LOIS J. SCHIFFER
Assistant Attorney General
Environment and Natural Resources Division
MICHAEL D. ROWE
Environmental Defense Section
Environment & Natural Resources Division
United States Department of Justice
P.O. Box 23986 L'Enfant Plaza Station
Washington, D.C. 20026-3986
Telephone: (202) 514-3144
Facsimile: (202) 514-2584

REGINA R. BELT
Environmental Enforcement Section
Environment and Natural Resources Division
United States Department of Justice
801 B Street Suite 504
Anchorage, Alaska 99501-3657
Telephone: (907) 271-3456
Facsimile: (907) 271-5827

Attorneys for the United States


                       IN THE UNITED STATES DISTRICT COURT

                               DISTRICT OF ALASKA


UNITED STATES OF AMERICA,
                                         Plaintiff,

               v.

ALASKA RAILROAD CORPORATION,
CHUGACH ELECTRIC ASSOCIATION,
INC., WESTINGHOUSE ELECTRIC
CORPORATION, SEARS, ROEBUCK AND
CO., MONTGOMERY WARD & CO., INC.,
J.C. PENNEY COMPANY, INC.,
BRIDGESTONE/FIRESTONE, INC.,
                                         Defendants.
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No.            A91-0589-CV (JWS)

PARTIAL CONSENT DECREE
                                                                   )

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 1

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                                TABLE OF CONTENTS


I.      BACKGROUND............................................  3

II.     JURISDICTION..........................................  5

III.    PARTIES BOUND.........................................  5

IV.     DEFINITIONS...........................................  6

V.      PAST RESPONSE, DOJ ENFORCEMENT, RI/FS,
        AND OVERSIGHT COSTS................................... 12

        o         PAYMENT AND REIMBURSEMENT
                 OF COSTS..................................... 12

        o         FAILURE TO COMPLY WITH REQUIREMENTS
                 OF CONSENT DECREE............................ 19

        o         COVENANTS BY PLAINTIFF;
                 RESERVATIONS OF RIGHTS....................... 21

       o         COVENANTS BY THE SETTLING PRPS............... 23

        o         EFFECT OF SETTLEMENT; CONTRIBUTION
                 PROTECTION: ACTIONS.......................... 25

VI.     AGREEMENTS REGARDING FUTURE COSTS..................... 28

VII.    SITE ACCESS AND COOPERATION........................... 36

VIII.   RETENTION OF RECORDS.................................. 37

IX.     NOTICES AND SUBMISSIONS............................... 40

X.      FEDERAL CONTRACTING................................... 42

XI.     ANTI-DEFICIENCY ACT PROVISION......................... 42

XII.    RETENTION OF JURISDICTION............................. 43

XIII.   INTEGRATION AND APPENDICES............................ 43

XIV.    LODGING AND OPPORTUNITY FOR PUBLIC COMMENT............ 43

XV.     SIGNATORIES AND SERVICE............................... 44



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                                  I. BACKGROUND
         A. The United  States of America  ("United  States"),  on behalf of the
Administrator  of the United States  Environmental  Protection  Agency  ("EPA"),
filed a complaint in this matter pursuant to Section 107(a) of the Comprehensive
Environmental Response,  Compensation,  and Liability Act of 1980, 42 U.S.C. ss.
9607(a), as amended ("CERCLA"), seeking reimbursement of response costs incurred
and to be incurred  for  response  actions  taken at or in  connection  with the
release or threatened release of hazardous  substances at the Standard Steel and
Metals  Salvage  Yard  Superfund  Site in  Anchorage,  Alaska (the "Site" or the
"Standard Steel Site").
         B.   Defendant   Chugach   Electric   Association,   Inc.   ("Chugach")
subsequently  entered into an Administrative  Order on Consent ("AOC") with EPA,
pursuant to which Chugach has performed a Remedial Investigation and Feasibility
Study ("RI/FS") for the Site and is performing  additional work at the Site. The
AOC, as amended by this Partial  Consent  Decree,  also  provides for payment by
Chugach of 38.5% of  response  costs  incurred  or to be  incurred by the United
States in the course of overseeing performance of the RI/FS and implementing the
AOC ("Oversight Costs" (defined in Section IV. below)).
     C. Some of the Defendants  have alleged that certain  federal  agencies and
instrumentalities  are among the classes of persons identified in Section 107(a)
of CERCLA as liable for response costs incurred with respect to the Site.  These
federal agencies and
CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 3

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instrumentalities (the "Settling Federal Entities") have entered into a separate
Funding  Agreement  with Chugach (the "First  Funding  Agreement"),  pursuant to
which the  Settling  Federal  Entities are  reimbursing  to Chugach 75% of RI/FS
Costs (defined in Section IV. below),  exclusive of Scrap Removal Costs (defined
in Section IV. below).  Pursuant to the First Funding  Agreement,  as amended by
this Partial consent Decree,  the Settling  Federal Entities have agreed to fund
61.5% of Oversight Costs.
         D. In order to gain  access to the Site to perform  the RI/FS,  a large
volume of scrap metal and debris was required to be removed from the Site,  and,
pursuant to a Second Funding Agreement for Removal of Scrap (the "Second Funding
Agreement"),  the Settling Federal Entities and all of the Defendants other than
Sears, Roebuck and Co. paid for the costs of that scrap removal.
         E. The United States and the Defendants ("the Parties") have now agreed
to settle the United  States' claims for Past Response Costs (defined in Section
IV. below),  DoJ Enforcement Costs (defined in Section IV. below), and Oversight
Costs,  and the Settling  Federal  Entities and the  Defendants  have decided to
allocate among themselves RI/FS Costs,  Oversight Costs, Past Response Costs and
DoJ Enforcement  Costs.  Further,  the Settling  Federal  Entities and Defendant
Alaska Railroad  Corporation have agreed to pay for a fixed percentage of Future
Costs  (defined in Section IV. below) and to allocate  those costs between them,
and the  remaining  Defendants  have further  agreed that this fixed  percentage
shall be the fair share of ARRC and the Settling Federal

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 4

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Entities in contribution for Future Costs.
         F. The  Defendants  do not admit any  liability  to the  United  States
arising out of the  transactions  or occurrences  alleged in the Complaint.  The
Settling  Federal  Entities  do  not  admit  any  liability  arising  out of the
transactions  or  occurrences  alleged  in  any  counterclaim  asserted  by  the
Defendants.
         G. The Parties agree,  and this Court by entering this Partial  Consent
Decree  ("Decree")  finds,  that this Decree has been  negotiated in good faith,
will avoid  prolonged and complicated  litigation  between and among the Parties
and that entry of this Decree is fair, reasonable, and in the public interest.
         NOW,  THEREFORE,  with the consent of the Parties to this Decree, it is
ORDERED, ADJUDGED, AND DECREED:
                                II. JURISDICTION
1. This Court has  jurisdiction  over the subject matter of this action pursuant
to 28 U.S.C. ss.ss. 1331 and 1345 and 42 U.S.C. ss.ss. 9607 and 9613(b) and also
has personal jurisdiction over the Defendants.  For purposes of this Decree, the
Parties  agree not to challenge  this  Court's  jurisdiction  to enter,  modify,
enforce and/or terminate this Decree.
                               III. PARTIES BOUND
         2. This Decree  shall apply to and be binding  upon the United  States,
and upon each of the Defendants and their successors and assigns.  Any change in
ownership or corporate or other legal status, including, but not limited to, any
transfer  of  assets  or real or  personal  property,  shall in no way alter the
status or

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 5

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responsibilities of the Defendants under this Decree.
                                 IV. DEFINITIONS
         3.  Unless  otherwise  expressly  provided  herein,  terms used in this
Decree which are defined in CERCLA or in  regulations  promulgated  under CERCLA
shall  have the  meaning  assigned  to them in  CERCLA  or in such  regulations.
Whenever  the  terms  listed  below  are  used in  this  Decree,  the  following
definitions shall apply:
         a.   "Administrative   Order  on  Consent"  or  "AOC"  shall  mean  the
         Administrative  Order  on  Consent  between  EPA and  Chugach  Electric
         Association,  Inc.  effective as of September  25, 1992,  as amended on
         July 6 and October 24, 1994,  pursuant to which Chugach has performed a
         Remedial  Investigation  and  Feasibility  Study for the Standard Steel
         Site and is performing  additional work at the Site.  Paragraphs  21.1,
         21.2,  21.3,  and  21.4 of the AOC are  amended  in part by  Paragraphs
         5.b.i.,  5.b.ii.,  5.d.,  5.e., and 5.f.i.  of this Decree.  Except for
         paragraphs  21.1, 21.2, 21.3, and 21.4, all of the terms and conditions
         of the AOC, as previously amended, are in full force and effect and are
         not affected by this Decree.  A copy of the AOC,  inclusive of the 1994
         amendments,  is  attached  as Appendix 1 to this  Decree.  b.  "Aliquot
         Share"  shall  mean  the  percentage  of  Past  Response   Costs,   DoJ
         Enforcement  Costs, RI/FS Costs and Oversight Costs that the Defendants
         and the Settling  Federal Entities have agreed each of them will pay or
         otherwise incur under this Decree.

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         c.       "CERCLA" shall mean the Comprehensive Environmental
         Response, Compensation, and Liability Act of 1980, as amended,
         42 U.S.C. ss.ss. 9601-9675.
         d.       "Credit" shall mean, as to Chugach, the difference, if
         any, between the amount of RI/FS Costs and Oversight Costs
         expended or owed by Chugach under the AOC and this Decree, as
         reduced by all amounts actually reimbursed to it under this
         Decree and the First Funding Agreement, as amended by this
         Decree, and Chugach's Aliquot Share (14.37%) of the aggregate
         of RI/FS Costs and oversight Costs.  As to the Settling
         Federal Entities, "Credit" shall mean the difference, if any,
         between the amount of RI/FS Costs expended by the Settling
         Federal Entities by way of payments to Chugach under the First
         Funding Agreement together with the amount of Scrap Removal
         Costs paid by them pursuant to the Second Funding Agreement,
         as reduced by all amounts actually reimbursed to the Settling
         Federal Entities under this Decree, and the amount of the
         Settling Federal Entities' Aliquot Share (61.50%) of RI/FS
         Costs.
         e.       "Day" shall mean a calendar day.  In computing any period
         of time under this Decree, where the last day of the period
         would fall on a Saturday, Sunday or federal holiday, the
         period shall run until the close of business the next working
         day.
         f.       "Decree" shall mean this Partial Consent Decree.
         g.       "Defendants" shall mean the Alaska Railroad Corporation

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 7

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         ("ARRC"), Chugach Electric Association, Inc. ("Chugach")
         Westinghouse Electric corporation ("Westinghouse"), Sears,
         Roebuck and Co. ("Sears"), Montgomery Ward & Co., Inc.
         ("Ward"), J.C. Penney Company, Inc. ("J.C. Penney"), and
         Bridgestone/Firestone, Inc. ("B/F").
         h.       "DoJ" shall mean the United States Department of Justice
         and any successor departments, agencies or instrumentalities
         of the United States.
         i.       "DoJ Enforcement Costs" shall mean, solely for purposes
         of this Decree, all costs, including but not limited to direct
         and indirect costs, that DoJ has paid or incurred in
         connection with the Site through the Effective Date of this
         Decree, including, but not limited to, costs of litigating
         this action and negotiating the AOC, and Interest on all such
         costs through the Effective Date, all of which shall be
         limited to the sum of $150,000.
         j.       "Effective Date" shall mean the date upon which this
         Decree is entered by the Court.
         k.       "EPA" shall mean the United States Environmental
         Protection Agency and any successor departments, agencies or
         instrumentalities of the United States.
         l.       "Expenditure Date" shall mean, as to Chugach, the date of
         each payment demand transmitted by Chugach to the Settling
         Federal Entities pursuant to the First Funding Agreement and,
         as to the Settling Federal Entities, the date each payment was
         issued by the Settling Federal Entities to Chugach pursuant to

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 8

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         the First Funding Agreement.
         m. "First Funding  Agreement" shall mean the agreement  between Chugach
         and the  Settling  Federal  Entities,  pursuant  to which the  Settling
         Federal Entities are funding 75% of the RI/FS Costs at the Site. A copy
         of the First Funding Agreement  constitutes  Appendix 2 of this Decree.
         n. "Future  Costs" shall mean all costs  recoverable  under CERCLA that
         are  incurred  with  respect to the Site after  issuance  by EPA of its
         Record of  Decision  ("ROD")  (as defined  below),  including,  but not
         limited  to: (1)  damages  for injury  to,  destruction  of, or loss of
         natural resources and costs of assessments  thereof; (2) costs incurred
         in designing and performing  the remedy  selected by EPA in the ROD, or
         any amended ROD, along with costs for long-term operation,  maintenance
         and monitoring;  and (3) the United States' enforcement costs and costs
         of overseeing  design and  performance of the remedy selected by EPA in
         the ROD,  or any amended  ROD.  Future  Costs  shall not include  costs
         incurred  pursuant to the AOC no matter when  incurred.  o.  "Interest"
         shall mean  interest  at the current  rate  specified  for  interest on
         investments  of the Hazardous  Substance  Superfund  established  by 26
         U.S.C.  ss.  9507,  compounded  annually on October 1 of each year,  in
         accordance with 42 U.S.C. ss. 9607(a). p. "Non-Funding  Settlers" shall
         mean those  Defendants  that did not sign or participate in the AOC and
         First Funding

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 9

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         Agreement  for  performance  of the  RI/FS  at the  Site,  but  are now
         signatories  to  this  Decree.  The  Non-Funding   Settlers  are  ARRC,
         Westinghouse,  Sears,  Ward, J.C. Penney, and B/F. q. "Oversight Costs"
         shall have the same  meaning as "Response  Costs" in paragraph  21.1 of
         the AOC, as amended on July 6, 1994, and includes costs EPA will incur,
         or has  incurred,  in  negotiating  and  defending  this Decree and the
         Partial Consent Decree lodged with the Court in this action on June 22,
         1994.  "Oversight  Costs"  shall  include  litigation  expenses EPA has
         incurred or will incur  through the Effective  Date of this Decree.  r.
         "Paragraph" shall mean a portion of this Decree identified by an Arabic
         numeral or an upper or lower case letter.  s. "Parties"  shall mean the
         United  States,  including  the  Settling  Federal  Entities,  and  the
         Defendants.  t. "Past Response Costs" shall mean all costs,  including,
         but not limited to, direct and indirect  costs that EPA has incurred in
         connection with CERCLA response actions related to the Site through and
         until December 31, 1991, i.e., $2,334,078.37,  plus Interest accrued on
         such  costs  from the date of filing of the  complaint  in this  action
         through the date that payment of Past Response  Costs is due under this
         Decree, minus $200,000. For purposes of this Decree only, Past Response
         Costs  shall not include  costs  incurred  by the United  States  after
         December 31, 1991.

