,
KACC shall be obligated to make available and sell to Buyer during the following
Year the same quantity of Products which KACC is obligated to make available and
sell to Buyer during the current Year, plus five percent (5%) of such quantity,
provided that in no event shall such increased quantity exceed the lesser of (i)
the Physical Capability of the Facility or (ii) the Cap Amount for any Year.

                       (b)  Buyer will provide KACC with reasonable advance
notice of its future requirements with respect to the delivery of Hydrate and
Wetcake, and KACC will endeavor to reasonably meet such delivery requirements
and to provide Buyer with reasonable advance notice in the event it is unable to
do so. Buyer and KACC will use their best efforts to accommodate any changes
which either may request with respect to quantities of Hydrate and Wetcake and
schedules of delivery during the term of this Agreement. In estimating and
scheduling purchases and deliveries of Products, but always subject to the
requirements of Buyer's business, Buyer shall use all reasonable efforts, taking
into consideration the seasonal requirements of Buyer, to schedule approximately
equal quantities during each quarter, month, week and day during the term of
this Agreement.

                       (c)  In the event KACC's interest in the Partnership is 
reduced such that it no longer has at least fifty percent (50%) of the voting
power on the Executive Committee (as defined in the Partnership Agreement), the
maximum quantity of Products KACC will be obligated to deliver during subsequent
calendar years under Section 2(a) will be limited to the quantity sold in the
calendar year in which KACC's voting power is reduced (but in no event shall
such quantity exceed the Physical Capability of the Facility), and the parties
shall discuss appropriate revisions to the provisions on scheduling and
deliveries.

                  3.   SPECIFICATIONS.

                       (a)  Products delivered by KACC to Buyer shall meet the 
specifications set forth in Exhibit A. KACC acknowledges that its accuracy in
meeting the specifications provided herein is essential to Buyer's business.

                       (b)  Notwithstanding the foregoing, in the event Products
delivered pursuant to this Agreement fails to meet the specifications set forth
in Exhibit A, such failure shall not be regarded by the parties as a cause for
rejection of the shipment of such Products unless such differences in
specifications render such shipment or a substantial portion thereof unfit for
its intended use. Buyer acknowledges that in the course of selling Products to
third party customers, certain customers' specifications for Products will be
more stringent than the present process capabilities of KACC's facilities would
permit. Consequently, Buyer agrees to use its best efforts to (i) segregate
Products delivered hereunder according to its particular qualities and (ii)
utilize



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<PAGE>   5



any non-conforming Products by supplying such Products to other customers with
less stringent specification requirements.

                       (c)  Subject to the foregoing, on notice from Buyer, KACC
shall promptly replace all Products failing to meet the required specifications
at no additional cost to Buyer; provided, that if KACC shall not promptly
replace Products failing to meet specifications, then Buyer may procure
replacements, and all costs and expenses incurred in connection with such
replacements (including any net costs incurred in disposal of Products failing
to meet specifications) shall be for the account of KACC.

                       (d)  Notwithstanding any of the foregoing which may be to
the contrary, KACC hereby agrees to use its best efforts to achieve 85% minimum
reflectance for Products as set forth above; provided however, that the Buyer
hereby acknowledges that due to the untried nature of the process, such minimum
reflectance level may not be immediately attainable. In the event that KACC is
unable, by no later than December 31, 1996 (the "Determination Date"), to
produce Products with 85% minimum reflectance, the parties shall promptly meet
to determine, in good faith, a reasonable, achievable minimum reflectance
specification. In such event KACC shall, on the Determination Date, deliver to
Buyer in writing a program designed by KACC to attempt to render the process
capable of producing Products meeting the 85% minimum reflectance specification.
At such time as KACC and Buyer mutually determine that KACC is capable of
producing Products with 85% minimum reflectance on a consistent basis, the 85%
minimum reflectance specification, or such higher reflectance specification as
to which the parties may agree, shall become mandatory on KACC. Buyer hereby
acknowledges and agrees that KACC's best efforts obligations under this Section
3(d) shall not require KACC to make or incur any capital expenditures.

                       (e)  The specifications for Wetcake set forth on Exhibit
A, other than as otherwise provided in subparagraph (d) above for reflectance,
shall be reviewed by the parties on December 31, 1997 to determine whether any
adjustments should be made. The specifications as currently set forth on Exhibit
A for Wetcake shall continue to govern unless amended by the mutual agreement of
the parties in writing.

                  4.   PRICE.

                       (a)  The price per metric ton of Products produced at the
Facility shall be determined quarterly on the basis of the following formulae:

                       Hydrate Price = (RP x .65385) - (Eh + Oh) + D + DM
                       Wetcake Price = (RP x .65385) - (Ew + Ow) + D + DM



                                       5
<PAGE>   6



         DM =              The cost of Dadmac additive used for control of color
                           of Products. Such cost of such Dadmac additive shall
                           be borne solely by KACC at all times prior to August
                           1, 1997 and shall be borne solely by Buyer after
                           August 1, 1997.

         RP =              RGO Base Price, which shall be determined quarterly
                           and calculated as follows: (i) for the period from
                           the date hereof through July 31, 1997, the RGO Base
                           Price shall be the weighted average selling price on
                           an F.O.B. producing plant basis of one metric ton of
                           C-70 reduction grade alumina ("RGO") (x) sold by KACC
                           from its alumina plants to third party buyers, and
                           (y) purchased by KACC from third party sellers, in
                           both cases during the calendar quarter immediately
                           preceding the quarter for which the RGO Base Price is
                           being determined, (ii) for the period from August 1,
                           1997 through the remainder of the term hereof, the
                           RGO Base Price shall mean KACC's weighted average
                           selling price on an F.O.B. Gramercy, Louisiana basis
                           of one metric ton of RGO produced at KACC's facility
                           in Gramercy, Louisiana, to unrelated third parties
                           during the calendar quarter immediately preceding the
                           quarter for which the RGO Base Price is being
                           determined. The latter formula for determining the
                           RGO Base Price for calendar quarters following August
                           1, 1997, shall only be applicable if KACC's Gramercy
                           facility sells to unrelated third parties a minimum
                           of 125,000 metric tons of RGO during the calendar
                           quarter upon which the price calculation is based. If
                           such latter formula is not applicable because the
                           foregoing condition is not met, the former formula
                           shall be applicable until such condition is met.

