Exhibit 10





            MEMORANDUM OF UNDERSTANDING ("MEMORANDUM
           OF UNDERSTANDING") ENTERED INTO AS OF THIS
             23RD DAY OF JULY, 1998 WITH RESPECT TO
         CONSENSUAL PLAN OF REORGANIZATION (THE "PLAN")
 BY AND AMONG RAYTECH CORPORATION ("RAYTECH" OR THE "DEBTOR"),
    THE OFFICIAL EQUITY COMMITTEE (THE "EQUITY COMMITTEE"),
       THE OFFICIAL CREDITORS' COMMITTEE (THE "CREDITORS'
    COMMITTEE"), THE GUARDIAN AD LITEM FOR FUTURE CLAIMANTS
   (THE "FUTURES REPRESENTATIVE"), THE STATE OF CONNECTICUT,
     DEPARTMENT OF ENVIRONMENTAL PROTECTION ("CONNECTICUT")
   AND THE UNITED STATES DEPARTMENT OF JUSTICE, ENVIRONMENTAL
           AND NATURAL RESOURCES DIVISION (THE "US")

I.   GENERAL POINT

     The parties hereto will utilize their best efforts to obtain
     Bankruptcy Court approval of this Memorandum of
     Understanding, but such approval shall not be a condition of
     the parties' agreement hereto.

II.  ECONOMIC TERMS

     (a)  All allowed administrative expense and priority claims
     of Raytech shall be paid out of the Raytech estate upon
     confirmation of the Plan or upon such other terms as may be
     agreed to by and among any such particular claimant and the
     parties hereto or as may be otherwise provided pursuant to
     the Bankruptcy Code.

     (b)  General unsecured creditors, through the vehicle of a
     trust (the "Trust") established pursuant to Section 524(g)
     of the Bankruptcy Code, shall receive in the aggregate, (i)
     90% of the equity in reorganized Raytech, and (ii) such
     excess cash as is agreed upon by the Creditors' Committee
     and the Debtor after consulting with the parties hereto and
     with their financial advisors, as available and not
     necessary to fund (a) administrative and priority claims and
     (b) the ongoing business activities  of reorganized Raytech. 
     All general unsecured claims including but not limited to
     the present and future asbestos related claims and
     governmental claims, shall be satisfied out of the
     distribution(s) from the Trust.  Any and all refunds of
     taxes paid or net reductions in taxes owing which result
     from deductions generated from transfers of the Raytech
     equity to the Trust shall be deemed excess cash whenever
     received and included in amounts received or to be received
     by the Trust.  In the event reorganized Raytech shall be
     sold while it still has unused tax deductions, carrybacks or
     carryforwards which would result in excess cash if and when
     enjoyed, the component of the sales price representing the
     present value of any such tax benefits shall be calculated
     and allocated to the Trust (whether in cash or stock) before
     the balance of the sales price is distributed to all equity
     holders.

     (c)  Existing Raytech equity shall receive 10% of the equity
     of reorganized Raytech.

     (d)  With respect to any shares that would be issued to
     Craig Smith, Bradley Smith, any person related to them, any
     entity related to them, or any assignee of any such person
     or entity, the parties will seek a prejudgment remedy and/or
     such other order from the Bankruptcy Court pursuant to which
     any such shares shall not be distributed until satisfaction
     of any and all claims reorganized Raytech or the Trust may
     have against Craig Smith, Bradley Smith, their families and
     related entities.

     (e)  The net recoveries from claims or any unsatisfied
     claims to recover assets from Raymark Industries, Inc.
     ("Raymark") including any assets recovered from Craig Smith
     and his family and other related entities or transferees
     (collectively, the "Raymark Assets") shall be treated as
     follows:  To the extent that Raymark Assets (i) in the hands
     of Raymark, were specifically for the benefit of personal
     injury, property damage or government environmental claims,
     such as insurance proceeds for their benefit, or (ii)
     consist of real property which was environmentally
     remediated by the federal, state, or any local governmental
     entity such that the federal, state, or any local
     governmental entity is entitled to a lien with respect to
     such property under applicable law, such assets shall be
     assigned to or prosecuted by or for the benefit of the
     Trust.  All other Raymark Assets shall be for the benefit of
     the Raytech estate or reorganized Raytech, as the case may
     be.