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 10

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         u.       "Private PRPS" shall mean B/F, Chugach, J. C. Penney,
         Sears, Ward and Westinghouse.
         v.       "ROD" shall mean the Record of Decision for the Site
         issued by EPA on July 16, 1996.
         w.  "RI/FS  Costs"  shall mean all costs  incurred or to be incurred by
         Chugach and the Settling Federal  Entities  pursuant to the AOC and the
         First Funding  Agreement,  respectively,  plus Interest thereon accrued
         from each Expenditure Date, provided,  however, that RI/FS costs do not
         include  Oversight  Costs  (as  defined  above).  Nor do  they  include
         Chugach's or the Settling Federal Entities' attorneys' fees, stipulated
         and/or statutory penalties,  if any, or internal  administrative costs,
         including accounting costs and interest expenses. In addition,  because
         Scrap  Removal  Costs were  necessarily  incurred to gain access to the
         Site to perform the RI/FS,  the definition of RI/FS Costs shall include
         Scrap Removal Costs. x. "Scrap Removal Costs" shall mean the portion of
         RI/FS Costs  attributable  to the costs of eliminating  scrap metal and
         debris from the Site (including,  without  limitation,  characterizing,
         cleaning,  sorting,  loading,  overseeing  removal,   transporting  and
         disposing of scrap metal and debris) less the  revenues  received  from
         the sale of scrap  metal  removed  from the  Site,  in the total sum of
         $861,221.74.  y. "Second  Funding  Agreement"  shall mean the agreement
         among CEcon Corporation,  Woodward-Clyde Consultants,  and the Settling
         PRPS other than Sears, pursuant to which the Settling

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         PRPs other than Sears paid Scrap  Removal  Costs.  A copy of the Second
         Funding Agreement constitutes Appendix 3 of this
         Decree.
         z.       "Section" shall mean a portion of this Decree identified
         by a Roman numeral.
         aa.      "Settling Federal Entities" shall mean the Department of
         Transportation (including the Federal Railroad
         Administration), the Department of Defense (including the
         Defense Logistics Agency, the Defense Reutilization and
         Marketing Service, and the Army & Air Force Exchange Service),
         and any successor agencies, departments or instrumentalities
         of the United States.
         bb.      "Settling Potentially Responsible Parties" or "Settling
         PRPs" shall mean the Defendants and the Settling Federal
         Entities.
         CC.      "United States" shall mean the United States of America
         and its agencies, departments and instrumentalities, including
         the Settling Federal Entities.

          V. PAST RESPONSE, DOJ ENFORCEMENT, RI/FS, AND OVERSIGHT COSTS
                       PAYMENT AND REIMBURSEMENT OF COSTS
         4.       General.  Each of the Settling PRPS, by entering into
this Decree, agrees to resolve its liability for Past Response
Costs, DoJ Enforcement Costs, RI/FS Costs and Oversight Costs
through payment to the EPA Hazardous Substance Superfund and/or
reimbursement of the United States and of Chugach of its Aliquot
Share of the sum of those Costs.  The Aliquot Shares for the

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Settling PRPs are as follows:
                 o         ARRC                                        02.500%
                 o         B/F                                         00.416%
                 o         Chugach                                     14.370%
                 o         J.C. Penney                                 01.464%
                 o         Sears                                       12.960%
                 o         Settling Federal Entities                   61.500%
                 o         Ward                                        01.360%
                 o         Westinghouse                                05.430%
These  Aliquot  Shares are not binding or  admissible  in any future  proceeding
between the United States and any of the Defendants,  among the  Defendants,  or
between or among the  Defendants  and any third party,  except  that:  (a) these
Aliquot  Shares may be used to  enforce  the terms of this  Decree;  and (b) the
Aliquot Shares of the ARRC and Settling  Federal  Entities shall be binding with
respect to Future Costs.
         5.a.     Payment of Past Response Costs and DoJ Enforcement Costs.
                  i.       Within 60 days of the Effective Date, the Defendants
shall pay to the EPA Hazardous  Substance  Superfund  their  respective  Aliquot
Shares of Past Response Costs and DoJ Enforcement Costs. The Defendants shall be
jointly and severally  liable to the United States for payment of their combined
Aliquot Share of Past Response Costs and DoJ Enforcement  Costs, but have agreed
among  themselves to the allocation of those costs  according to the percentages
appearing in Paragraph 4. These  payments  shall be made in the manner set forth
in subparagraph 5.f.i. below.

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                  ii. Within 180 days of the Effective  Date, the United States,
on behalf of the Settling  Federal  Entities,  shall cause to be paid to the EPA
Hazardous Substance Superfund their Aliquot Share of Past Response Costs and DoJ
Enforcement Costs.
         b.       Payment of RI/FS and Oversight Costs.
                  i.       EPA and Chugach hereby amend those provisions of
paragraphs  21.1, 21.2 and 21.3 of the AOC pertaining to the process for payment
of  Oversight  Costs to provide  that EPA shall  submit a demand for  payment of
38.5% of  Oversight  Costs to Chugach  and shall  submit a demand for payment of
61.5% of Oversight Costs to the Settling Federal  Entities.  This amendment does
not alter the provisions of paragraphs 21.4 and 21.5 of the AOC, which relate to
the timing and process for  disputing  Oversight  Costs.  The United  States and
Chugach hereby amend paragraphs 1, 2 and 3.d. of the First Funding  Agreement to
provide that the Settling  Federal  Entities shall pay 61.5% of Oversight Costs,
as provided in Paragraph 5.e. below.
                  ii.  After all RI/FS Costs have been  incurred  and are known,
Chugach will provide the Non-Funding  Settlers with a summary of all those costs
incurred by it and the  Settling  Federal  Entities  pursuant to the AOC and the
First  Funding  Agreement,  as amended by this  Decree,  and the Second  Funding
Agreement (the "RI/FS Costs  Summary").  Pursuant to the AOC, as amended by this
Decree,  after all Oversight  Costs have been  incurred and are known,  EPA will
submit  its  summary  and  demand  for  oversight   Costs  and  the   supporting
documentation described in paragraph 21.4 of the AOC to

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Chugach and the Settling  Federal  Entities.  Within 30 days of receipt of EPA's
summary and demand for payment of  Oversight  Costs under the AOC, as amended by
this Decree, Chugach will provide the Non-Funding Settlers with a summary of all
Oversight  Costs owed by each of the  Non-Funding  settlers in  accordance  with
their Aliquot Shares (the "Oversight Costs Summary").
                  iii.  The  RI/FS  and  Oversight   Costs  Summaries  shall  be
accompanied  by copies of invoices for RI/FS work and EPA's summary of Oversight
Costs, respectively,  and demands for payment by each Non-Funding Settler of its
Aliquot  Share of these  costs.  The RI/FS Costs  Summary and demand for payment
shall specify the dollar  amounts due from each  Non-Funding  Settler to each of
Chugach and the Settling Federal Entities as reimbursement for RI/FS Costs after
reduction for payments made by that Non-Funding Settler (other than Sears) under
the  Second  Funding  Agreement,   plus  Interest  thereon  accruing  from  each
Expenditure  Date.  The  oversight  Costs  Summary and demand for payment  shall
specify the dollar amounts due from each Non-Funding  Settler to Chugach towards
payment by Chugach of 38.5% of Oversight Costs.  Sears'  reimbursements of RI/FS
Costs and Oversight Costs shall include its full Aliquot Share (12.96%) of those
costs, plus Interest thereon accruing from each Expenditure Date.
                  iv.      The United States and the Non-Funding Settlers may
not dispute or challenge any RI/FS Costs set forth in the RI/FS Costs Summary or
any  Oversight  Costs set forth in the  Oversight  Costs  Summary or any payment
demands for those costs, except on the
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basis of accounting  errors or, with respect to the RI/FS Costs Summary,  on the
basis that one or more costs are excluded  under the  definition  of RI/FS Costs
contained in this Decree,  or, with respect to the Oversight  Costs Summary,  on
the basis that one or more costs were not  demanded  by EPA.  Any such  disputes
shall first be presented to Chugach,  and the Parties  shall use best efforts to
resolve such disputes  informally  before seeking Court  resolution.  Nothing in
this  Decree  creates any right in the  Settling  PRPs to  challenge  the United
States' incurrence of oversight Costs.
         c.                Reimbursement of RI/FS and Oversight Costs by Non-
                           Funding Settlers.
                  i.  Within 30 days of receipt of the RI/FS  Costs  Summary and
demand for payment  pursuant to Paragraph 5.b., each of the Non Funding Settlers
shall make  payment  to Chugach  and the  United  States,  respectively,  of the
amounts due Chugach and the Settling Federal Entities as reimbursement for RI/FS
Costs.  Within 30 days of receipt of the oversight  Costs Summary and demand for
payment pursuant to Paragraph 5.b., each Non-Funding  Settler shall make payment
to Chugach of its Aliquot Share of oversight Costs.  Payments to Chugach and the
United States  hereunder shall be made in the manner set forth in  subparagraphs
5.f.ii. and iii. below, respectively.
                  ii.      If any Non-Funding Settler fails to reimburse
Chugach and/or the United States pursuant to subparagraph 5.c.i.
above, such unreimbursed amount(s) shall be credited against
Chugach's and/or the Settling Federal Entities' payments of
Oversight Costs, as provided in Paragraphs 5.d. and 5.e. below.  It

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is expressly  understood  and agreed that the United States shall have the right
to recover from defaulting  Non-Funding  Settlers all  unreimbursed  RI/FS Costs
and/or  Oversight Costs that have been credited under  Paragraphs 5.d. and 5.e.,
and the Parties hereby  contractually agree that the Non-Funding  Settlers shall
be  jointly  and  severally  liable to the United  States  for  payment of their
combined  aliquot  share  of  unreimbursed  RI/FS  Costs  and  Oversight  Costs,
excluding any stipulated penalties provided for in Paragraph 7.
         d.  Payment of  Oversight  Costs by Chugach.  Chugach  shall pay to the
United States, in the manner set forth in subparagraph  5.f.i.  below, 38.50% of
Oversight  Costs  within 90 days of  receipt  of EPA's  summary  and  demand for
payment of Oversight  Costs,  provided,  however,  that if, after  reimbursement
under the First  Funding  Agreement,  as amended by this Decree,  and  Paragraph
5.c.,  the amount paid by Chugach for RI/FS Costs and the amount owed by Chugach
for oversight Costs exceeds Chugach's Aliquot Share (14.37%) of the aggregate of
RI/FS Costs and Oversight Costs, then Chugach shall receive a Credit, as defined
in  Paragraph  3.d.,  which  shall be applied  to reduce  the  dollar  amount of
Chugach's  payment  for  oversight  Costs.  In the event that  Chugach's  Credit
exceeds  Chugach's  Aliquot Share (14.37%) of oversight Costs, EPA will take the
excess into consideration in any settlement of Chugach's  obligations for Future
Costs.
         e.       Payment of Oversight Costs by Settling Federal Entities.
Within 180 days after receipt of EPA's summary and demand for

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 17

<PAGE>



payment of oversight Costs, the United States, on behalf of the Settling Federal
Entities,  shall  cause  to be paid to the EPA  Hazardous  Substance  Superfund,
61.50% of Oversight  Costs,  provided,  however,  that if the amount paid by the
Settling Federal Entities for RI/FS Costs exceeds the Settling Federal Entities'
Aliquot  Share  (61.50%) of RI/FS Costs after  reimbursement  by the  NonFunding
Settlers  pursuant to Paragraph 5.c., then the Settling  Federal  Entities shall
receive a Credit, as defined in Paragraph 3.d., which shall be applied to reduce
the dollar amount of the Settling Federal Entities' payment for Oversight Costs.
         f.       Manner of Payment.
                  i. All  payments by  Defendants  to the United  States of Past
Response Costs, DoJ Enforcement  Costs, and Oversight Costs, and all payments of
RI/FS Costs  recovered by the United  States  pursuant to  subparagraph  5.c.ii.
above  shall  be  made to the  EPA  Hazardous  Substance  Superfund  by  FedWire
Electronic Funds Transfer  ("EFT") to the U.S.  Department of Justice account in
accordance with current EFT  procedures,  referencing EPA Region 10 CERCLA Site/
Spill I.D. Number 1078,  United States  Attorney's  Office  ("U.S.A.O.")  file #
93ZO186/001,  and DoJ Case #  90-11-3-810.  Payment  shall be made in accordance
with instructions provided to the Settling PRPs by the Financial Litigation Unit
of the U.S.A.O.  in the District of Alaska following lodging of this Decree. Any
payments  received by DoJ after 4:00 p.m.  Eastern Time shall be credited on the
next business day.  Defendants shall send notice to EPA and DoJ that payment has
been made in accordance with Section

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 18

<PAGE>



VIII (Notices and Submissions) and to Joe Penwell, U.S.
Environmental  Protection Agency - Region 10, 1200 Sixth Avenue MD-149, Seattle,
Washington 98101.
                  ii.      All reimbursements to Chugach made pursuant to
Paragraph  5.c.i.  shall  be by  EFT  to:  First  National  Bank  of  Anchorage;
Anchorage,  Alaska; ABA No. 1252-0006-0;  Attention: Linda Butterfield;  Credit:
Chugach Electric Association, Inc., Account No. 0110-475-1.
                  iii. All  reimbursements to the United States made pursuant to
Paragraph 5.c.i.  shall be by certified check made payable to Treasurer,  United
States of America, and shall be mailed or delivered to the Chief,  Environmental
Defense Section,  United States  Department of Justice,  Environment and Natural
Resources  Division,  P.O. Box 23986,  Washington,  D.C.  20026-3986,  and shall
reference DoJ # 90-11-3-844.  Alternatively, these reimbursements may be made by
FedWire  Electronic  Funds  Transfer in accordance  with the  instructions  that
appear as Appendix 4 to this Decree.
              FAILURE TO COMPLY WITH REQUIREMENTS OF CONSENT DECREE
         6.       Interest on Late Payments.  In the event that any payment
or  reimbursement  by the Defendants to the United States or to Chugach required
under Paragraphs  5.a.i.,  5.c. or 5.d. is not received when due, Interest shall
then begin to accrue or shall continue to accrue,  as applicable,  on the unpaid
balance through the date of payment. In the event that any payment by the United
States on behalf of the Settling  Federal Entities with respect to Past Response
Costs pursuant to Paragraph 5.a.ii. is not made
CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 19

<PAGE>



within 180 days of the Effective Date of this Decree, Interest shall continue to
accrue on the unpaid balance through the date of payment.  In the event that any
payment by the United  States on behalf of the Settling  Federal  Entities  with
respect to DOJ Enforcement Costs pursuant to Paragraph 5.a.ii is not made within
120 days of the Effective  Date or with respect to Oversight  Costs  pursuant to
Paragraph  5.e.  is not made  within 120 days of receipt  of EPA's  summary  and
demand for payment of Oversight  Costs,  Interest  shall then begin to accrue on
the unpaid balance through the date of payment.
         7.       Stipulated Penalties.
                  a.       If any Defendant fails to make a payment due to the
     United States  pursuant to Paragraph  5.a. by the required date or fails to
     make  reimbursements  pursuant to Paragraph  5.c. by the required date, the
     Defendant in question  shall pay, in addition to Interest,  $750 per day to
     the United States as a stipulated penalty for each day that such payment is
     late.
                  b. All  penalties  shall  begin  to  accrue  on the day  after
complete performance is due or the day a violation occurs, and shall continue to
accrue through the final day of correction of noncompliance or completion of the
activity.  Nothing  herein shall  prevent the  simultaneous  accrual of separate
penalties for separate violations of this Decree.
                  c. Stipulated  penalties are due and payable within 30 days of
receipt from EPA of a demand for payment of the  penalties  and shall be made in
the manner set forth in Paragraph 5.f.i.