         Eh =              The energy credit for the difference between the
                           energy used to calcine a pound of alumina (2050
                           BTU/pound) and the heat energy used to produce a
                           pound of Hydrate (232 BTU/pound). The energy factor
                           will be $5.79 for the fourth quarter of 1995, based
                           upon an example price of $2/MM BTU. The amount will
                           be adjusted on January 1 of each calendar year during
                           the term hereof in accordance with the unadjusted
                           percentage change in the PPI-FG until such time as
                           the balance in the Energy Credit Pool (as that term
                           is hereinafter defined) reaches zero (0), at which
                           time, the energy factor shall thereafter be adjusted
                           each quarter according to the average daily NYMEX
                           closing price for the prior quarter plus delivery
                           costs and taxes applicable to natural gas usage.



                                       6
<PAGE>   7



                           The following example is based upon $2/MM BTU natural
                           gas 4% tax rate and .09 per million BTU delivery
                           cost:

                           Gas Charge     x     PPI-FG93 to 95 basis  =   2.04
                           ----------           --------------
                           $2/MM BTU     x     126.1/123.09

                           4% tax                                     =     .08
                           ------
                           2.04 x .04%

                           Delivery Charge/MM BTU                     =     .09

                           Total Gas/MM BTU                           =  $2.21

                           Energy Credit $ = (2050 BTU - 232) x 2000 Lb. X
                                              --------          --------
                                              Lb. Calc.         Short Ton

                                              102 x $2.21
                                              ---   -----
                                              156   1 million BTU

                                              = $5.25/Short Ton

                                              = $5.79/Dry Metric Ton

                           The "Energy Credit Pool" shall mean an amount,
                           calculated quarterly, equal to, from time to time,
                           the aggregate difference between the energy cost
                           factor as originally calculated under this Agreement
                           commencing on January 1, 1993 as adjusted in
                           accordance with the unadjusted percentage change in
                           the PPI-FG and an amount equal to such energy cost
                           factor had it been adjusted in accordance with the
                           average daily NYMEX closing prices for each quarter
                           plus delivery costs and applicable taxes during such
                           period calculated from and after January 1, 1993.

         Oh =              The operating cost factor per metric ton of Hydrate.
                           The operating cost factor consists of credits for the
                           avoided maintenance and operating costs associated
                           with calcining ($1.98/DMT) and shipping alumina to
                           terminal ($2.12/DMT). The operating costs will be
                           adjusted on a calendar year basis in accordance with
                           the unadjusted percentage change in the PPI-FG.


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<PAGE>   8



         Ew =              The energy credit for the difference between the
                           energy used to calcine a pound of alumina (2050
                           BTU/pound) and the heat energy used to produce a
                           pound of Wetcake (0 BTU/pound). The energy factor
                           will be $5.91 per dry metric ton of Wetcake for the
                           fourth quarter of 1995, based upon an example price
                           of $2/MM BTU. The amount will be adjusted on January
                           1 of each calendar year during the term hereof in
                           accordance with the unadjusted percentage change in
                           the PPI-FG until such time as the balance in the
                           Energy Credit Pool reaches zero (0), at which time,
                           the energy factor shall thereafter be adjusted each
                           quarter according to the average daily NYMEX closing
                           price for the prior quarter plus delivery costs.

                           The following example is based upon $2/MM BTU natural
                           gas:

                           Energy Credit $ = ( 2050 BTU - 0)  X  2000 Lb X
                                               --------          -------
                                               Lb. Calc.         Short Ton

                                             102  x  $2
                                             ---     --
                                             156     1 million BTU

                                           = $5.36/Short Ton

                                           = $5.91/Dry Metric Ton

         Ow =              The operating cost factor per metric ton of Wetcake.
                           The operating cost factor consists of credits for the
                           avoided maintenance and operating costs associated
                           with calcining ($1.98/DMT) and shipping alumina to
                           terminal ($2.12/DMT), and the avoided costs of
                           loading dry hydrate ($0.73/DMT). The operating cost
                           factor adds costs for operating the Wetcake loadout
                           facility ($1/DMT). Actual maintenance costs will be
                           billed to Buyer each month.

                                                  Ow = 1.98 + 2.12 + 0.73 - 1.00

                                                  Ow = 3.83/DMT

                           Costs for operating the Wetcake loadout facility
                           ($1/DMT) will be reviewed in December, 1996 for
                           adjustments. Having no prior history of Wetcake
                           production, cost basis will be reviewed yearly



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<PAGE>   9



                           until such time as KACC and Buyer are satisfied that
                           the cost basis is correct.

                           All avoided costs for Products will be reviewed every
                           five (5) years during the term hereof by the parties
                           hereto to determine the continued propriety thereof.