III. NON-ECONOMIC TERMS

     (a)  Raytech represents that it has given no release or
     guaranty to Craig Smith or Bradley Smith of claims by
     Raytech.

     (b)  A claims bar date will be set for general unsecured
     creditors other than holders of asbestos-related personal
     injury and death claims.  The parties hereto will all and
     jointly advise the Bankruptcy Court that no claims bar date
     other than for voting purposes is necessary for holders of
     asbestos-related personal injury and death claims.

     (c)  The Creditors' Committee and the Debtor, after
     consultation with the parties hereto, shall agree upon the
     most appropriate and economic approach to claims with
     respect to the existing Raytech and Raymark retirement and
     health plans, as well as any unfunded benefits remaining
     from any terminated pension plans, from the perspective of
     the Raytech estate as a whole.  

     (d)  Upon execution of the Memorandum of Understanding and
     approval by the Bankruptcy Court thereof, the following will
     occur:

               Raytech will no longer seek to make severance
               payments to Craig Smith and the parties hereto
               will oppose any request for payment thereof.

               Raytech and its subsidiaries will no longer seek
               to make the note payments to Raymark and the
               parties hereto will oppose any request for payment
               thereof.

               Raytech and the Equity Committee will join and/or
               support the attempt by the Creditors' Committee
               and the Futures Representative to bring the
               Raymark stock and/or assets within the estate of
               Raytech.

               The parties hereto will use their best efforts to
               have the Bankruptcy Court hold the existing
               estimation proceedings with respect to the
               asbestos related claims in abeyance pending
               confirmation of the Plan, at which time these
               proceedings will be dismissed. 

               The parties hereto will seek to obtain a
               standstill with respect to the remedies action
               appeal, pending confirmation of the Plan, at which
               time the appeal will be dismissed.

     (e)  The Plan will provide that the Equity Committee shall
     name one member to the board of directors of reorganized
     Raytech who shall serve for a term of 3 years; provided,
     however, that such term shall terminate in the event that
     the Trust sells its entire interest in reorganized Raytech
     and the purchaser or purchasers has offered to purchase the
     remaining shares outstanding at the same price and on the
     same terms and conditions as offered to the Trust.  The Plan
     will further provide that the Creditors' Committee, in
     consultation with the Debtor, the Futures Representative,
     Connecticut and the US, shall have the right to designate
     the remaining members of the Board of Directors of
     reorganized Raytech.  

     (f)  The parties will jointly request that, as part of the
     confirmation order, there be a finding to the effect that
     while Raytech's liabilities appear to exceed the reasonable
     value of its assets, the allocation of 10% of the equity to
     the existing equity holders is fair and equitable by virtue
     of the benefit to the estate in resolving complicated issues
     without further costly and burdensome litigation and the
     risks attendant thereto as well as the economic benefit to
     Raytech of emerging from bankruptcy without further delay,
     provided that such a finding shall not be a condition of the
     parties' agreement hereto.

     (g)  The Plan will provide for indemnification by
     reorganized Raytech of the members of the Equity Committee.

<PAGE>
     (h)  This Memorandum of Understanding may be executed in
     counterparts.


Raytech Corporation                Guardian Ad Litem For the
                                     Future Claimants


By:___________________________     By:__________________________
Its President and Chief 
  Executive Officer


Official Creditors' Committee      State of Connecticut
  of Raytech Corporation             Department of Environmental
                                     Protection
                                     Richard Blumenthal
                                     Attorney General


By:___________________________     By:__________________________
Its Chairman                          John M. Looney
                                      Assistant Attorney General


Official Equity Committee of       United States of America
  Raytech Corporation                Lois J. Schiffer
                                     Assistant Attorney General
                                     Environmental and Natural
                                     Resources Division
                                     United States Department
                                       of Justice
                                   
By:___________________________     
Its Chairman                       By:__________________________
                                      Henry S. Friedman
                                      Senior Attorney
                                      Timothy K. Webster
                                      Trial Attorney
                                      Environmental Enforcement
                                        Section
                                      U.S. Department of Justice

                                      Stephen C. Robinson
                                      United States Attorney
                                      District of Connecticut

                                   By:__________________________
                                      Deirdre A. Martini