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 20

<PAGE>



above. All payments shall indicate that the payment is for stipulated  penalties
and shall  reference  the name and address of the Party making the payment,  EPA
Region 10 CERCLA Site/Spill I.D. Number 1078, U.S.A.O.  file number 93ZO186/001,
and DoJ Case # 90-11-3-810.  Any transmittal letter(s)  accompanying the payment
of stipulated penalties shall be sent to EPA and DoJ as provided in Section VIII
(Notices and  Submissions)  and to Christopher  Cora,  Remedial Project Manager,
U.S.  Environmental  Protection  Agency,  Region 10, 1200 Sixth  Avenue  HW-124,
Seattle, Washington 98101.
                  d.  Notwithstanding  any other provision of this Section,  the
United States may, in its unreviewable discretion,  waive payment of any portion
of the stipulated penalties that have accrued pursuant to this Decree.
         8.  Enforcement  Costs.  If the United  States  takes action to recover
unreimbursed  amounts and enforce any Non-Funding  Settler's  obligation to make
reimbursements  under Paragraph  5.c., the NonFunding  Settler in question shall
pay the United States all costs,  including  all  attorneys'  fees,  incurred in
taking such action.
         9. Payments made under Paragraphs 6-8 shall be in addition to any other
remedies or sanctions available to Plaintiff by virtue of Defendants' failure to
comply with the requirements of this Decree.
                 COVENANTS BY PLAINTIFF; RESERVATIONS OF RIGHTS
         10.      Covenants by the United States.  In consideration of the
Settling PRPS' payments under the terms of this Decree, and except
as provided in Paragraph 11 below, the United States covenants not
to sue or take administrative action (including issuance of any

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 21

<PAGE>



administrative  order) against any of the  Defendants,  and EPA covenants not to
commence  administrative action (including issuance of any administrative order)
against the  Settling  Federal  Entities,  for claims  relating to payment of or
liability  for Past  Response  Costs,  DoJ  Enforcement  Costs,  RI/FS Costs and
Oversight  Costs.  As to each Settling PRP, these  covenants are  conditioned on
performance  by each  Settling PRP of its  obligations  undertaken by each under
paragraph 5 of this Decree. These covenants not to sue or to take administrative
action  extend only to the Settling  PRPs and do not extend to any other persons
or entities.
         11. Reservation of Rights by the United States. The covenants set forth
in Paragraph 10 above and  Paragraph  20.b.  below do not pertain to any matters
other than those expressly  specified therein.  The United States reserves,  and
this  Decree is without  prejudice  to,  all  rights the United  States may have
against the Defendants and all rights EPA may have against the Settling  Federal
Entities  with respect to any matters not covered in Paragraph 10 and  Paragraph
20.b., including, but not limited to:
                  a.       liability for failure to meet the requirements of
                           this Decree;
                  b.       criminal liability;
                  c.       liability of the Private PRPs for injunctive relief
                           or administrative order enforcement under
                           Section 106 of CERCLA, 42 U.S.C. ss. 9606, with
                           respect to matters not covered by this Decree;
                  d.       liability of ARRC for injunctive relief or

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 22

<PAGE>



                           administrative order enforcement under Section 106 of
                           CERCLA,  42 U.S.C.  ss.  9606,  with  respect to: (1)
                           activities  that  were the  subject  of a  unilateral
                           administrative order dated September 9, 1993; and (2)
                           requirements  of the ROD that only ARRC, as the party
                           in   possession   and   control  of  the  Site,   can
                           accomplish,   including,  but  not  limited  to,  the
                           recording and adherence to restrictions on the use of
                           the Site and the  inclusion of such  restrictions  in
                           any  deed,   lease   agreement  or  like   instrument
                           transferring a property interest in the Site;
                  e.       liability for failure to implement the AOC, as
                           amended by this Decree, in accordance with its
                           terms; and
                  f.       liability of the Private PRPs for Future Costs,
                           including but not limited to damages for injury to,
                           destruction of or loss of natural resources, or for
                           the costs of any natural resource damage
                           assessments.
                         COVENANTS BY THE SETTLING PRPS
         12.a. The Defendants hereby covenant not to sue and agree not to assert
any claims or causes of action  against the United States or its  contractors or
employees,  with respect to Past Response Costs,  DoJ Enforcement  Costs,  RI/FS
Costs or Oversight Costs, including, but not limited to:

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 23

<PAGE>



         i.       any direct or indirect claim for reimbursement from the
                  Hazardous Substance Superfund based on Section(s)
                  106(b)(2), 107, 111, 112 and/or 113 of CERCLA, 42 U.S.C.
                  ss.ss. 9606(b)(2), 9607, 9611, 9612, and/or 9613, or any
                  other provision of law;
         ii.      any claim arising out of response actions at the Site;
                  and
         iii.     any claims against the United States, including any
                  department, agency or instrumentality of the United
                  States, under Sections 107 or 113 of CERCLA, 42 U.S.C.
                  ss.ss. 9607 or 9613.
These covenants not to sue extend only to the United States and not to any other
persons or entities.
         b.  Notwithstanding  the provisions of Paragraph 12.a., but only to the
extent of ARRC's  liability as provided in Paragraph 4, ARRC  reserves any right
it may have to pursue the claim it has asserted against the United States in the
First Claim for Relief  appearing  in the "Answer  and  Counterclaims  of Alaska
Railroad  Corporation"  filed in this action on October 20, 1995,  together with
any  supporting  allegations  contained in paragraphs  1-14 thereof.  The United
States  reserves  its rights to defend  against  said claim,  including  but not
limited to its right to pursue defenses based upon lack of jurisdiction.
         c.       In consideration of the mutual obligations undertaken and
The payments by the defendants under the terms of this decree, each
defendant covenants not to sue any other defendant for contribution

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 24

<PAGE>



pursuant to Sections 107 or 113 of CERCLA,  42 U.S.C.  ss.ss.  9607 or 9613, any
provision of the Resource  Conservation  and Recovery  Act,  state  statutory or
common law, or any other  provision of law with regard to Past  Response  Costs,
DoJ Enforcement Costs, RI/FS Costs or Oversight Costs,  provided,  however, that
as to each  Defendant,  these  covenants are  conditioned on performance by each
Defendant  of the  obligations  undertaken  by each  under  Paragraph  5 of this
Decree.  These covenants not to sue extend only to the Defendants and not to any
other persons or entities.
         d. The  Settling  PRPs  agree  that each of them  shall  bear their own
costs,  including attorneys fees, for all matters covered by this Decree and all
negotiations  leading  to  entry of this  Decree,  provided,  however,  that the
prevailing  party in any action  between or among the  Defendants to enforce the
terms of this Decree shall be entitled to its costs,  including attorneys' fees,
incurred in pursuing the action.
         13.      Nothing in this Decree shall be deemed to constitute
approval or preauthorization of a claim within the meaning of
Section 111 of CERCLA, 42 U.S.C. ss. 9611, or 40 C.F.R. ss. 300.700(d).
             EFFECT OF SETTLEMENT; CONTRIBUTION PROTECTION: ACTIONS
         14.  Nothing in this Decree shall be construed to create any rights in,
or grant any cause of action  to, any  person  not a party to this  Decree.  The
Parties expressly reserve all rights  (including,  but not limited to, any right
to contribution),  defenses,  claims,  privileges,  demands and causes of action
which each of them may have with respect to any matter, transaction, or

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 25

<PAGE>



occurrence  relating  in any way to the  Site  against  any  person  not a party
hereto. Further, nothing in this Decree shall be construed as an indication that
the Settling PRPs accept or agree that any  particular  allocation,  whether set
forth herein or otherwise, is appropriate as to any person or entity not a party
to this Decree,  whether under Section 113(f) of CERCLA,  42 U.S.C. ss. 9613(f),
or otherwise, as to any matter, obligation, or liability.
         15. By entering into this Decree, the Settling PRPs have resolved their
liability  for Past  Response  Costs,  DoJ  Enforcement  Costs,  RI/FS Costs and
Oversight  Costs.  The Parties  agree,  and by  entering  this Decree this Court
finds,  that the Settling  PRPs are entitled,  as of the Effective  Date of this
Decree, to protection from contribution actions or claims as provided in Section
113(f)(2)  of CERCLA,  42 U.S.C.  9613  (f)(2),  for Past  Response  Costs,  DoJ
Enforcement Costs, RI/FS Costs and Oversight Costs.
         16.a.  The  Parties  agree  that with  respect to any suit or claim for
contribution brought by them or any of them against a person not a party to this
Decree  for  matters  related to this  Decree,  they will  notify  each other in
writing no later than 10 days prior to the initiation of such suit or claim. The
proceeds of any judgment in such action shall be shared among the Settling PRPs,
according to their Aliquot Shares  appearing in Paragraph 4, after  deduction of
costs incurred in the action,  including  attorneys' fees.  Disbursement of such
proceeds shall be made not later than thirty (30) days after their receipt.


CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 26

<PAGE>



         b. The  Defendants  also agree that,  with respect to any suit or claim
for contribution  brought against them or any of them by a person not a party to
this Decree for matters related to this Decree,  they will notify each other and
the United States in writing  within ten (10) days of service of the  complaint.
In  addition,  each  Defendant  shall notify EPA and DoJ within ten (10) days of
service or receipt of any Motion for Summary Judgment,  and within ten (10) days
of  receipt  of any order from a court  setting a case for  trial,  for  matters
related to this Decree.
         17. This Decree shall not be  construed to provide for judicial  review
of EPA  decisions  made in  connection  with the AOC, as amended by this Decree,
and/or the RI/FS,  nor shall it be deemed to provide for  preenforcement  review
under Section 113(h) of CERCLA,  42 U.S.C.  ss.  9613(h),  of any decision made,
order issued,  or other remedial or removal  response action taken by EPA unless
an action or  proceeding  to enforce such  decision or order,  or to compel such
action, is initiated by the United States on behalf of EPA.
         18. In any such subsequent  proceeding  initiated by the United States,
the Defendants agree that, except for matters expressly resolved in this Decree,
they shall not assert and may not  maintain  any  defense or claim  based on the
principles of waiver, res judicata, collateral estoppel, issue preclusion, claim
splitting, or other defenses based upon the contention that claims raised by the
United States in the subsequent  proceeding  were or should have been brought in
the instant action, provided, however, that nothing

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 27

<PAGE>



in this Paragraph affects the enforceability of the covenants by
the United States set forth in Paragraph 10 above or Paragraph
20.b. below.
                     VI. AGREEMENTS REGARDINGS FUTURE COSTS
         19.      Allocation and Payment of Future Costs
         a.       The Settling Federal Entities, or the United States on
their behalf, shall pay sixty-one and one-half percent (61.5%) of
Future Costs.
         b. Subject only to the reservation set forth in Paragraph  20.d.,  ARRC
shall pay two and one-half percent (2.5%) of Future Costs.  Nothing in Paragraph
20.d.  shall be construed  to reserve a claim by ARRC against the United  States
which exceeds ARRC's share of future costs as provided in the this Decree.
         c.  Notwithstanding  Paragraph  19.a.,  nothing in this Decree shall be
construed in any way as imposing an obligation on the Settling  Federal Entities
to perform any work at the Standard Steel Superfund Site.
         d. Unless otherwise agreed to in writing, in an agreement or agreements
among the United  States,  ARRC, and one or more of the Private PRPS, the United
States,  on behalf of the Settling  Federal  Entities,  and ARRC shall pay their
Aliquot Shares of Future Costs in the manner set forth below:
         i.       Upon receipt of statements from contractors or others
                  actually performing work or incurring Future Costs,
                  Parties having engaged such contractors or otherwise
                  performed work or incurred Future Costs ("Performing

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 28

<PAGE>



                  Parties")  shall  promptly  provide ARRC and the United States
                  with a statement  demanding  payment,  accompanied by invoices
                  that precisely  detail the work performed for which payment is
                  demanded (itemized by task), the expenses incurred,  the hours
                  required  for   performance  of  such  work  and  the  charges
                  therefore as billed to the Performing Parties and allocated to
                  ARRC and the  United  States in  accordance  with the terms of
                  this Decree.  For  purposes of this  Subparagraph  19.d.,  the
                  demand and  accompanying  documentation  shall be  referred to
                  collectively as a "Payment Demand."
         ii.      ARRC shall pay its Aliquot Share of Future Costs in
                  accordance with the same terms and conditions governing
                  the payment of Future Costs by Performing Parties, or
                  within 30 days after the date of each Payment Demand,
                  whichever is later.  ARRC shall pay interest on all
                  unpaid Future Costs due, which interest shall be in an
                  amount and shall begin to accrue in accordance with the
                  same terms and conditions governing the payment of
                  interest on Future Costs by the Performing Parties or
                  such interest shall begin to accrue 30 days after the
                  date of each Payment Demand, whichever is later.
         iii.     Parties  performing work or otherwise  incurring  Future Costs
                  shall  submit  Payment  Demands  to  the  United  States  on a
                  quarterly  basis,  by way of a project  coordinator the United
                  States shall hereinafter designate upon request.

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 29

<PAGE>



         iv.      Each Payment Demand made under subparagraph 19.d.iii
                  shall be accompanied by a certification executed by the
                  Performing  Parties as follows:  "Each Performing Party making
                  this Payment Demand certifies that the costs referenced in the
                  attached  invoice were properly  incurred under EPA oversight,
                  pursuant to [the consent decree or administrative  order under
                  which Future Costs have been incurred] and that the demand for
                  payment is  properly  made  pursuant  to the  Partial  Consent
                  Decree entered in United States v. Alaska Railroad Corp.,  No.
                  A91-589-CIV,  on or about  (date  of  entry  of this  Decree).
                  Payment by the United  States of all  amounts in the  attached
                  invoice  as  demanded  by [the  party or  parties  making  the
                  demand) shall be accepted as payment in full of all sums owing
                  under  the  Partial  Consent  Decree by the  Settling  Federal
                  Entities  for  services  performed  by,  or  at or  under  the
                  direction  of,  (the  party or  parties  making  the  demand),
                  together   with  any  services   billed  to  such  parties  by
                  subcontractors or others performing work,  through the closing
                  date reflected on the attached invoices."

         v.       The United States, on behalf of the Settling Federal
                  Entities, shall then pay its Aliquot Share of the Future
                  Costs as set forth in each Payment Demand, less any
                  amounts withheld or disputed in accordance with this
                  subparagraph d.v., as soon as reasonably practicable, but
                  in no event later than 180 days after the date of the
                  Payment Demand.  If the United States in good faith
                  questions or contests any invoiced fees or expenses, it
                  shall have the right to withhold payment of such disputed
                  amount; provided, however, that the United States shall
                  notify the party demanding payment in writing of any
                  disputed amount within 45 days of the date of such
                  Payment Demand and shall make a good faith effort to