                  D =      the cost of dilution incurred in manufacturing
                           Products, which shall be calculated as follows:

                  (i)      for the period from January 1, 1995 through December
                           31, 1996, D shall equal (a) 0, with respect to each
                           metric ton of Products sold hereunder up to a sum
                           equal to the difference between 220,445 metric tons
                           of Products and the number of metric tons of Products
                           sold to LII in a calendar year pursuant to that
                           certain Specialty Aluminas Sales Agreement dated as
                           of July 26, 1988, as amended, and (b) $6.00 for the
                           fourth quarter of 1995, with respect to each metric
                           ton of Products sold hereunder in addition to the sum
                           referenced in the immediately preceding clause (a),
                           as adjusted on January 1 of each year during each
                           such period in accordance with the unadjusted
                           percentage change in the PPI-FG;

                  (ii)     for the period from January 1, 1997 through July 31,
                           1997, D shall equal (a) 0, with respect to each
                           metric ton of Products sold hereunder up to a sum
                           equal to the difference between 128,593 metric tons
                           of Hydrate and the number of metric tons of Products
                           sold to LCI during such period pursuant to that
                           certain Specialty Aluminas Sales Agreement dated as
                           of July 26, 1988, as amended, and (b) $6.00 (1995
                           basis), with respect to each metric ton of Products
                           sold hereunder in addition to the sum referenced in
                           the immediately preceding clause (a), as adjusted on
                           January 1, 1997 in accordance with the unadjusted
                           percentage change in the PPI-FG; and,

                  (iii)    for the period from August 1, 1997 through the
                           remainder of the term hereof, the cost of dilution
                           incurred in manufacturing Products, which shall be
                           applicable to each metric ton of Products sold
                           hereunder during such period, shall be such amount as
                           the parties shall agree upon in negotiations to occur
                           during the first quarter of 1997, which shall
                           establish (a) a wash water dilution penalty on the
                           filters for quality control equal to the difference



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<PAGE>   10



                           between the average pounds of water per pound of
                           Products for Products production and the average
                           pounds of water per pound of Products for RGO
                           production, (b) a dilution penalty for oxalate
                           control based on water directly added to the
                           dissolver system, (c) a dilution penalty for oxalate
                           control based on direct steam heating, which shall be
                           calculated based on additional wash water usage and
                           the cost of the steam used, and (d) the cost of the
                           use of any special chemicals used to reduce the
                           dilution penalty (i.e. drainage aid). The total cost
                           of dilution to the process shall be calculated by
                           using KACC's computer program commonly known as the
                           Gramercy Process Model. The cost of dilution incurred
                           in manufacturing Products agreed upon by the parties
                           pursuant to this subsection shall be adjusted on
                           January 1 of each subsequent year in accordance with
                           the unadjusted percentage change in the PPI-FG.

                 PPI-FG =  the Producer Price Index for Finished Goods published
                           by the U.S. Bureau of Labor Statistics in the monthly
                           publication Producer Price Indexes for November of
                           the immediately preceding calendar year compared to a
                           base of November 1994. If the U.S. Bureau of Labor
                           Statistics ceases to publish Producer Price Indexes,
                           the parties shall mutually select a reasonable
                           substitute index which is intended to reflect changes
                           in producer prices for finished goods in the United
                           States.

                   (b)  In the event of Expansion Improvements, as that term is 
defined in the Partnership Agreement, approved by the Executive Committee of the
Partnership, the price of Products hereunder shall be adjusted in accordance
with this Section 4(b). In the event KACC elects to retain ownership of the
Expansion Improvements, the price of Products in effect upon the completion of
such Expansion Improvements shall be increased by an amount equal to the
Reimbursement Amount, as defined below, which shall be amortized over five (5)
years at the Reimbursement Interest Rate, as defined below. Such increase in
price shall be recovered by KACC in equal amounts on a monthly basis by
adjusting the purchase price on the first 10,000 tons of Products sold each
month in each of the five years following the completion date of such Expansion
Improvements. "Reimbursement Amount" shall mean all of KACC's costs associated
with Expansion Improvements, plus interest equal to the published interest rate
on five (5) year Treasury Bonds in effect on the date construction commences
plus four percent (4%) ("Reimbursement Interest Rate"), such costs being
increased by the Reimbursement Interest Rate to the date of the completion of
the construction of the Expansion Improvements. The amount of reimbursements to
KACC under this Section 4(b) shall be reduced, in an amount to be agreed upon by
KACC and Buyer (with the consent of LCI), in order to take into account sales of
Products from KACC to LCI for internal use at LCI's Baton Rouge facility.



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<PAGE>   11



                   (c)  In the event the parties determine after review of 
estimated costs that the values of "Eh", "Oh", "Ew", "Ow", or "D" following
completion of the Expansion Improvements are different from such values
determined in accordance with Section 4(a) above, that the price of the
increased tonnage or new or improved product permitted by such Expansion
Improvements shall be priced accordingly. The revised values of "Eh", "Oh",
"Ew", "Ow", or "D" determined in accordance with this Section 4(c) shall
thereafter be adjusted on January 1 of each calendar year in accordance with the
unadjusted percentage change in the PPI-FG.

                    d)  Within fifteen (15) days after the beginning of each 
calendar quarter, KACC shall provide to Buyer a written statement certified by
the appropriate officer of KACC to be true and correct, which shall set forth
the RGO Base Price and the price for Products for such quarter and state that
such prices were accurately calculated. Buyer shall have the right to audit the
financial records of KACC to verify the accuracy of the determination of the
price of the Products. Such audit shall be conducted at KACC's office located at
its Gramercy, Louisiana plant by a firm of independent certified public
accountants designated by Buyer. Such audit shall not unreasonably interfere
with the operations of KACC. If, as a result of any such audits, it is
determined that Buyer is entitled to recover in excess of $50,000.00 from KACC
for any calendar year due to any inaccuracies in the invoices or any reports
theretofore provided by KACC for such year, then in addition to any such
recovery, Buyer shall also be entitled to recover the costs incurred in
conducting such audits plus interest on all amounts recovered at the
Reimbursement Interest Rate or the maximum permitted rate, whichever is less.