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 30

<PAGE>



                  resolve  such  dispute.  In the event that the parties  cannot
                  resolve  the  dispute,  either  party  may  seek  the  Court's
                  assistance  by motion  not less than 90 days after the date of
                  the Payment  Demand in question.  Each payment  shall  include
                  Interest,  calculated  and added to each payment by the United
                  States,  accruing from the date of Payment  Demand to the date
                  of  payment.  For  purposes  of this  subparagraph,  "date  of
                  payment" shall mean the date that a check or electronic  funds
                  transfer  is  issued by the  United  States  to  satisfy  each
                  Payment Demand.
         vi.      Payments  made by the United  States and ARRC pursuant to this
                  Paragraph  shall  be  made  in  accordance  with  instructions
                  accompanying  the Payment  Demand either by  electronic  funds
                  transfer or by check.
         vii.     Parties making demands for payment to either ARRC or the
                  United States shall maintain all books, records,
                  documents, and other evidence, including descriptions of
                  accounting procedures and practices, necessary to
                  document each and every expenditure for which demand is
                  made for payment of an Aliquot Share throughout the time
                  during which remedial work is being performed at the
                  site, and for a period of 3 years thereafter.  Such
                  records shall be maintained in accordance with good
                  accounting practice and shall be made available to ARRC
                  or the United States at all reasonable times for
                  inspection, audit, and reproduction.  Any substantial

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 31

<PAGE>



                  costs  associated  with  auditing  or  reproduction  conducted
                  pursuant to this  subparagraph  19.d.vii shall be borne by the
                  United  States or ARRC as  appropriate.  In addition,  Parties
                  making  demands for payment  shall  notify ARRC and the United
                  States not less than 90 days before  documentation  maintained
                  pursuant  to  this  subparagraph  is to be  destroyed  for any
                  reason.  Access to, or copies of, the same documentation shall
                  be made  available  to ARRC or the United  States upon request
                  made within the specified 90 day period.
    viii.Not later  than 180 days  after any  Performing  Party  making  Payment
         Demands  pursuant  to  this  Paragraph  certifies  completion  of  work
         pursuant to an applicable consent decree or administrative  order, that
         Party shall  deliver to ARRC and to the United  States a full and final
         accounting  of the  expenditures  relating  to  conduct  of the work in
         question. The United States and ARRC may not dispute or challenge these
         expenditures  except on the basis of accounting  errors.  If the United
         States or ARRC in good faith  question or contest any invoiced  fees or
         expenses  on the  basis of  accounting  errors  revealed  in the  final
         accounting,  the party questioning  payment shall notify the Performing
         Parties in writing of any disputed amount within 45 days of delivery of
         the  accounting  and shall  make a good faith  effort to  resolve  such
         dispute. In the event that the parties cannot resolve the dispute,

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 32

<PAGE>



         either party may seek the Court's assistance by motion
         not less than 90 days after delivery of the accounting in
         question.
         20.      Covenants Regarding Future Costs; Effect of Future Costs
                  Allocation
         a. The Parties  agree,  and by entering  this Decree this Court  finds,
that in any allocation of Future Costs, the collective liability of the ARRC and
the  Settling  Federal  Entities  for  Future  Costs  shall be  limited to their
aggregate  Aliquot  Share  (64.00%).  This  aggregate  Aliquot  Share  shall  be
construed as a final  allocation for the ARRC and the Settling  Federal Entities
under Section 113(f) of CERCLA,  42 U.S.C.  ss. 9613(f),  with respect to Future
Costs. All contractual arrangements among the Settling PRPs, or any of them, for
funding of Future Costs shall  allocate  64.00% in the aggregate to the ARRC and
the Settling Federal Entities.
         b. In consideration of the mutual  obligations  undertaken  pursuant to
the terms of this  Decree and except as  provided  in  Paragraph  11 above,  the
United States  covenants  not to sue or take  administrative  action  (including
issuance of any  administrative  order)  against ARRC,  and EPA covenants not to
commence  administrative action (including issuance of any administrative order)
against the  Settling  Federal  Entities,  for claims  relating to payment of or
liability  for Future  Costs or to  performance  of work at the  Standard  Steel
Superfund  Site other than that which only ARRC, as the party in possession  and
control of the Site, can accomplish, provided, however, that these covenants are
conditioned

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 33

<PAGE>



on performance by ARRC and the Settling  Federal  Entities of their  obligations
under  Paragraph  19 of  this  Decree.  These  covenants  not to sue or to  take
administrative  action extend only to ARRC and the Settling Federal Entities and
do not extend to any other persons or entities.
         c. In consideration of the mutual  obligations  undertaken  pursuant to
the terms of this Decree,  the Private  PRPs each  covenant not to sue or assert
any claims or causes of action against ARRC and the Defendants each covenant not
to sue or assert  any  claims or causes of action  against  the  United  States,
including any department,  agency or  instrumentality  of the United States, for
claims relating to payment of or liability for Future Costs, including,  but not
limited to, any claims under Sections 107 or 113 of CERCLA,  42 U.S.C.  ss. 9607
or ss. 9613. These covenants not to sue, however, are conditioned on performance
by ARRC and the Settling Federal Entities of the obligations  undertaken by each
under  Paragraph 19 of this Decree.  These  covenants  not to sue extend only to
ARRC and the United States, including any department,  agency or instrumentality
of the United States, and not to any other persons or entities.  Nothing in this
subparagraph  c shall prevent the Private PRPs from seeking to enforce the terms
of this Consent Decree. Nothing in this Decree shall be construed as a waiver of
any of the Parties' rights,  if any, to seek costs,  including  attorneys' fees,
from a court in any proceeding brought to enforce the terms of this Decree.
         d.       Notwithstanding the provisions of Paragraph 20.c., ARRC

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 34

<PAGE>



reserves any right it may have to pursue the claim it has  asserted  against the
United  States in the First  Claim  for  Relief  appearing  in the  "Answer  and
Counterclaims  of Alaska Railroad  Corporation"  filed in this action on October
20, 1995, together with any supporting  allegations contained in paragraphs 1-14
thereof.  The United  States  reserves its rights to defend  against said claim,
including  but not  limited to its right to pursue  defenses  based upon lack of
jurisdiction.
         e. By entering into this Decree, ARRC and the Settling Federal Entities
have  resolved  their  liability  for Future Costs.  The Parties  agree,  and by
entering  this  Decree  this Court  finds,  that ARRC and the  Settling  Federal
Entities are entitled,  as of the Effective  Date of this Decree,  to protection
from contribution actions or claims as provided by CERCLA Section 113(f) (2), 42
U.S.C. ss. 9613(f)(2), for Future Costs.
         f.  Nothing in this  Decree is  intended  or shall be  construed  as an
indication that the Private PRPs have agreed to an allocation  among  themselves
under Section  113(f) of CERCLA,  42 U.S.C.  ss.  9613(f),  or  otherwise,  with
respect  to Future  Costs.  The  Private  PRPs  expressly  acknowledge  that the
financial  commitments in this Decree are without  prejudice to any position any
of them may take in the  course of  further  negotiations  or  litigation  among
themselves  regarding  allocation of, or contribution  for, Future costs and are
without admission that any particular allocation is appropriate or equitable for
Future Costs.  By entering  into this Decree,  the Private PRPs do not waive any
right, claim, privilege,

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 35

<PAGE>



cause of  action or  defense  they or any of them may have,  under  contract  or
otherwise,  against  each other with  respect  to  matters  not  covered by this
Decree.
                        VII. SITE ACCESS AND COOPERATION
         21.  Access.   ARRC  agrees  to  provide  the  United  States  and  its
representatives,  including EPA and its contractors, the State of Alaska and its
representatives,  and  the  Private  PRPs  and  their  representatives  who  are
performing  response  actions  under an  agreement  with or pursuant to an order
issued  by EPA,  access  at all  reasonable  times to the Site and to any  other
property to which  access is required for the  implementation  of the AOC or for
the  implementation  of the requirements of the ROD, to the extent access to the
Site or other  property is controlled by ARRC, for the purpose of conducting any
activity relating to the  implementation of the AOC or to the  implementation of
the requirements of the ROD, including, but not limited to:
                  1)       monitoring the work being performed;
                  2)       verifying any data or information submitted to the
                           United States;
                  3)       conducting investigations relating to contamination
                           at or near the Site;
                  4)       obtaining samples;
                  5)       assessing the need for, planning, or implementing
                           additional response action at or near the Site;
                  6)       inspecting and copying records, operating logs,
                           contracts or other documents maintained or

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 36

<PAGE>



                           generated by ARRC or its agents; and
                  7)       assessing compliance with any administrative order,
                           consent decree or other agreement relating to
                           performance of the remedy at the Site.
Nothing in this  Paragraph  or in  Paragraphs  22 and 23 of this Decree shall be
construed  to  require  ARRC to  incur  any  material  expense,  cost or loss in
furtherance of Section VII without allocation of such material expense,  cost or
loss pursuant to this Decree as a Future Cost.
         22.  Requirements Of The ROD Only ARRC Can  Accomplish.  ARRC agrees to
becomes a signatory to a subsequent  consent  decree for the limited  purpose of
implementing  requirements of the ROD that only ARRC can accomplish,  other than
access as addressed in Paragraph 21 above.
         23.      Cooperation.  The Parties shall make good faith efforts
to cooperate with each other in the conduct of any of the future
design, response, removal or remediation activities relating to the
Site.
                           VIII. RETENTION OF RECORDS
         24.  Until five (5) years from  completion  of  remedial  action at the
Standard Steel Site,  each  Defendant  shall preserve and retain all records and
documents now in its possession or control, or which come into its possession or
control, that relate in any manner to response actions taken at the Site through
the record of decision or the liability of any  Defendant  for response  actions
conducted and to be conducted at the Site, regardless of any

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 37

<PAGE>



corporate  retention  policy to the contrary.  Each Defendant shall preserve and
retain for ten (10) years from  completion  of  remedial  action all records and
documents  related to  implementation  of remedial design and remedial action at
the Site that are generated by or on behalf of such Defendant.
         25.  After  the  conclusion  of the  document  retention  period in the
preceding  paragraph,  the Defendants  shall notify EPA and DoJ at least 90 days
prior to the destruction of any such records or documents,  and, upon request by
EPA or DoJ, the  Defendants  shall deliver any such records or documents to EPA.
The Defendants may assert that certain documents,  records, or other information
are  privileged  under the  attorney-client  privilege  or any  other  privilege
recognized by federal law. If Settling Defendants assert such a privilege,  they
shall  provide  the  United  States  with  the  following:  1) the  title of the
document,  record,  or  information;  2) the date of the  document,  record,  or
information;  3) the name and title of the author of the  document,  record,  or
information;  4) the  name and  title  of each  addressee  and  recipient;  5) a
description of the subject of the document,  record, or information;  and 6) the
privilege asserted. However, no documents, reports, or other information created
or generated  pursuant to the  requirements  of this or any other consent decree
with  the  United  States  shall  be  withheld  on the  grounds  that  they  are
privileged. If a claim of privilege applies only to a portion of a document, the
document  shall be  provided to the United  States in redacted  form to mask the
privileged information only. The Defendants shall retain all

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 38

<PAGE>



records and documents  that they claim to be privileged  until the United States
has had a reasonable  opportunity  to dispute the  privilege  claim and any such
dispute has been resolved in the Defendants' favor.
         26.      By signing this Decree, each Defendant certifies
individually that, to the best of its knowledge and belief, it has:
     a. not altered,  mutilated,  discarded,  destroyed or otherwise disposed of
     any  records,  documents  or other  information  relating to its  potential
     liability  regarding the Site, after notification of potential liability or
     the filing of a suit against the Defendant regarding the Site; and
     b. fully complied with any and all EPA requests for  information  regarding
     the Site pursuant to Sections 104(e) and 122(e) of CERCLA, 42 U.S.C. ss.ss.
     9604(e) and 9622(e).
         27. Each  Settling  Federal  Entity  hereby  certifies  that (1) it has
complied,  and will  continue  to comply,  with all  applicable  Federal  record
retention laws, regulations,  and policies; (2) to the best of its knowledge and
belief,  after reasonable  inquiry,  it has not altered,  mutilated,  discarded,
destroyed or otherwise  disposed of any records,  documents or other information
relating to its potential  liability  regarding the Site since  notification  of
potential  liability by EPA or the filing of suit against it regarding the Site;
and (3) it has fully  complied  with any and all EPA  requests  for  information
pursuant to Sections 104(e) and 122(e) of CERCLA, 42 U.S.C.  ss.ss.  9604(e) and
9622(e), and Section 3007 of RCRA, 42 U.S.C. ss. 6927.

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 39

<PAGE>



                           IX. NOTICES AND SUBMISSIONS
         28.  Whenever  this  Decree  requires  written  notice to be given or a
document  to be sent by one  party  to  another,  it shall  be  directed  to the
individuals at the addresses  specified below, unless those individuals or their
successors  give  notice of a change to the other  parties in  writing.  Written
notice as specified herein shall constitute complete satisfaction of any written
notice  requirement of this Decree with respect to the United  States,  EPA, DoJ
and the Defendants, respectively.
As to EPA:

Lori L. Houck
Office of Regional Counsel
U.S. EPA Region 10 SO-155
1200 Sixth Avenue
Seattle, Washington 98101

As to the United States:

Chief, Environmental Enforcement Section
Environment and Natural Resources Division
U.S. Department of Justice
P.O. Box 7611
Ben Franklin Station
Washington, D.C. 20044
         Re:  DoJ # 90-11-3-810

Chief, Environmental Defense Section
Environment and Natural Resource Division
United States Department of Justice
P.O. Box 23986
Washington, D.C. 20026-3986
         Re:  DoJ # 90-11-3-844

As to the Alaska Railroad Corporation:

Phyllis Johnson
General Counsel
Alaska Railroad Corporation
P.O. Box 107500
Anchorage, Alaska 99510-7500


CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 40

<PAGE>



As to Bridgestone/Firestone:

James K. Vines                                       With a copy to:
General Counsel/Environmental               Heidi Hughes Bumpers
Bridgestone/Firestone Inc.                  Jones, Day, Reavis & Pogue
50 Century Boulevard                        1450 G Street, N.W. Suite 700
Nashville, TN 37214-8900                             Washington, D.C. 20005-2832

As to Chugach:

Carol A. Johnson                                     With a copy to:
General Counsel                             R. Paul Beveridge, Esq.
Chugach Electric Ass'n, Inc.                Heller, Ehrman, White &
5601 Minnesota Drive                           McAuliffe
P.O. Box 196300                             6100 Columbia Center
Anchorage, Alaska 99519-6300                701 Fifth Avenue
                                            Seattle, Washington 98104-7098

As to J.C. Penney:
Regular Mail                                         Via Courier
J.C. Penney Co., Inc.                       J.C. Penney Company, Inc.
Risk Management Department                  Risk Management Department
P.O. Box 10001                              6501 Legacy Drive, MS-1304
Dallas, Texas 75301-1304                    Plano, Texas 75024-3698

With copies to:
Walter G. Cowan, Jr.                        George Lyle, Esq.
J.C. Penney Co., Inc.                       Guess & Rudd
Legal Department                            510 L Street, Suite 700
Env't'l and Regulatory Section              Anchorage, Alaska 99501-1968
P.O. Box 1001 (regular mail)
Dallas, Texas 75301-1304
6501 Legacy Drive, MS-1106 (via courier)
Plano, Texas 75024-3698

As to Montgomery Ward:

Phillip D. Delk, Esq.
Vice President & Deputy General Counsel
Corporate Offices
Montgomery Ward & Co., Inc.
535 West Chicago Avenue, Suite 3N
Chicago, Illinois 60610

With copies to:
Sean Bezark, Esq.                            George Lyle, Esq.
Altheimer & Gray                             Guess & Rudd
10 South Wacker Drive                        510 L Street, Suite 700
Suite 4000                                   Anchorage, Alaska 99501
Chicago, Illinois 60606

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 41

<PAGE>



As to Sears:

Frederick J. Kulevich, Esq.                 With a copy to:
Sears Merchandise Group                     Bruce A. Bookman, Esq.
Department 766, A2-109B                     Perkins Coie Suite 300
3333 Beverly Road                           1029 West Third Avenue
Hoffman Estates, IL 60179                   Anchorage, Alaska 99501

As to Westinghouse:

Office of General Counsel                   With a copy to:
Westinghouse Electric Corp.                 Joseph L. Reece, Esq.
Westinghouse Bldg., Gateway Center          Davis Wright Tremaine
Pittsburgh, Pennsylvania 15222              Suite 1450
                                            550 W. 7th Street
                                            Anchorage, Alaska 99501

                             X. FEDERAL CONTRACTING

         29. No Defendant  shall  charge any costs  relating to this Decree to a
current or future  contract with the United States except in accordance  with 48
C.F.R. Part 31 and any applicable agency acquisition regulations.
                        XI. ANTI-DEFICIENCY ACT PROVISION
         30. Payments by the Settling Federal Entities,  or by the United States
on  their  behalf,  under  this  Decree  are  subject  to  the  availability  of
appropriated  funds.  No  provision of this Decree  shall be  interpreted  as or
constitute A commitment or requirement that the Settling Federal Entities or the
United States obligate or pay funds in contravention of the Anti-Deficiency Act,
31 U.S.C. ss.ss.  1341-1342,  1349-1350,  and 1511-1519, or any other applicable
federal law or regulation.
                         XII. RETENTION OF JURISDICTION
         31.      This Court shall retain jurisdiction over this matter for
the purpose of interpreting and enforcing the terms of this Decree.