                   (e)  In the event in any quarter the market prices of RGO 
increase to the level that the margin between the price of Products to Buyer
hereunder and the prevailing prices at which Buyer is selling Products to its
customers is eliminated or substantially narrowed, then the parties will meet to
confer regarding a temporary reduction in the price at which Products is sold
under this Agreement. The amount of the Products price reduction and the
duration of the period during which it shall remain in effect, and the amount of
a subsequent Products price increase and the period during which it shall remain
in effect, shall be determined under the principle that the average price of
Products under this Agreement during the period in which the price is adjusted
(either reduced or increased) shall be substantially the same as if the price
had not been so adjusted.

               5.  OXYGEN PROCESSING FEES; OPERATING FEE; ECONOMIC BENEFIT.

                   (a)  The Buyer shall reimburse KACC for all costs related to
the operation and maintenance of the oxygen injection facility and the
implementation of the program designed by KACC which is referenced in Section
3(d) above. These costs will include purchases of oxygen and additional sulfide
required, rent, administrative costs, insurance, property taxes, ISO costs and
environmental costs. The Buyer will be responsible for the costs of any
additional



                                       11
<PAGE>   12
chemicals or materials needed to achieve the reflectance levels required by the
Buyer other than as otherwise provided herein with respect to Dadmac. Additional
sulfide will be charged at the rate of .727 tons of sulfide per ton of oxygen.

                        Additional power over normal Bayer plant operations will
be required to operate the oxygen injection and Wetcake loadout facilities. The
Buyer shall be recharged the actual cost of that power. The charge will be
calculated as follows:

       [(13090 kwh/month + (4.94 kwh x TPM Wetcake)] x Incremental KACC power 
       rate] + (0.299 x TPM Wetcake x (gas price per Henry Hub + 
       delivery/mmbtu)) + $1728/month

                        Where TPM is the tons per month of Wetcake on a short 
dry ton basis and the Incremental KACC power rate is the rate as defined by
Amendment No. 2 to the Powerhouse Operating Agreement, dated as of November 1,
1996, by and between KACC and LII.

                        In the event that KACC does not purchase incremental 
power from LII, then the monthly power charge shall be calculated as follows:

       [13090 kwh/month + (4.94 kwh x TPM Wetcake)] x [.0125 x (gas price per 
       Henry Hub + delivery/mmbtu)] + [0.299 x TPM Wetcake x (gas price per
       Henry Hub + delivery/mmbtu)] + $1728

                        If a liquor purge or liquor sale must be made for 
sulfate control, the Buyer shall share in the cost (or gain) for the sulfate
reduction.

                 (b)    In addition, in consideration of KACC's operation of
the oxygen injection facility under that certain Lease, dated as of March 26,
1996, by and between Buyer and KACC (the "Oxygen Operating Lease"), Buyer shall
pay to KACC an oxygen operating fee (the "Operating Fee"), payable in such
amounts and at such times as the "Basic Rent" or Renewal Rent, as applicable,
as those terms are defined in the Oxygen Operating Lease, are payable under
the Oxygen Operating Lease.

                 (c)    In addition, in consideration of KACC's operation of
the wetcake facility under that certain Lease, by and between Buyer and KACC
(the "Wetcake Operating Lease"), Buyer shall pay to KACC a wetcake operating
fee (the "Operating Fee"), payable in such amounts and at such times as the
"Basic Rent" or Renewal Rent, as applicable, as those terms are defined in the
Wetcake Operating Lease, are payable under the Wetcake Operating Lease.

                 (d)    The parties hereby acknowledge that KACC may derive 
significant


                                       12
<PAGE>   13



economic benefits from the addition of the Oxygen Facility and the Sulfate
Removal System to the Bayer process at the Facility. The parties further
acknowledge that KACC may incur significant costs as a result of KACC's ongoing
pursuit of alternatives to the installation of the Sulfate Removal System and
that one or more of such alternatives may result in significant cost savings to
KACC in producing the Products hereunder. In light of the foregoing, the parties
hereby agree as follows:

                 (i)    KACC shall have a period of twenty-four (24) months from
                        and after September 1, 1995 to determine, in good faith
                        based upon the state of operations at the end of such
                        time period, whether it will derive a significant net
                        economic benefit from the addition of the Oxygen
                        Facility and the Sulfate Removal System to the operation
                        of the Bayer process at the Facility. Upon the
                        expiration of such period of time, KACC shall deliver
                        written notice to Buyer of its determination whether or
                        not such economic benefit will be obtained by KACC,
                        which notice shall describe the facts and circumstances
                        supporting such determination in sufficient detail. Said
                        determination by KACC shall be conclusive absent
                        manifest error or bad faith on the part of KACC. Buyer
                        and its representatives shall have the right, in
                        connection with its review of KACC's determination, to
                        ask questions of KACC personnel familiar with the
                        determination and to inspect and copy any and all
                        records of KACC pertinent to KACC's determination.

                 (ii)   In the event KACC determines that it has enjoyed a
                        significant economic benefit, the dollar amount of such
                        benefit shall be applied, dollar for dollar as provided
                        hereinbelow, to offset Buyer's obligations hereunder to
                        reimburse KACC for its costs in operating the Oxygen
                        Facility and the Sulfate Removal System. The dollar
                        amount of such economic benefit, if any, shall be
                        annualized and a formula established for a period of
                        five (5) years from and after the date of any such
                        determination. Upon the expiration of such five (5) year
                        period, the parties shall meet to determine what
                        adjustments, if any, are necessary to the economic
                        amounts allocable to Buyer. In the event that the amount
                        of the economic benefit exceeds the aggregate amount of
                        all said costs paid or payable to KACC hereunder, the
                        amount of such excess shall be paid by KACC to Buyer;
                        provided, however, that the amount of any such
                        excess payable to Buyer shall in no event exceed the
                        lesser of: (A) $500,000 per year and (B) an amount
                        equal to fifty percent (50%) of such excess.


                                       13
<PAGE>   14
                 (iii)  In the event that all of KACC's reimbursable costs
                        hereunder would be offset by the amount of the
                        above-described economic benefit derived by KACC, KACC
                        shall have the option, at any time following its
                        determination that an economic benefit in such amount
                        exists, to purchase the Oxygen Facility and the Sulfate
                        Removal System from Buyer for an amount equal to Buyer's
                        original cash cost of the Oxygen Facility and the
                        Sulfate Removal System plus an amount equal to accrued
                        interest on such amount calculated from the date of
                        LII's initial funding of capital for the Oxygen Facility
                        or the Sulfate Removal System, as the case may be, at an
                        interest rate equal to the Reimbursement Interest Rate
                        (the "Exercise Price"). Upon KACC's exercise of the
                        foregoing option and payment by KACC of the Exercise
                        Price, KACC shall retain all future economic benefits of
                        the Oxygen Facility and the Sulfate Removal System, KACC
                        shall have no obligation to make payments under Section
                        5(c)(ii) effective as of the date of KACC's exercise of
                        the option, and Buyer shall be relieved of all of its
                        obligations hereunder to reimburse KACC for its costs in
                        operating the Oxygen Facility and the Sulfate Removal
                        System.

                 (iv)   Buyer shall reimburse KACC for such costs related to its
                        efforts to find a suitable alternative to the Sulfate
                        Removal System as KACC and Buyer may agree. In the event
                        a suitable alternative is found the operation of which
                        results in significant cost savings over the operation
                        of the Sulfate Removal System, Buyer's obligation to
                        reimburse KACC for operation and maintenance of the
                        Sulfate Removal System shall be accordingly reduced. For
                        purposes of this provision, the parties acknowledge that
                        KACC may incur such costs at the Facility or at its
                        bauxite affiliate located in Jamaica.


                 6.   SULFATE REMOVAL.

                 The Buyer shall reimburse KACC for all costs related to the
operation and maintenance of the sulfate removal system to be installed at the
Facility in connection with the Oxygen Facility (the "Sulfate Removal System").
These costs will include purchases of caustic, energy, rent, administrative
costs, insurance, property taxes and environmental costs. The Buyer will be
responsible for the costs of any additional chemicals or materials needed to
facilitate the removal of sulfate from the plant liquor stream. Any and all
profits or losses realized from the disposal of sulfate shall be for the account
of Buyer.

                 The Buyer will receive an energy charge monthly from KACC to
operate the Sulfate




                                       14
<PAGE>   15



Removal System. The charge will be calculated as follows:

(225KW x hours per month operated) x 12,500 btu/kwh x (gas price per nymex + 
delivery/mmbtu)

                  Where hours per month operated includes all time that the
pumps are energized to remove sulfate or clean the unit.

                  7.        DELIVERY OF PRODUCTS.

                  All Hydrate delivered by KACC to Buyer shall be delivered at
Buyer's option to either trucks or Buyer's rail cars, F.O.B. KACC's loadout
spout and all Wetcake delivered by KACC to Buyer shall be delivered to trucks
F.O.B. KACC Wetcake loadout spout at its Gramercy, Louisiana plant, unless
otherwise agreed between the parties; provided, however, that KACC's obligation
to deliver Products to trucks shall be subject to the capabilities of KACC's
equipment at the time of such delivery.

                  8.        MEASUREMENT.

                  Rail cars and trucks shall be check weighed at the expense of
KACC to verify amounts delivered. Quantities shipped by rail car shall be
measured by railroad scales approved by the appropriate state authority.
Quantities of Products shipped by truck shall be measured on truck scales
approved by the appropriate state authority. Additional weighing at any
destination location shall be at the expense of Buyer. To the extent that
quantities of Products are hereafter shipped by barge, the parties hereto shall
agree upon a commercially feasible and acceptable method of measurement.

                  9.        TAXES.

                  All sales, use, or other taxes (excluding ad valorem taxes,
franchise taxes, and taxes based upon the income of the parties) levied,
assessed or imposed with respect to the sale or use or consumption of any
product purchased hereunder shall be for the account of Buyer and shall be added
to the then current price payable hereunder unless Buyer shall provide
information reasonably satisfactory to KACC that no such taxes are payable. If
Buyer wishes to contest the amount or validity of any such tax by appropriate
administrative or legal proceedings, KACC shall cooperate with Buyer in such
undertaking, provided that all costs and expenses of any such contest and/or any
penalties, interest or other charges that shall accrue thereon by reason of any
such contest will be borne by Buyer. All rebates or refunds with respect to such
tax or the contest thereof shall be the property of Buyer.



                                       15
<PAGE>   16



                  10.       DEMURRAGE.

                  Buyer shall be obligated to pay for any rail car demurrage
incurred in connection with Products.

                  11.       PAYMENT TERMS.

                  Payment for the Products delivered hereunder during any
calendar month shall be due on the fifteenth (15th) day of the following
calendar month or, if that day falls on a holiday, on the next banking business
day.