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 42

<PAGE>



                        XIII. INTEGRATION AND APPENDICES
         32. This Decree and its appendices  constitute the final,  complete and
exclusive  agreement  and  understanding  among the Parties  with respect to the
settlement  embodied in this Decree.  The Parties  acknowledge that there are no
representations,  agreements,  or  understandings  relating  to  the  settlement
embodied in this Decree other than those expressly contained in this Decree.
         33. The following  appendices are attached to, but are not incorporated
into,  this Decree:  "Appendix 1" -- the AOC;  "Appendix 2" -- the First Funding
Agreement;  "Appendix 3" -- the Second Funding  Agreement;  and "Appendix 411 --
instructions for FedWire  Electronic Funds Transfers made pursuant to Paragraphs
5.c.i.  and 5.f.iii.  above.  In the event that any terms and provisions of this
Decree are  inconsistent or in conflict with the terms and provisions of the AOC
or the First Funding  Agreement,  the provisions of this Decree shall govern and
shall supersede the  inconsistent  provisions set forth in the AOC and the First
Funding Agreement.
                 XIV. LODGING AND OPPORTUNITY FOR PUBLIC COMMENT
         34. This Decree shall be lodged with the Court for a period of not less
than 30 days,  for public  notice and comment.  The United  States  reserves the
right to withdraw or withhold its consent to entry of the Decree if the comments
received  disclose  facts or  considerations  which  indicate that the Decree is
inappropriate,  improper,  or  inadequate.  If no  comments  are  received or no
changes are proposed in response to such comments,

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 43

<PAGE>



the Defendants consent to entry of the Decree without further
notice.
                           XV. SIGNATORIES AND SERVICE
         35.      Each undersigned representative of a Defendant and the
Assistant Attorney General of the Environment and Natural Resources
Division of the DoJ certifies that he or she is fully authorized to
enter into the terms and conditions of this Decree and to execute
and legally bind such party to this Decree.
         36. Each Defendant  hereby agrees not to oppose entry of this Decree by
this Court or to  challenge  any  provision  of this  Decree,  unless the United
States has notified the  Defendants in writing that it no longer  supports entry
of the Decree.
         37. No  modification  of this Decree  shall be binding  unless it is in
writing and approved by this Court.  Nothing herein shall be deemed to alter the
Court's  authority  to  supervise,   construe,  modify,  enforce,  terminate  or
reinstate the terms of this Decree.
         38. Each Defendant has identified, on the attached signature pages, the
name and address of an agent who is authorized  to accept  service of process by
mail on behalf of that  Party  with  respect  to all  matters  arising  under or
relating  to this  Decree.  Defendants  hereby  agree to accept  service in that
manner and to waive the formal service  requirements  set forth in Rule 4 of the
Federal Rules of Civil  Procedure and any applicable  local rules of this Court,
including, but not limited to, service of summons.

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 44

<PAGE>



IT IS SO ORDERED THIS _____ DAY OF ____________________, 19__.


                                           ------------------------------------
                                                    JOHN W. SEDWICK
                                              United States District Judge


CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 45

<PAGE>



THE UNDERSIGNED PARTIES enter into this Partial Consent Decree in
the matter of United States v. Alaska Railroad Corporation, Civil
No. A91-059 (D. Alaska) relating to the Standard Steel Superfund
Site.

Date:     10/5/96               /s/  Lois J. Schiffer
                                     LOIS J. SCHIFFER
                                     Assistant Attorney General
                                     Environment and Natural
                                     Resources Division
                                     U.S. Department of Justice
                                     Washington, D.C. 20530



                               /s/   Gina R. Belt for
                                     MICHAEL D. ROWE, Attorney
                                     Environmental Defense Section
                                     Environment and Natural
                                     Resources Division
                                     P.O. Box 23986  L'Enfant Plaza
                                     Washington, D.C. 20026-3986



                               /s/   Gina R. Belt
                                     REGINA R. BELT, Attorney
                                     Environmental Enforcement Section
                                     Environment and Natural
                                     Resources Division
                                     801 B Street  Suite 504
                                     Anchorage, Alaska  99501-3657

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 46

<PAGE>



Date:     9/18/96             /s/    Chuck Clarke
                                     CHUCK CLARKE
                                     Regional Administrator, Region 10
                                     U.S. Environmental Protection Agency



                             /s/     Lori L. Houck
                                     LORI L. HOUCK
                                     Assistant Regional Counsel, Region 10
                                     U.S. Environmental Protection Agency
                                     1200 Sixth Avenue  SO-155
                                     Seattle, Washinton 98101

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 47

<PAGE>



                                                     FOR THE DEFENDANTS:

For the Alaska Railroad Corporation:




Dated:    September 9, 1996          /s/  Robert S. Hatfield, Jr.
                                          Robert S. Hatfield, Jr.
                                          President and Chief Executive Officer


Agent for Service of Process:

Phyllis Johnson
General Counsel
Alaska Railroad Corporation
P.O. Box 107500
Anchorage, Alaska  99510-7500

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 48

<PAGE>



For Bridgestone/Firestone, Inc.:



Dated:    July 30, 1996         /s/  James K. Vines
                                 James K. Vines
                                 [title]   General Counsel - Environmental


Agent for Service of Process:

                  Heidi H. Bumpers, Esq.
                  Metropolitan Square
                  1450 G Street, N.W.
                  Washington, D.C.  20005-2088

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 49

<PAGE>



For Chugach Electric Association, Inc.:



Dated:  September 5, 1996                /s/  Eugene N. Bjornstad
                                              Eugene N. Bjornstad
                                              General Manager


Agent for Service of Process:

Eugene N. Bjornstad
General Manager
Chugach Electric Ass'n, Inc.
5601 Minnesota Drive
P.O. Box 196300
Anchorage, Alaska  99519-6300


CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 50

<PAGE>



For J.C. Penney Company, Inc.:



Dated:   September 12, 1996             /s/  Carl B. Seaholm
                                             Carl B. Seaholm
                                             Manager, Corporate Risk Management


Agent for Service of Process:

Guess & Rudd
510 L Street, Suite 700
Anchorage, Alaska  99501

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 51

<PAGE>



For Mongtomery Ward & Co., Inc.:



Dated:    9/19/96                      /s/  Phillip D. Delk

                                            Phillip D. Delk, Esq.
                                            Vice President &
                                            Deputy General Counsel


Agent for Service of Process:

Guess & Rudd
510 L Street, Suite 700
Anchorage, Alaska  99501

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 52

<PAGE>



For Sears, Roebuck and Co.:



Dated:    9/26/96                    /s/  Bobbie McGee Gregg

                                          Bobbie McGee Gregg
                                          Vice President - Law
                                          Sears, Roebuck and Co.

Agent for Service of Process:

Frederick J. Kulevich
Attorney
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, Illinois 60179

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 53

<PAGE>


For Westinghouse Electric Corporation:



Dated:  September 30, 1996          /s/ Samuel R. Pitts

                                        Samuel R. Pitts
                                        Vice President

Agent for Service of Process:

C T Corporation System
Suite 300
801 West Tenth Street
Juneau, Alaska  99801

CONSENT DECREE: STANDARD STEEL SUPERFUND SITE - 54

<PAGE>











                      APPENDIX 1 TO PARTIAL CONSENT DECREE
                  UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                    REGION 10


IN THE MATTER OF:

Standard Steel & Metals Salvage
Yard, Anchorage, Alaska

Chugach Electric Association, Inc.

         RESPONDENT.

Proceeding Under Sections 104, 106
120(e)(6), 122(a), and 122(d)(3)
of the Comprehensive Environmental
Response, Compensation, and
Liability Act, as amended 42
U.S.C. ss. ss.  9604, 9606,
9620(e)(6), 9622(a), and
9622(d)(3).
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)









U.S. EPA Docket
Nos.
1091-07-02-107 and
1091-07-01-120.
                                    )


                         ADMINISTRATIVE ORDER ON CONSENT
                  FOR REMEDIAL INVESTIGATION/FEASIBILITY STUDY



ADMINISTRATIVE ORDER ON CONSENT FOR
REMEDIAL INVESTIGATION/FEASIBILITY STUDY - 1               September 23, 1992

<PAGE>



                                TABLE OF CONTENTS

                                                                          Page


I.      Introduction.....................................................  4
II.     Jurisdiction.....................................................  4
III.    Parties Bound....................................................  5
IV.     Statement of Purpose ............................................  6
V.      Findings of Fact.................................................  7
VI.     Conclusions of Law............................................... 12
VII.    Notice to State.................................................. 12
VIII.   Work to be Performed............................................. 13
IX.     U.S. EPA'S Baseline Risk Assessment.............................. 16
X.      Modification of the Work Plan.................................... 17
XI.     Quality Assurance................................................ 19
XII.    Final RI/FS, Proposed Plan, Public Comment, Record
         of Decision, Administrative Record.............................. 19
XIII.   Progress Reports and Meetings.................................... 20
XIV.    Sampling, Access, and Data Availability
         /Admissibility.................................................. 21
XV.     Designated Project Coordinators.................................. 25
XVI.    Other Applicable Laws............................................ 27
XVII.   Record Preservation.............................................. 27
XVIII.  Dispute Resolution............................................... 27
XIX.    Stipulated Penalties............................................. 30
XX.     Force Majeure.....................................................33
XXI.    Reimbursement of Response and Oversight Costs.................... 35
XXII.   Financial Assurance, Insurance, and Indemnification.............. 38
XXIII.  Judicial Review.................................................. 41
XXIV.   Reservations of Rights........................................... 41
XXV.    Other Claims..................................................... 42
XXVI.   Effective Date and Subsequent Modification....................... 43
XXVII.  Satisfaction..................................................... 44
XXVIII. Separate Documents............................................... 44
XXIX.   Contingent Right to Withdraw..................................... 45


ADMINISTRATIVE ORDER ON CONSENT FOR
REMEDIAL INVESTIGATION/FEASIBILITY STUDY - 2               September 23, 1992

<PAGE>




                                 I. INTRODUCTION

                  1.1               This Administrative Order on Consent
     ("Consent  Order")  is  entered  into  voluntarily  by  the  United  States
     Environmental   Protection   Agency  ("U.S.   EPA")  and  Chugach  Electric
     Association,   Inc.   ("Respondent").   This  Consent  Order  concerns  the
     preparation  and  performance of a Remedial  Investigation  and Feasibility
     Study  ("RI/FS")  and  approved  Interim  Remedial  Actions or new  Removal
     Responses for the Standard  Steel & Metals Salvage Yard Superfund Site (the
     "Site" or the  "Standard  Steel  Site")  located at 2400  Railroad  Avenue,
     Anchorage, Alaska.
                                II. JURISDICTION
                  2.1               This Consent Order is issued under the
     authority vested in the President of the United States by any or all of the
     following:  Sections  104,  106,  120(e)(6),  122(a),  and 122(d)(3) of the
     Comprehensive Environmental Response,  Compensation,  and Liability Act, as
     amended, 42 U.S.C. ss.ss. 9604, 9606,  9260(e)(6),  9622(a), and 9622(d)(3)
     ("CERCLA").  This authority was delegated to the  Administrator of U.S. EPA
     on January 23, 1987, by Executive Order 12580, 52 Fed. Reg. 2926 (1987) and
     was further delegated to Regional  Administrators on September 13, 1987, by
     U.S. EPA  Delegation No.  14-14-C.  The authority was  re-delegated  to the
     Director of the U.S. EPA Region 10 Hazardous Waste Division,  by a Regional
     Redelegation order signed by the Regional Administrator on April 8, 1987.

ADMINISTRATIVE ORDER ON CONSENT FOR
REMEDIAL INVESTIGATION/FEASIBILITY STUDY - 3               September 23, 1992

<PAGE>



                  2.2 The Respondent agrees to undertake all actions required by
     this  Consent  order.  In any action by U.S.  EPA or the  United  States to
     enforce  the  terms  of this  Consent  Order,  Respondent  consents  to the
     authority  and  jurisdiction  of U.S.  EPA to issue or enforce this Consent
     Order.  Respondent  and U.S. EPA agree not to contest the validity or terms
     of this Consent Order,  or the procedures  underlying or relating to it, in
     any action brought by the United States to enforce its terms.
                               III. PARTIES BOUND
                  3.1 This Consent Order applies to and is binding upon U.S. EPA
     and upon the Respondent, its agents, successors, and assigns. Respondent is
     jointly and severally  responsible for carrying out all actions required of
     them by this Consent Order.  The  signatories  hereto certify that they are
     authorized  to execute and legally bind the parties they  represent to this
     Consent  Order.  No  change in the  ownership  or  corporate  status of the
     signatories  or of the Site shall alter their  responsibilities  under this
     Consent Order.
                  3.2  Respondent  shall provide a copy of this consent order to
     any proposed owner or successor in interest  before stock,  assets or other
     indicia of ownership in the entity are  transferred.  Respondent shall also
     provide a copy of this Consent  Order to each  contractor  hired to perform
     any work required under this Consent Order (the "Work"), and to each person
     representing  it with  respect  to the site or the Work.  Respondent  shall
     condition all contracts entered into for

ADMINISTRATIVE ORDER ON CONSENT FOR
REMEDIAL INVESTIGATION/FEASIBILITY STUDY - 4               September 23, 1992

<PAGE>



     performance of the work in conformity with the terms of this Consent Order.
     Respondent, or its contractors, shall provide written notice of the Consent
     Order to all  subcontractors  hired to  perform  any  portion  of the Work.
     Notwithstanding the terms of any contract,  Respondent shall be responsible
     for   ensuring   that   their   subsidiaries,    employees,    contractors,
     subcontractors, consultants and agents comply with this Consent Order.
                            IV. STATEMENT OF PURPOSE
                  4.1 In entering  into this Consent  Order,  the  objectives of
     U.S. EPA and the  Respondent  is: (a) to determine the nature and extent of
     contamination  and  any  threat  to  the  public  health,  welfare,  or the
     environment  caused by the  release  or  threatened  release  of  hazardous
     substances,  pollutants, or contaminants at or from the Site, by conducting
     a Remedial  Investigation;  (b) to determine and evaluate  alternatives for
     remedial action, if any, to prevent,  mitigate,  or otherwise respond to or
     remedy  any  release  or  threatened   release  of  hazardous   substances,
     pollutants,   or  contaminants  at  or  from  the  Site,  by  conducting  a
     Feasibility  Study;  (c) to conduct Interim Remedial Actions or new Removal
     Responses if proposed by Respondent  and approved by U.S. EPA as a means to
     effectuate  the RI/FS;  and (d) to recover  response  and  oversight  costs
     incurred by U.S. EPA with respect to the RI/FS and this Consent Order.
                  4.2               The activities conducted by Respondent under
     this  Consent  order  are  subject  to  approval  by U.S.  EPA and shall be
     conducted in accordance with the provisions of CERCLA, the

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     National  Oil and  Hazardous  Substance  Pollution  Contingency  Plan  (the
     "NCP"), 40 C.F.R. Part 300, and all applicable U.S. EPA guidances, policies
     and procedures.
                  4.3 Respondent shall provide all information necessary for the
     RI/FS.  U.S. EPA shall be responsible  for performance of the Baseline Risk
     Assessment  required for  completion  of the RI/FS (see Section IX) and for
     preparation  and  release of the  Proposed  Plan and the Record of Decision
     (the  "ROD") for the  remedial  action at the Site (see  Section  XII).  V.
     FINDINGS OF FACT
                  5.1 By signing and taking  actions  under this Consent  Order,
     Respondent does not necessarily  agree with the following  findings of fact
     in this Section and  conclusions of law in Section VI below.  Such findings
     and  conclusions do not  constitute  admissions of liability by Respondent,
     nor shall they be  admissible  in evidence  against the  Respondent  in any
     judicial or administrative proceeding other than a proceeding by the United
     States,  including  U.S. EPA, to enforce this Consent Order or any judgment
     relating to it.
                  5.2               The Standard Steel Site is located on a six
     and  two-tenths  (6.2) acre parcel of land at 2400 Railroad  Avenue,  in an
     industrialized area just north of downtown  Anchorage.  Over 121,000 people
     obtain drinking water from wells within three miles of the Site. The Site's
     northern border is adjacent to an Alaska Railroad right-of-way. Ship Creek,
     which  borders  the Site to the south,  is a salmon  migratory  stream.  An
     Alaska Department

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     of Fish and Game hatchery is located  approximately  200 yards  upstream of
     the Site.  Ship Creek is also used for  recreational  fishing and  provides
     fish for consumption by a transient  population located downstream from the
     Site.
                  5.3  The  United   States,   through  the   Federal   Railroad
     Administration   ("FRA"),   an  agency   within  the  U.S.   Department  of
     Transportation, or its predecessor agencies, owned the Site for many years.
     Since at least the  early  1960s,  parcels  within  the Site  were  leased,
     through a federal  entity known as the Alaska  Railroad,  to various  metal
     salvage and recycling businesses.
                  5.4               Pursuant to Section 604 of the Alaska
     Railroad  Transfer Act, 45 U.S.C.  ss. 1203,  in January  1985,  the Alaska
     Railroad  corporation,  a  State-owned  corporation,  received an exclusive
     license  to the Site and was  authorized  by  statute  to "use,  occupy and
     receive all benefits" of the property.  Pursuant to Section 604(d)(2)(A) of
     the  statute,  45 U.S.C.  ss.  1203(d)(2)(A),  the State  assumed all lease
     obligations of the Alaska Railroad.
                  5.5 The current lessee of the Site is Ben Lomond,  Inc., which
     entered into a 35-year lease  agreement with the Alaska Railroad in January
     1983. At the same time, Ben Lomond,  Inc.  subleased a large portion of the
     Site  to  Standard  Steel  &  Metals  Company  ("Standard  Steel"),  a sole
     proprietorship owned by Gerald Poirier. In April 1986, U.S. EPA closed most
     of the Site to public  access,  with the exception of a small portion which
     is

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     currently used and/or subleased by Ben Lomond,  Inc. and another small area
     which is used by Poirier for an office and scrap yard.
                  5.6 The Site has been  used for  salvaging  and  recycling  of
     ferrous and non-ferrous metals and lead-acid batteries since at least 1967.
     Activity  on the Site has  included,  without  limitation,  reclamation  of
     PCB-contaminated  electrical transformers,  incineration of transformer oil
     and copper cores, use of PCB oil in hydraulic equipment on-site, processing
     of various types of surplused equipment and drums which contained hazardous
     liquids,  such as  flammables,  corrosives,  oxidizers and waste oils,  and
     salvaging of various types of batteries.
                  5.7 Studies and  sampling  activities  conducted by the Alaska
     Department of Environmental  Conservation  ("ADEC") from approximately 1983
     to  1985,  and by U.S.  EPA in  1985,  indicated  the  presence  of PCBs in
     transformer fluids and in soils on and off-site.  PCB contamination as high
     as 165,000  parts per  million  ("ppm")  was found in soils  on-site;  soil
     samples for PCBs from roads on and off-site  ranged from traces to 220 ppm.
     Soil samples  on-site also  indicated  high levels of lead and  significant
     levels of  cyanide  and  trichlorobenzene.  Ash  samples  from the  on-site
     incinerator contained dioxin with Toxic Equivalent Factor ("TEF") values as
     high as 5.71 parts per  billion  ("ppb").  Off-site  migration  of PCBS was
     documented in stream sediment  sampling  conducted along Ship Creek,  which
     indicated 2.5 ppm PCBS  downstream  of the Site. A  groundwater  monitoring
     study demonstrated PCB contamination and organic

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     solvent  compounds in the shallow water table aquifer beneath the Site. The
     presence  of  thousands  of  lead-acid  batteries  on-site  also  suggested
     widespread lead contamination at the Site.
                  5.8 In May 1986,  U.S.  EPA  determined  that an imminent  and
     substantial  endangerment to the public health and  environment  existed at
     the Site. U.S. EPA thereafter conducted a three-phase removal action at the
     Site to remove the most  significant  known  contamination  and  sources of
     contamination  and to  secure  the  Site  for  long-term  cleanup.  Removal
     activities  during the first  phase,  conducted  during the summer of 1986,
     included:  staging of 185  transformers,  removal  of over 1000  gallons of
     PCB-contaminated  oil and 82 55-gallon  drums of RCRA  hazardous  materials
     (including  flammable liquids,  corrosives and oxidizers);  installation of
     four groundwater  monitoring  wells;  isolation of dioxin and furan wastes;
     construction  of an erosion  control wall along Ship Creek;  and fencing of
     the Site to prevent  public access and exposure.  Additionally,  a study on
     resident fish of Ship Creek and an initial PCB soil  sampling  program were
     conducted to establish areas of higher risk within the Site boundary.
                  5.9 The second phase of the removal action,  during the summer
     and  fall of 1987,  included  removal  and/or  recycling  of  approximately
     700,000 pounds of batteries and 10,450 gallons of waste oil. Large portions
     of the Site were  cleared  of scrap,  which was  repositioned  on-site.  An
     estimated 1600 cubic yards of PCB-contaminated soil were stockpiled on-site
     and

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     protected with a concrete fiber cap.
                  5.10  The  third  and  final  phase  of  the  removal  action,
     conducted in 1988,  resulted in: sealing the  stockpiled  soil and severely
     contaminated  ground  surfaces  with  shotcrete  to limit  exposure  risks;
     overpacking  of drums,  cans and other  containers of hazardous  materials;
     and,   reworking  and   strengthening  the  security  fence.  The  On-Scene
     Coordinator's  ("OSC") Final Report,  received in December 1988, summarized
     the  status of the work  completed  and the soil and water  data  collected
     during the removal action.
                  5.11              On July 14, 1989, U.S. EPA proposed the Site
     for inclusion on the National  Priority List  ("NPL").  54 Fed. Reg.  29820
     (July 14, 1989). The Site was listed on the NPL on August 30, 1990. 55 Fed.
     Reg. 35502 (August 30, 1990).
                  5.12             Respondent Chugach Electric Association, Inc.
     arranged for  disposal to the Site of  electrical  transformers  containing
     PCB-contaminated   oil.  U.S.  EPA  has  identified   another   potentially
     responsible  party not a party to this  Consent  Order  that  arranged  for
     disposal to the Site of electrical transformers containing PCB-contaminated
     oil. U.S. EPA has  identified  other  potentially  responsible  parties not
     parties to this  Consent  Order which  arranged for disposal to the Site of
     lead-acid batteries.
                  5.13              Not all persons identified as potentially
     responsible  parties for the Site are  Respondents  in this Consent  Order.
     Certain federal agencies,  including the U.S. Department of Transportation,
     (including the Federal Railroad

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     Administration)  and U.S.  Department  of Defense  (including  the  Defense
     Logistics Agency, and the Defense Reutilization and Marketing Service), are
     paying a portion of the costs of the RI/FS  pursuant to a separate  Funding
     Agreement  with  the  Respondent.  Other  potentially  responsible  parties
     identified for the Site are not participating in this Order.
                  5.14  Hazardous  substances at the site include lead and other
     metals,   PCBS,  dioxins,   trichlorobenzene   and  other  organic  solvent
     compounds.  Groundwater  monitoring  data  indicate  contamination  on- and
     off-Site.
                  5.15 Actual and/or potential contaminant release and migration
     pathways  include,  but are not limited to,  release and  transport of soil
     contaminants into the groundwater, surface water, and air.
                             VI. CONCLUSIONS OF LAW
                  6.1               The Site is a "facility" as defined in
     Section 101(9) of CERCLA, 42 U.S.C. ss. 9601(9).
                  6.2 Major  contaminants  identified  at the Site include lead,
     PCBs and dioxin,  each of which is a  "hazardous  substance"  as defined in
     Section 101(14) of CERCLA, 42 U.S.C. ss. 9601(14).
                  6.3 The presence of hazardous  substances  at the Site, or the
     past,  present, or potential  migration of hazardous  substances  currently
     located at or emanating from the Site,  constitute actual and/or threatened
     "releases" as defined in Section 101(22) of CERCLA, 42 U.S.C. ss. 9601(22).

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                  6.4               Respondent is a "person" as defined in
     section  101(21) of CERCLA,  42 U.S.C.  ss.  9601(21),  and is "potentially
     responsible parties" within the meaning of sections 104, 106, 107, 1-20 and
     122 of CERCLA, 42 U.S.C. ss.ss. 9604, 9607, 9606, 9620, and 9622.
                  6.5               The actions required by this Consent Order
     are:  necessary to protect the public health or welfare or the  environment
     and in the public interest,  42 U.S.C. ss. 9622(a);  consistent with CERCLA
     and the NCP,  42 U.S.C.  ss.  9604(a)(1)  and  9622(a);  and will  expedite
     effective remedial action and minimize litigation, 42 U.S.C. ss. 9622(a).
                            VII. NOTICE TO THE STATE
                  7.1 By providing it with a copy of this  Consent  Order,  U.S.
     EPA is  notifying  the State of Alaska  that  this  Consent  Order is being
     issued and that U.S. EPA is the lead agency for  coordinating,  overseeing,
     and enforcing the response actions required by this Consent Order.
                           VIII. WORK TO BE PERFORMED
                  8.1 All Work shall be under the direction and supervision of a
     qualified  contractor  with a minimum of five (5) years of experience  with
     CERCLA  and  RCRA  investigations  who  is  familiar  with  applicable  EPA
     guidances (see Paragraph 8.2 below) and with  environmental  conditions and
     standards in Alaska. Before the Work is begun, Respondent shall notify U.S.
     EPA  in  writing  of  the  identity  and  qualifications  of  the  proposed
     supervising  contractor and the  subcontractors and laboratories to be used
     in

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     carrying  out the  Work.  The  qualifications  of such  personnel  shall be
     subject to U.S. EPA review,  for  verification  and approval that they meet
     technical background and experience requirements. However, the Respondent's
     initial  supervising  contractor,  Woodward-Clyde  Consultants,  is  hereby
     approved. During the course of the RI/FS, Respondent shall notify U.S. EPA,
     in writing,  of any changes or additions in the  contractors  used to carry
     out the Work and shall provide their names, titles and qualifications. U.S.
     EPA shall have the same right to approve such  changes and  additions as it
     has with respect to the original contractor proposed by Respondent.
                  8.2 Respondent shall conduct all activities for development of
     the  RI/FS  listed  in and  according  to the  schedule  set  forth  in the
     Statement of Work ("SOW"),  which is attached  hereto as Appendix 1 to this
     Consent Order and incorporated by reference herein.  All such work shall be
     conducted  in  accordance  with CERCLA,  the NCP,  and U.S. EPA  guidances,
     including,  but not  limited  to, the  "Guidance  for  Conducting  Remedial
     Investigations  and  Feasibility  Studies under CERCLA" (OSWER  Directive #
     9355.3-01)  and "Guidance for Data  Useability in Risk  Assessment"  (OSWER
     Directive  #9285.7-05),  as these  guidances  may be amended or modified by
     U.S.  EPA. The specific  tasks,  schedules  and list of  deliverables  that
     Respondent  is to  perform  and  provide  are  described  more fully in the
     attached SOW.
                  8.3               Unless otherwise specified, if U.S. EPA
     disapproves of or requires revisions to any deliverable, in whole

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     or in part,  Respondent  shall  amend  and  submit  to U.S.  EPA a  revised
     deliverable  which is responsive to all U.S. EPA's comments,  within thirty
     (30) days of receiving  U.S.  EPA's  comments,  unless the U.S. EPA Project
     Coordinator determines additional testing or analysis is needed pursuant to
     Paragraph 10.1 herein,  in which case Respondent shall amend and submit the
     revised   deliverable   within  the  period   agreed  to  by  the   Project
     Coordinators.  For purposes of this Consent  Order,  day means calendar day
     unless otherwise noted.
                  8.4 U.S. EPA reserves the right to comment on, modify,  and/or
     direct changes to be made by Respondent in all deliverables.  At U.S. EPA's
     request,  Respondent must fully correct all deficiencies  and/or respond to
     all U.S. EPA's comments in subsequent or resubmitted deliverables.
                  8.5 In the event that  Respondent  amends or revises a report,
     plan,  or other  submittal  upon  receipt of U.S. EPA comments and U.S. EPA
     subsequently  disapproves  the revised  submittal,  because the resubmitted
     item does not reflect U.S. EPA's  directions for changes,  Respondent shall
     be deemed to be in violation  of this  Consent  Order and U.S. EPA may seek
     stipulated or statutory  penalties,  and/or may seek any other  appropriate
     relief.  It is agreed and understood  that  disapproval of any submittal is
     subject to the dispute resolution procedures contained in Section XVIII.
                  8.6               Neither failure of U.S. EPA to expressly
     approve or disapprove Respondent's submissions within a specified