                  12.       INVOICES AND OTHER DOCUMENTATION.

                  All invoices for Products delivered hereunder during any
calendar month shall be sent to Buyer within three (3) business days after the
end of such calendar month. All invoices shall refer to this Agreement and shall
show the precise quantity of Products covered thereby. Oxygen processing fees,
wetcake processing fees, and sulfate removal fees shall be invoiced to the Buyer
on a monthly basis and shall be paid by the Buyer within fifteen (15) days of
receipt of invoice. If KACC is required to estimate any component used in the
calculation of the cost of any Product, it may do so and the price shall be
adjusted when the estimated cost component is determined. KACC shall promptly
invoice any additional amount payable on normal payment terms or refund any
overcharge. No interest shall be payable thereon. KACC shall provide Buyer
hereunder with the original or copies of bills of lading on shipments made by it
pursuant to this Agreement. Buyer may use standard forms for the placing of
orders, deliveries, etc. Any such forms are for administrative purposes only and
shall not alter or amend this Agreement in any way.

                  13.       FORCE MAJEURE.

                           (a)   Provided that prompt notice of delay or failure
to deliver or receive Products hereunder is given by the party so affected to
the other, followed by written confirmation as promptly as possible, any such
delay or failure by either party in performance hereunder shall be excused to
the extent such delay or failure is caused by the following events of force
majeure ("Force Majeure"): demands, requests, decrees or restraints of
Government, acts of God, strikes, lockouts or other labor disturbances (neither
party shall be required to settle any labor matter against its own judgment),
war, sabotage, fire, explosion, accident, breakdown of machinery or 



                                       16
<PAGE>   17



equipment, shortage or inability to obtain fuel, power, natural gas, raw
materials, or equipment without litigation and at ordinary prices from usual
sources, or any other cause or causes, beyond such party's reasonable control,
whether similar or dissimilar to those already specified, which affect the
production, transportation, delivery, use or consumption of any Products to be
delivered hereunder or any material used in, or in connection with, their
production, use or consumption.

                           (b)   Performance under this Agreement shall be 
excused without liability during the continuance of the inability of the party
to perform caused by Force Majeure, and the quantities specified in this
Agreement shall be reduced to the extent of deliveries omitted. In no event
shall KACC be obligated to deliver any product from any plant or facility other
than its Gramercy, Louisiana plant, to replace the quantities not delivered due
to events of Force Majeure.

                           (c)   If such an event of Force Majeure occurs and
Buyer enters into any other Agreements which are reasonably necessary to secure
for Buyer alternative sources of supply, the quantities of product obtained
under such alternative Agreements shall be applied to reduce the quantity
required to be purchased under Section 1 of this Agreement during the term of
such alternative Agreements.

                  14.      LIABILITIES AND RESPONSIBILITIES.

                  Full liability and responsibility for compliance with Federal,
State, Municipal and local laws, ordinances, and regulations governing
discharge, storage and handling of the Products, whether or not meeting
specifications in accordance with this Agreement, shall be the responsibility
of:

                           (a)   KACC, who shall hold Buyer harmless against any
claim, demand or causes of action for personal injury (including death) or
property damage arising from or attributable to such Products through completion
of delivery thereof at the F.O.B. point; and

                           (b)   Buyer, who shall hold KACC harmless against any
claim, demand or cause of action for personal injury (including death) or
property damage arising from or attributable to the discharge, storage and
handling of such product after delivery has been completed at the F.O.B. point.

                  15.      WARRANTY; LIMITATION.

                           (a)      KACC warrants that the Products sold by it 
hereunder will be of good quality and workmanship, will meet and comply with all
relevant specifications, and that title thereto will be transferred to Buyer
free from any liens and encumbrances and that Buyer will



                                       17
<PAGE>   18



acquire full title thereto.

                           (b)   EXCEPT AS SO PROVIDED, KACC MAKES NO 
REPRESENTATION OR WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF ANY PRODUCTS SOLD BY IT PURSUANT TO THIS AGREEMENT.

                           (c)   All Products shall be analyzed by KACC to 
determine whether such Products comply with the required specifications as set
forth in Section 3. KACC shall inspect trucks and rail cars prior to being
loaded with Products. Such inspections shall be conducted pursuant to inspection
specifications to be determined by the parties hereto within a reasonable time
after the execution of this Agreement. Subject to subsection (d) below, KACC
shall only be responsible to replace Products which are contaminated or lost as
a result of KACC's failure to reasonably inspect trucks and rail cars pursuant
to the inspection specifications agreed upon by the parties. KACC shall, upon
the request of Buyer, provide Buyer with samples of any particular delivery of
Products to Buyer to permit Buyer to inspect such Products within a reasonable
time thereafter. If on such inspection any such Products are found to be
defective, Buyer shall promptly notify KACC so that such Products can be
replaced as provided in Section 3. Failure to so notify KACC within a reasonable
time after Buyer has delivered Products to its customers shall be deemed a
waiver of Buyer's right to reject such Products. The parties acknowledge that
Buyer may elect not to inspect Products being sold by Buyer to its merchant
customers. Notwithstanding the foregoing language regarding inspection rights,
the parties agree that Buyer shall have the right to permit its merchant
customers of Products to inspect such Products on Buyer's behalf within a
reasonable time after delivery of such Products to such customers. If on such
inspection by one of Buyer's customers, any Products are found to have
significantly different properties than those reported to Buyer in connection
with the analysis performed by KACC, Buyer shall promptly notify KACC so that
such Products can be replaced as provided in Section 3.

                           (d)   KACC shall not be liable for special, punitive,
incidental or consequential damages resulting from breach of warranty, delay of
performance or other default hereunder. Except as provided in Section 3, KACC's
liability and Buyer's remedy for action arising out of this Agreement is hereby
limited to replacement of the non-conforming Products or payment in an amount
not to exceed the agreed upon price of the Products for which damages are
claimed, at Buyer's option.

                  16.      TERM.

                  The term of this Agreement shall be for a period beginning on
the Effective Date and ending on December 31, 2012, unless earlier terminated
pursuant to the terms hereof or by



                                       18
<PAGE>   19



mutual agreement of the parties. Notwithstanding the foregoing, KACC may elect
to terminate this Agreement, without liability to KACC, upon such date as KACC
determines in its sole discretion that continuation of the operations of the
Facility is no longer economically viable; provided, however, that Exhibit A to
that certain Specialty Aluminas Sales Agreement between KACC and LCI, dated July
26, 1988, is hereby deemed to be fully applicable to the parties through
September 30, 1994, it being the intent of the parties to aggregate the quantity
of Products sold to Buyer hereunder with the quantity of Products sold to LCI
under said Specialty Aluminas Sales Agreement in order to determine the
applicability of said Exhibit A. In the event KACC does not elect to terminate
this Agreement following a shutdown of the Facility, KACC may provide Products
of substantially equivalent quantity and quality from another source in which it
has an equity interest; provided, however, that the provisions of Article 4
shall continue to govern the pricing of such Products (with the dilution factor
being the same as the dilution factor applicable to Products produced at the
Facility subject to any adjustment thereto agreed upon by the parties in 1997)
and KACC shall be responsible for any incremental freight and delivery charges
incurred as a result of changing the source of Products hereunder.

                  17.      WAIVERS.

                  Failure of either party to insist, in any one or more
instances, upon a strict performance of any of the terms of this Agreement, or
the waiver by either party of any term or right or any default of the other
party hereunder, will not be deemed or construed as a waiver of or a
relinquishment for the future of any such term, right or default.

                  18.      AMENDMENTS.

                  This Agreement shall not be amended or modified except in
writing signed by both parties hereto.

                  19.      NOTICES.

                  Any notices or other communications required or permitted
hereunder shall be sufficient if given or sent by registered or certified mail,
postage prepaid, to the following addresses or such other addresses as shall be
furnished in writing by either party to the other party. Any such notice or
communication shall be deemed given as of the date upon which such notice or
communication is first sent by telex, telecopier or other means of instantaneous



                                       19
<PAGE>   20



communication, and simultaneously confirmed by mail in the manner specified 
above.

To KACC:         Kaiser Aluminum & Chemical Corporation
                 P. O. Box 3370
                 Gramercy, LA  70052
                 Attn: Director, Sales and Customer Relations, Alumina Business
                       Unit

                 with a copy to:

                 Kaiser Aluminum & Chemical Corporation
                 P. O. Box 3370
                 Gramercy, LA  70052
                 Attn: Legal Counsel, Alumina Business Unit

To Buyer:        Kaiser LaRoche Hydrate Partners
                 1111 Airline Highway 61
                 Gramercy, LA 70052
                 Attn: General Manager

                 with a copy to:

                 LaRoche Industries Inc.
                 1100 Johnson Ferry Road, N.E.
                 Atlanta, GA  30342
                 Attn: President

                 with an additional copy to:

                 LaRoche Industries Inc.
                 1100 Johnson Ferry Rd., N.E.
                 Atlanta, GA 30342
                 Attn: Corporate Counsel

          20.    GOVERNMENT REGULATIONS.

          KACC certifies that the Products delivered under this Agreement will
be produced in compliance with all applicable requirements of Sections 6, 7 and
12 of the Fair Labor Standards Act of 1938, as amended, and of the regulations
and orders of the Department of Labor issued under Section 14 thereof. The Equal
Employment Opportunity Clause in Section 202, Paragraphs 1 through 7 of
Executive Order 11246, as amended, relative to equal employment opportunity and
the implementing rules and regulations of the office of Federal Agreement
Compliance and each 



                                       20
<PAGE>   21
party's Certificate of Compliance as related to Government Agreements are
incorporated herein by specific reference.

          21.    SUCCESSORS.

          This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their permitted successors and assigns. KACC may, but
shall not be obligated to, assign (including, without limitation, grant a
security interest in) this Agreement to or for the benefit of one or more of
its lenders, in which case this Agreement may be reassigned by such assignee or
collateral agent to third parties. No such assignment by KACC to or for the
benefit of one or more of its lenders or reassignment by such assignee or
collateral agent shall relieve KACC of any of its obligations hereunder. Buyer
may assign this Agreement in connection with a termination of the Partnership
Agreement to any person (including LCI or KACC), who acquires, by purchase or
otherwise, all or substantially all of the assets of Buyer provided that such
acquiring person shall not further assign this Agreement without KACC's
consent, and KACC may assign this Agreement to any successor-in-interest to the
Facility; provided that each such assignee agrees to become a party to this
Agreement. Except for the foregoing permitted assignments, this Agreement shall
not be assignable by either party without the prior written consent of the
other, which consent shall not be unreasonably withheld. Any assignment in
violation of this Agreement shall be void. In the event of any permitted
assignment (other than an assignment by KACC to or for the benefit of one or
more of it lenders or a reassignment by such assignee or collateral agent), the
assigning party shall be relieved of all future obligations of performance
hereunder, except to the extent such future performance relates to the period
prior to the assignment.

          22.    PATENT INDEMNITY.

          KACC shall defend any suit or proceeding brought against Buyer based 
on a claim that manufacture, use or sale of the Products sold by KACC
constitutes infringement of any United States Letters Patent, if notified
promptly in writing and given authority and such information and assistance as
KACC shall reasonably request (at KACC's expense) for the defense of same, and
KACC shall pay all damages and costs awarded against Buyer in such suit or
proceeding.