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     time period(s), nor the absence of comments, shall be construed as approval
     of such  submissions  by U.S. EPA. U.S. EPA will provide  written notice to
     the Project  Coordinator  when a  deliverable  is approved or  disapproved.
     Specific  tasks and  deliverables  identified  in the SOW require  U.S. EPA
     approval  before  further  work may  proceed.  Other than the  specifically
     identified  tasks  and   deliverables   pending  approval  or  disapproval,
     Respondent shall proceed with all other tasks,  deliverables and activities
     in accordance  with the schedules set fort,i in the Sow or required by this
     Consent  Order.  U.S.  EPA  reserves  the  right  to stop  Respondent  from
     proceeding  further,  either  temporarily  or  permanently,  on  any  task,
     activity,  or deliverable  set forth in the SOW or required by this Consent
     Order at any point during the RI/FS.
                  8.7  Any  hazardous   substance,   pollutant  or   contaminant
     transferred off-site as hazardous waste under this order must be taken to a
     facility acceptable under the Off-Site Policy (OSWER Directive No. 9834.11,
     November  13, 1987) in  accordance  with  Section  121(d)(3) of CERCLA,  42
     U.S.C. ss.  9621(d)(3).  Prior to any off-site  shipment of hazardous waste
     from the  Site to an  out-of-state  hazardous  waste  management  facility,
     Respondent  shall  provide  written  notification  of such  shipment to the
     appropriate state environmental official in the receiving state and to U.S.
     EPA's  Project  Coordinator,   provided,  however,  that  the  notification
     requirement  shall  not  apply  when  the  total  volume  of such  off-site
     shipments will not exceed ten

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     (10) cubic yards.
                           (a) The off-site  shipment  notification  shall be in
         writing and shall include the following  information:  (1) the name and
         location of the facility to which the  hazardous  substances  are to be
         shipped;  (2) the type and quantity of the  hazardous  substances to be
         shipped;  (3) the expected  schedule for the shipment of the  hazardous
         substances; and (4) the method of transportation.
                           (b) Respondent  shall notify the receiving  state and
         U.S. EPA of major changes in the shipment  plan,  such as a decision to
         ship the  hazardous  substances  to  another  facility  within the same
         state, or to a facility in another state.
                           (c)     Respondent shall provide written verification
         to U.S. EPA that such shipment was received.
                     IX. U.S. EPA'S BASELINE RISK ASSESSMENT
                   9.1 U.S. EPA will perform the Baseline Risk
     Assessment  required  for the  completion  of the RI/FS.  Respondent  shall
     support  U.S.  EPA  in  this  effort  by  providing  the   information  and
     deliverables required in the SOW. The major components of the Baseline Risk
     Assessment  include  contaminant   identification,   exposure   assessment,
     toxicity assessment and human health and ecological risk  characterization.
     U.S.  EPA will  respond to all  comments on the  Baseline  Risk  Assessment
     during the formal comment period on the Record of Decision.
                  9.2               U.S. EPA will provide sufficient information

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     concerning  baseline risks in a timely fashion so that Respondent can begin
     drafting the  Feasibility  study and meet the  schedules  in the SOW.  This
     information may be in two memoranda.  One memorandum will include a list of
     the chemicals of concern for human health and ecological effects; the other
     will list the current and  potential  exposure  scenarios  and the exposure
     assumptions and exposure point concentrations that U.S. EPA plans to use in
     the Baseline Risk Assessment.
                        X. MODIFICATION OF THE WORK PLAN
                  10.1 If at any  time  during  the  RI/FS  process,  Respondent
     identifies a need for  additional  data or work beyond that required in the
     approved Work Plan, a memorandum documenting the need for such data or work
     shall be submitted to the U.S. EPA Project  coordinator.  U.S.  EPA, by its
     Project  Coordinator,  in its sole discretion,  will determine whether such
     additional data or work are to be incorporated into subsequent  reports and
     deliverables required in the SOW.
                  10.2  In the  event  of  conditions  at  the  Site  posing  an
     immediate threat to human health or welfare or the environment,  Respondent
     shall notify U.S. EPA and the state immediately upon becoming aware of such
     conditions.  In the event of unanticipated or changed  circumstances at the
     Site that may pose an immediate  threat to human health,  or welfare or the
     environment,  Respondent  shall notify the U.S. EPA Project  Coordinator by
     telephone within twenty-four (24) hours of discovery of such circumstances.
     In addition to the authorities

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     in the NCP, U.S. EPA may require  Respondent to make appropriate  responses
     to eliminate the immediate threat. After the immediate threat is eliminated
     to U.S. EPA's  satisfaction,  U.S. EPA may determine that the unanticipated
     or  changed  circumstances  warrant  changes  in the  Work  Plan.  In  such
     circumstance,  U.S.  EPA may  modify or amend the Work  Plan,  in  writing,
     pursuant to Paragraph  10.4.  Respondent  thereafter  shall be bound by the
     Work Plan as modified or amended.
                  10.3 U.S. EPA may determine  that in addition to tasks defined
     in the approved Work Plan  (including any approved  modification  thereto),
     other work may be necessary to accomplish  the  objectives of the RI/FS set
     forth in the SOW. If it determines  that such  additional  work is required
     for a complete  RI/FS,  U.S. EPA may request that  Respondent  perform this
     additional  work.  Within  fourteen  (14)  days of  receipt  of U.S.  EPA's
     request,  Respondent shall either confirm their  willingness to perform the
     additional  work,  in  writing,  to  U.S.  EPA,  or  shall  invoke  dispute
     resolution  pursuant to Section XVIII of this Consent Order.  If Respondent
     agrees to perform the additional work or if the dispute  resolution process
     results  in an  adverse  decision  for  the  Respondent,  Respondent  shall
     implement the additional  work  according to the standards,  specifications
     and schedule set forth or approved by U.S. EPA in a written modification or
     supplement to the Work Plan. In the event  Respondent  does not perform the
     additional  work or such work is not completed to U.S. EPA's  satisfaction,
     U.S. EPA may invoke any

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     enforcement authority provided for in CERCLA, as described in
     Section XVIII.
                  10.4 The  following  modifications  or changes  may be made by
     written  agreement  of  the  Project  Coordinators:   (1)  technical  field
     modifications  to the  Work  Plan  and  the  Sampling  Analysis  Plan;  (2)
     modifications  to the  schedules for  deliverables  in the SOW; and (3) any
     other  change  to the RI or FS  Work  Plans,  not  otherwise  addressed  in
     Paragraphs 10.2 and 10.3 above.  Modification to the final  completion date
     of the RI/FS contained in the SOW may be made only by the written agreement
     of all parties to this Consent Order.
                              XI. QUALITY ASSURANCE
                  11.1  Respondent  shall  assure that Work  performed,  samples
     taken and analyses  conducted  conform to the  requirements of the SOW, and
     the quality  assurance  requirements in the approved Work Plan.  Respondent
     will assure that field personnel used by it are properly trained in the use
     of field equipment and in chain-of-custody procedures.
                 XII. FINAL RI/FS, PROPOSED PLAN, PUBLIC COMMENT
                      RECORD OF DECISION, ADMINISTRATIVE RECORD
                  12.1              In accordance with CERCLA and the NCP, U.S.
     EPA retains the  responsibility  for the release to the public of the final
     RI/FS  report  and for the  preparation  and  release  to the public of the
     Proposed  Plan and Record of Decision  for the Site.  U.S. EPA will provide
     Respondent with copies of the final RI/FS Report, Proposed Plan, and ROD.

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                  12.2   U.S.   EPA  will   determine   the   contents   of  the
     administrative  record file for the  selection  of remedial  action for the
     Site.  Respondent  shall submit to U.S. EPA the documents  developed during
     the course of the RI/FS upon which  selection of the remedial action may be
     based.  Respondent  must also  submit  any  previous  studies  for the Site
     conducted  under state,  local,  or other federal  authorities  relating to
     selection of response actions for this Site, and all communications between
     Respondent  and  state,  local,  or other  federal  authorities  concerning
     selection of response actions for this Site.  Documents  identified in this
     paragraph  shall be  submitted  to U.S.  EPA no later than thirty (30) days
     after U.S. EPA's request for the material.  Respondent may submit comments,
     including  information  and documents  during the formal comment period for
     the  proposed  plan,  and U.S.  EPA will  include  all  such  comments  and
     information  and  documents in the  administrative  record.  At U.S.  EPA's
     request, Respondent shall also establish a community information repository
     at or near the Site, to house one (1) copy of the administrative record.
                       XIII. PROGRESS REPORTS AND MEETINGS
                  13.1 In addition to the deliverables set forth in this Consent
     Order,  unless  otherwise  agreed by the Project  Coordinators,  Respondent
     shall provide  monthly  progress  reports to U.S. EPA, by the tenth of each
     month. At a minimum, these progress reports shall: (1) describe the actions
     which  have  been  taken to comply  with  this  Consent  Order  during  the
     preceding

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     month;  (2)  include  results  of all  sampling  and tests  and other  data
     received by Respondent  during the  preceding  month and; (3) describe work
     planned for the next two (2) months with  schedules  relating  such work to
     the overall  project  schedule for RI/FS  completion;  and (4) describe all
     problems   encountered  and  any  anticipated   problems,   any  actual  or
     anticipated  delays, as well as the solutions  developed and/or implemented
     to address any actual or anticipated problems or delays.
                  13.2 Respondent shall participate in such meetings as U.S. EPA
     may  schedule   during  the  performance  of  the  RI/FS.  In  addition  to
     presentation  of the  technical  aspects of the RI/FS,  such  meetings  may
     include discussion of anticipated problems or new issues.  Meetings will be
     scheduled  at  U.S.  EPA's  discretion  subject  to  reasonable  notice  to
     Respondent.
           XIV. SAMPLING, ACCESS, AND DATA AVAILABILITY/ADMISSIBILITY
                  14.1              All results of sampling, tests, modeling, or
     other data  (including raw data) generated by Respondent or on Respondent's
     behalf during  implementation of this Consent Order,  shall be submitted to
     U.S. EPA in the monthly progress report described in the preceding  section
     of this Consent  Order.  U.S. EPA will make available to the Respondent all
     results of sampling,  tests,  modeling, or other data, (including raw data)
     generated  by U.S. EPA or on behalf of U.S.  EPA during  implementation  of
     this Consent Order.
                  14.2              Respondent will verbally notify U.S. EPA at
     least fifteen (15) days prior to conducting field events

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     described  in the SOW,  Work Plan or Sampling and  Analysis  Plan.  At U.S.
     EPA's or  ADEC's  verbal  or  written  request,  or that of its  authorized
     Representative(s),  Respondent shall allow split or duplicate samples to be
     taken  by U.S.  EPA or  ADEC or  their  authorized  representatives  of any
     samples  collected by Respondent in the course of implementing this Consent
     Order. All such split or duplicate samples shall be analyzed by the quality
     assurance methods identified in the approved Work Plan.
                  14.3 U.S.  EPA and ADEC and their  authorized  representatives
     shall have the authority at all  reasonable  times to enter and freely move
     about the property at the Site and any  off-Site  areas where work is being
     performed, for the purposes of inspecting conditions,  activities, records,
     operating  logs,  and contracts  related to the site or Respondent  and its
     contractor(s)  pursuant to this Consent  Order;  reviewing  the progress of
     Respondent  in carrying out this Consent  Order;  conducting  such tests as
     U.S. EPA or ADEC or their authorized  representatives  deem necessary;  and
     verifying  the  data  submitted  by  Respondent.  In  the  course  of  such
     activities,  U.S. EPA and ADEC or their authorized  representatives may use
     cameras,  recording devices, other documentary-type  equipment.  Respondent
     shall permit U.S.  EPA and its  authorized  representatives  to inspect and
     copy all records, files,  photographs,  documents,  sampling and monitoring
     data and other  writings  related to work  undertaken  in carrying out this
     Consent  Order.  Nothing  herein shall be construed to limit or affect U.S.
     EPA's right of entry or inspection authority

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     under  federal law. All parties and agencies  with access to the Site under
     this paragraph shall comply with all approved Health and Safety Plans.
                  14.4 Respondent may assert claims of business  confidentiality
     covering part or all of the information  submitted pursuant to the terms of
     this  Consent  Order  subject to the  provisions  of 40 C.F.R.  ss.  2.203,
     provided such claims are allowed by Section  104(e)(7) of CERCLA, 42 U.S.C.
     ss. 9604(e)(7).  Such claim shall be asserted in the manner described by 40
     C.F.R.  ss.  2.203(b)  and  substantiated  at the time  the  claim is made.
     Information  determined  to be  confidential  by U.S. EPA will be given the
     protection  specified in 40 C.F.R. Part 2. If no such claim accompanies the
     information  when it is submitted to U.S. EPA, it may be made  available to
     the public by U.S. EPA or the state without further notice to Respondent.
                  14.5 In entering into this Consent Order,  Respondent and U.S.
     EPA  waive  any  objections  to the QA/QC  Procedures  applied  to any data
     gathered,  generated, or evaluated by U.S. EPA, the state, or Respondent in
     the  performance or oversight of the Work that has been verified  according
     to the Quality  Assurance/Quality  Control ("QA/QC") procedures required by
     the  Consent  Order or any U.S.  EPA-approved  Work  Plan or  Sampling  and
     Analysis  Plan.  If  Respondent  objects to any data relating to the RI/FS,
     they shall submit a report to U.S. EPA that  identifies  and explains their
     objections,  describes  the  acceptable  uses  of the  data,  if  any,  and
     identifies any

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     limitations  to use of the data.  The report must be  submitted to U.S. EPA
     within  fifteen (15) days of the monthly  progress  report  containing  the
     data.
                  14.6   Respondent   agrees   not  to   assert   privilege   or
     confidentiality  claims with  respect to any  documents  or data related to
     Site  conditions,  sampling or monitoring  required to be submitted to U.S.
     EPA pursuant to this Consent Order. Respondent, however, reserves the right
     to  assert  privilege  and work  product  protections  as to  opinions  and
     conclusions of their employees, consultants,  attorneys or other agents. In
     the event  privilege is asserted,  upon request,  Respondent  shall provide
     U.S.  EPA  with  the  date,  author,  recipient  or  addressee,   title  or
     description  of the subject of the opinion or conclusion  and the privilege
     asserted by Respondent.
                  14.7              There is currently an agreement in place
     among the Alaska Railroad Corporation,  Ben Lomond, Inc. and Standard Steel
     & Metals providing U.S. EPA, ADEC and the Respondent's consultant access to
     the Site.  Respondent  shall  use its best  efforts  to  obtain  additional
     on-site and necessary off site  agreements.  Such agreements  shall provide
     access for U.S. EPA, its contractors and oversight officials,  ADEC and its
     contractors,  and the Respondent and its authorized  representatives.  Such
     agreements shall specify that Respondent is not U.S. EPA's  representatives
     with  respect  to  liability  associated  with  Site  activities.  Prior to
     initiation of field activities on any property, Respondent shall provide to
     U.S. EPA

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     a copy of the  access  agreement  pertaining  to such  property.  if access
     agreements  are not obtained  within a reasonable  time,  Respondent  shall
     notify U.S. EPA of its failure to obtain access and provide U.S. EPA with a
     detailed  description  of its efforts to obtain  access.  U.S.  EPA, in its
     discretion, may seek to obtain access for the Respondent; may terminate the
     Consent Order in the event that Respondent cannot obtain access agreements;
     or may allow Respondent to continue work without access.  In the event U.S.
     EPA does not  obtain  access  for  Respondent  and does not  terminate  the
     Consent Order,  Respondent shall perform all other activities not requiring
     access to the  off-site are in question.  Respondent  shall also  reimburse
     U.S. EPA for all costs,  including,  but not limited to,  enforcement costs
     and attorney  fees  incurred by the United  States to obtain access for the
     Respondent.
                       XV. DESIGNATED PROJECT COORDINATORS
                  15.1 On or before the  effective  date of this Consent  order,
     U.S. EPA and Respondent shall each designate their own Project Coordinator.
     Each  Project   Coordinator   shall  be  responsible   for  overseeing  the
     implementation  of this  Consent  Order.  To the maximum  extent  possible,
     communications  between  Respondent  and U.S.  EPA shall be directed to the
     Project  Coordinator by mail, with copies to such other persons as U.S. EPA
     and Respondent may respectively designate.  Communications include, but are
     not  limited  to,  all  reports,   approvals   and  other   documents   and
     correspondence submitted under this Consent Order.