          23.    ATTORNEYS' FEES AND EXPENSES.

          If any litigation or arbitration shall be instituted in respect to 
this Agreement, the prevailing party shall be entitled to recover attorneys'
fees and other costs and expenses of 




                                       21
<PAGE>   22



litigation or arbitration.

          24.    ENTIRE AGREEMENT.

          This Agreement constitutes the entire understanding of the parties 
with respect to the subject matter hereof, and there are no other
understandings, representations or warranties of any kind except as expressly
set forth herein.

          25.    GOVERNING LAW.

          All questions relating to the validity, interpretation, or performance
of this Agreement shall be determined in accordance with the laws of the State
of Louisiana.

          26.    HEADINGS.

          Italicized headings used herein are for convenience only and have no
 legal effect.

          27.    TERMINATION UPON DEFAULT.

          Subject to Article 16 hereof, this Agreement may be terminated by (a) 
KACC, if Buyer has failed to make payments required hereunder within ten (10)
days following written notice from KACC with respect to such failure to pay, and
(b) either party hereto, if a material default shall be made by the other party
and the defaulting party fails to cure such material default within thirty (30)
days following written notice from the non-defaulting party, or within such
longer period following such notice as is reasonably necessary to cure such
default using diligent and good faith efforts, but in no event for a period in
excess of ninety (90) days. Notwithstanding the foregoing, no termination shall
occur under any circumstance with respect to matters disputed in good faith
until completion of the arbitration process described in Article 28 hereof.

          28.    ARBITRATION.

          In the event of a good faith dispute between the parties hereto as to
whether or not a party is in default in the due observance or performance of any
covenant, condition or obligation of such party hereunder, such dispute shall be
settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association, and judgment may be entered in any court
having jurisdiction thereof. Unless otherwise mutually agreed by the parties,


                                       22
<PAGE>   23
any such arbitration shall be conducted in New Orleans, Louisiana.

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.

                                            KAISER ALUMINUM & CHEMICAL
                                            CORPORATION,
                                            a Delaware corporation

Dated:  May 27th, 1997                      By/s/ Jeffrey W. Smith
                                              ----------------------------------
                                              Name:
                                              Its: Vice President



                                            KAISER LAROCHE HYDRATE PARTNERS,
                                            a Delaware general partnership,
                                            by its general partners: 
                                            KAISER ALUMINUM & CHEMICAL
                                            CORPORATION, a  Delaware corporation

Dated:        , 1997                        By/s/ E. P. Miller
        ------                                ----------------------------------
                                               Name:
                                               Its: KLHP Chairman



                                            LaROCHE INDUSTRIES INC.,
                                            a Delaware corporation

Dated:        , 1997                        By /s/ Vincent R. Gurzo
        ------                                 -----------------------
                                               Name: Vincent R. Gurzo
                                               Its:  Vice President 



                                       23
<PAGE>   24



                                                                    EXHIBIT A TO
                                    AMENDED AND RESTATED HYDRATE SALES AGREEMENT
<TABLE>
<CAPTION>
                             HYDRATE SPECIFICATIONS
                             ----------------------

CHEMICAL PROPERTIES (WEIGHT % ON DRY BASIS)   %TYPICAL*              MAXIMUM
-------------------                           ---------              -------
<S>                                           <C>                    <C>  
SiO2                                          0.009                  0.014

Fe2O3                                         0.006                  0.010

Na2O                                          0.28                   0.40

Free Moisture                                 0.10                   0.20

Acid Insols                                   0.03                   0.10

Caustic Sed                                   0.11                   0.30

Leachable Soda                                0.007                  0.010
</TABLE>

<TABLE>
<CAPTION>
PHYSICAL PROPERTIES       % MINIMUM           %TYPICAL*              % MAXIMUM
-------------------       ---------           ---------              ---------

Screens
<S>                       <C>                 <C>                       
+325 mesh                 92.0                94-97                  ---
+100 mesh                 ----                6.0                    15.0

Reflectance               70.0**              74**                   ---
</TABLE>


*        The parties acknowledge that although the typical percentages set forth
         above are more stringent than the maximum percentages allowed in
         Hydrate, such typical percentages are typically the amounts of the
         designated properties which have historically been present in Hydrate
         over an extended period of time. It is the intent of the parties that
         such typical percentages should continue to be reflected in Hydrate
         over an extended period of time, while the maximum percentages apply on
         a shipment-by-shipment basis.

**       Subject to adjustment pursuant to Section 3(d) hereof.


                                       A-1
<PAGE>   25


<TABLE>
<CAPTION>
                             WETCAKE SPECIFICATIONS
                             ----------------------

CHEMICAL PROPERTIES (WEIGHT % ON DRY BASIS) % TYPICAL*               MAXIMUM
-------------------                           ---------              -------
<S>                                           <C>                    <C>  
SiO2                                          0.009                  0.014

Fe2O3                                         0.006                  0.010

Na2O                                          0.28                   0.40

Free Moisture                                 8.0                    12.0

Acid Insols                                   0.03                   0.10

Caustic Sed                                   0.11                   0.30

Leachable Soda                                0.007                  0.010
</TABLE>

<TABLE>
<CAPTION>
PHYSICAL PROPERTIES       % MINIMUM           %TYPICAL*              % MAXIMUM
-------------------       ---------           ---------              ---------
<S>                       <C>                 <C>                       
Screens

   +325 mesh              92.0                94-97                  ---
   +100 mesh              ----                10.0                   20.0

Reflectance               70.0**              74**                   ---
</TABLE>



*        It is the intent of the parties that such typical percentages should
         continue to be reflected in Wetcake over an extended period of time,
         while the maximum percentages apply on a shipment-by-shipment basis.

**       Subject to adjustment pursuant to Section 3(d) hereof.


                                      A-2