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                  15.2  U.S.  EPA and  Respondent  each have the right to change
     their respective Project Coordinator.  The other party must be notified, in
     writing, at least ten (10) days prior to the change.
                  15.3 All reports, approvals,  disapprovals and other documents
     and  correspondence  which must be submitted under this Consent Order shall
     be sent by hand,  express or certified mail, return receipt  requested,  to
     the  following   Project   Coordinators   or  to  such  successor   Project
     Coordinators as may be designated in writing by the parties:

                                    (a)     For U.S. EPA:

                                            Christopher Cora
                                            Federal Facility Branch (HW-124)
                                            U.S. EPA, Region 10
                                            1200 Sixth Avenue
                                            Seattle, Washington 98101

                                    (b)     For Respondent:

                                            Alex Tula
                                            Woodward-Clyde, Consultants
                                            3440 Bank of California center
                                            900 Fourth Avenue
                                            Seattle, Washington 98164


                  15.4 U.S. EPA's Project  Coordinator  shall have the authority
     vested in a Remedial  Project  Manager  ("RPM")  and  On-Scene  Coordinator
     ("OSC") by the NCP. In addition,  U.S. EPA's Project Coordinator shall have
     the authority,  consistent  with the NCP, to halt any work required by this
     Consent  Order,  and to take any  necessary  response  action  when  he/she
     determines that

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     emergency  conditions at the Site may present an immediate  endangerment to
     public health,  welfare,  or the  environment.  The absence of the U.S. EPA
     Project  Coordinator  from the area under study  pursuant  to this  Consent
     Order shall not be cause for the stoppage or delay of work.
                  15.5 In addition to its Project  Coordinator,  U.S.  EPA shall
     arrange for other qualified person(s) to assist in its oversight and review
     of the  conduct of the RI/FS,  pursuant  to  Section  104(a) of CERCLA,  42
     U.S.C. ss. 9604(a). Such persons may observe work and make inquiries in the
     absence of the U.S.  EPA Project  Coordinator,  but are not  authorized  to
     modify the Work Plan.
                           XVI. OTHER APPLICABLE LAWS
                  16.1  Respondent  shall  comply  with  all  applicable  state,
     federal  and local laws when  performing  the RI/FS.  No local,  state,  or
     federal permit shall be required for any portion of any activity  conducted
     entirely  on-site,  where  such  action  is  selected  and  carried  out in
     compliance with Section 121 of CERCLA, 42 U.S.C. ss. 9621.
                            XVII. RECORD PRESERVATION
                  17.1 All records and documents in Respondent's possession that
     relate in any way to the Site shall be preserved during the conduct of this
     Consent  Order and for five (5) years after  commencement  of any  remedial
     action.  Respondent  shall acquire and retain copies of all documents  that
     relate to the Site which are in the possession of its employees, agents,

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     accountants,  contractors  or  attorneys.  After this five (5) year period,
     Respondent  shall  notify  U.S.  EPA at least  ninety  (90) days before the
     documents  are  scheduled to be  destroyed.  If U.S. EPA requests  that the
     documents be saved, Respondent shall, at no cost to U.S. EPA, give U.S. EPA
     the documents or copies of the documents.
                            XVIII. DISPUTE RESOLUTION
                  18.1 The dispute  resolution  procedures of this Section shall
     be the  exclusive  mechanism  to  resolve  disputes  arising  under or with
     respect to this  Consent  Order and shall apply to all  provisions  of this
     Consent  Order.  The  fact  that  dispute  resolution  is not  specifically
     referenced in the individual  Sections of the Consent Order is not intended
     to and shall not bar Respondent  from invoking the procedures  with respect
     to any disputed issue.
                  18.2 a. Any dispute which arises under or with respect to this
     consent  order  shall in the first  instance  be the  subject  of  informal
     negotiations  between the  Respondent and U.S. EPA. The period for informal
     negotiations  shall not exceed  fifteen (15) days from the time the dispute
     arises,  unless such period is modified by written agreement of the Project
     Coordinators. The dispute shall be considered to have arisen when one party
     sends the other parties a written Notice of Dispute.  In the event that the
     parties cannot resolve a dispute informally,  the position advanced by U.S.
     EPA shall be binding  unless  formal  dispute  resolution  is invoked under
     Paragraph

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     18.2(b).
                               b.      Within twenty (20) days after the
     conclusion of the informal  negotiation  period,  Respondent  may request a
     determination by U.S. EPA's Hazardous Waste Division Director by submitting
     to U.S.  EPA a written  Statement  of  Position  on the matter in  dispute,
     including,  but not  limited  to, any  factual  data,  analysis  or opinion
     supporting  that position and any supporting  documentation  relied upon by
     the Respondent.
                               c.      Within twenty (20) days after receipt of
     the  Respondent's  Statement  of  Position,  the EPA  will  provide  to the
     Respondent  its Statement of Position,  including,  but not limited to, any
     factual  data,  analysis,  or  opinion  supporting  that  position  and all
     supporting documentation relied upon by the U.S. EPA.
                               d.      An administrative record of the dispute
     shall be  maintained  by U.S.  EPA and  shall  contain  all  Statements  of
     Position,  including supporting  documentation,  submitted pursuant to this
     Section.  Where  appropriate,   the  U.S.  EPA  may  allow  submission.  of
     supplemental Statements of Position by the parties to the dispute.
                               e.      The Director of the Hazardous Waste
     Division, will issue a final administrative decision resolving the dispute,
     based on the  administrative  record  described  in  subparagraph  d.  This
     decision shall be binding upon the Respondent  subject to the provision for
     judicial review provided in Paragraph 18.3.

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                  18.3 If the  Respondent  does not  abide by U.S.  EPA's  final
     administrative decision, U.S. EPA reserves the right in its sole discretion
     to seek either stipulated or statutory penalties and/or to pursue any other
     enforcement  option  provided in CERCLA.  If U.S. EPA seeks  enforcement of
     this Consent order in court,  Respondent  may seek judicial  review of U.S.
     EPA's final  administrative  decision  based on the  administrative  record
     developed during the dispute  resolution  process.  Such judicial review of
     the dispute shall be under the arbitrary and capricious standard.
                  18.4  While a  matter  is  pending  in  dispute  resolu  tion,
     Respondent is not relieved of their obligations to perform other activities
     and submit deliverables on the schedule(s) in their approved Work Plan. The
     invocation of dispute resolution does not stay the accrual of stipulated or
     statutory penalties under this Consent Order.
                            XIX. STIPULATED PENALTIES
                  19.1 U.S. EPA, in its sole discretion,  may impose  stipulated
     penalties for each day that Respondent fails to complete a deliverable in a
     timely manner or fail to produce a deliverable  of acceptable  quality,  or
     fail to revise any deliverable as directed by U.S. EPA.  Penalties begin to
     accrue on the day that  performance is due or a violation  occurs and shall
     extend  through the date of completion of the  correction.  Where a revised
     submission is required of Respondent,  stipulated  penalties shall continue
     to accrue until a satisfactory

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     deliverable is submitted to U.S. EPA. U.S. EPA will provide  written notice
     for violations  that are not based on timeliness;  nevertheless,  penalties
     shall  accrue  from the day a  violation  commences.  Payment  shall be due
     within  thirty (30) days of receipt of a demand  letter from U.S. EPA. U.S.
     EPA may, in its sole discretion,  waive imposition of stipulated  penalties
     if it determines that Respondent has attempted in good faith to comply with
     this  Order  or  in  the  event  of  timely  cure  of  defects  in  initial
     submissions.
                  19.2   Respondent shall pay interest on any unpaid
     balance of stipulated penalties,  which shall begin to accrue at the end of
     the 30-day  period,  at the rate  established by the Department of Treasury
     pursuant to 30 U.S.C. ss. 3717.
                  19.3  Respondent   shall  make  all  payments  on  account  of
     stipulated penalties by cashier's or certified check(s) made payable to the
     Hazardous Substances Superfund, which are to be transmitted to:

                           U.S. Environmental Protection Agency
                           Attn: Superfund Accounting
                           P.O. Box 360903M
                           Pittsburgh, PA 15251

     All checks  shall  identify the name of the Site,  the site  identification
     number  and the  account  number.  A copy of the check  and/or  transmittal
     letter shall be forwarded to the U.S. EPA Project Coordinator.
                  19.4              For the following major deliverables,

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     stipulated  penalties  shall  accrue in the  amount  of $1000 per day,  per
     violation,  for the first seven (7) days of  noncompliance;  $2000 per day,
     per  violation,  for the 8th through 14th day of  noncompliance-  $5000 per
     day, per violation,  for the 15th day through the 30th day; and $10,000 per
     day, per violation, for the 30th day through the 90th day.
                  1)       The original draft and any revised RI Work Plan.
                  2)       The original draft and any revised Sampling and
                           Analysis Plan.
                  3)       The original draft and any revised RI Report.
                  4)       The original draft and any revised FS Work Plan.
                  5)       The original draft and any revised Treatability
                           Testing Work Plan if needed.
                  6)       The original draft and any revised Treatability
                           Study Sampling and Analysis Plan if needed.
                  7)       The original draft and revised FS Report.
                  19.5              For the following interim deliverables,
     stipulated  penalties  shall  accrue  in the  amount  of $500 per day,  per
     violation,  for the  first  week  of  noncompliance;  $1000  per  day,  per
     violation,  for the 8th through 14th day of  noncompliance;  $3000 per day,
     per violation, for the 15th day through the 30th day of noncompliance;  and
     $5000 per day, per violation, for the 30th through the 90th day.
                  1)       Technical memorandum on modeling of Site
                           characteristics if Respondent proposes that
                           modeling is appropriate.

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                  2)       Preliminary Site Data Summary.
                  3)       Treatability Study Evaluation Report.
                  4)       Memorandum on Remedial Action objectives.
                  5)       Interim Remedial or Removal Action Work Plan if
                           proposed.
                  19.6 For  failure  to submit  the  monthly  progress  reports,
     stipulated  penalties  shall  accrue  in the  amount  of $250 per day,  per
     violation,  for  the  first  week  of  noncompliance;  $750  per  day,  per
     violation,  for the 8th through 14th day of  noncompliance,  $1500 per day,
     per  violation,  for the 15th day through the 30th day;  and $3000 per day,
     per violation, for the 30th day through the 90th day.
                  19.7  Respondent  may dispute  U.S.  EPA's right to the stated
     amount of  penalties by invoking the dispute  resolution  procedures  under
     Section XVIII of this Consent Order.  Penalties shall accrue,  but need not
     be paid,  during the dispute  resolution  period.  If  Respondent  does not
     prevail upon resolution of the dispute,  all penalties shall be due to U.S.
     EPA within  thirty (30) days of  resolution  of the dispute.  If Respondent
     prevails in the dispute resolution, no penalties shall be paid.
                  19.8              In the event that U.S. EPA provides for
     corrections  to be reflected in the next  deliverable  and does not require
     resubmission  of the original  deliverable,  stipulated  penalties for that
     interim  deliverable  shall cease to accrue on the date of such decision by
     U.S. EPA.
                  19.9              The stipulated penalties provisions in this

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     Section do not  preclude  U.S.  EPA from  pursuing  any other  remedies  or
     sanctions,  including  applicable statutory penalties instead of stipulated
     penalties,  which are available  because of Respondent's  failure to comply
     with this Consent  Order.  Payment of stipulated  penalties  does not alter
     Respondent's obligation to complete performance under this Consent Order.
                                XX. FORCE MAJEURE
                  20.1 For purposes of this Consent  Order,  "Force  Majeure" is
     defined  as any  event  arising  from  causes  beyond  the  control  of the
     Respondent  or of any entity  controlled  by  Respondent,  including  their
     contractors and  subcontractors,  that delays the timely performance of any
     obligation  under this Consent  order,  notwithstanding  Respondent's  best
     efforts to avoid delay. The requirement that the Respondent  exercise "best
     efforts" to avoid the delay  includes  using best efforts to anticipate any
     potential  Force  Majeure event and to address the effects of any potential
     Force  Majeure  event:  (1)  as it is  occurring;  and  (2)  following  the
     potential  Force  Majeure  event,  such that the delay is  minimized to the
     greatest  extent  practicable.  Force  Majeure  events  shall  not  include
     increased  costs or expenses of any work to be performed under this Consent
     order or the financial difficulty of Respondent in performing such work.
                  20.2 If any event  occurs or has  occurred  that may delay the
     performance  of any  obligation  under this Consent  Order,  whether or not
     caused by a Force Majeure event, Respondent shall

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     notify the U.S. EPA Project  Coordinator  (or, in his or her  absence,  the
     Federal  Facility Branch Chief,  U.S. EPA Region 10), by telephone,  within
     forty-eight  (48) hours after  Respondent first became aware that the event
     might cause a delay.  Within five (5) business days thereafter,  Respondent
     shall  provide  a written  statement  of the  reasons  for the  delay;  the
     anticipated  duration  of the delay;  all  actions  taken or to be taken to
     prevent or minimize  the delay;  and a schedule for  implementation  of any
     measures to be taken to mitigate the effect of the delay.  Respondent shall
     exercise  best  efforts to avoid or  minimize  any delay and the effects of
     such delay.  Failure to comply with the above  requirements as to any event
     shall preclude  Respondent  from asserting any claim of Force Majeure as to
     that event.
                  20.3 If EPA  agrees  that the  delay or  anticipated  delay is
     attributable  to a Force Majeure  event,  the time for  performance  of the
     obligations  under this  Consent  Order that are  directly  affected by the
     Force Majeure event shall be extended,  by agreement of the parties,  for a
     period of time not to exceed the actual duration of the delay caused by the
     Force  Majeure  event.  An  extension  of the time for  performance  of the
     obligation  directly  affected  by the Force  Majeure  event  shall not, of
     itself, extend the time for performance of any subsequent obligation.
                  20.4              If U.S. EPA does not agree that the delay or
     anticipated  delay has been or will be caused by a Force Majeure event,  or
     does not agree with Respondent on the length of the

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     proposed  extension  of time,  the issue  shall be subject  to the  dispute
     resolution  procedures set forth in Section XVIII of this Consent Order. In
     any such proceeding, Respondent shall have the burden of demonstrating by a
     preponderance of the evidence that the delay or anticipated  delay has been
     or will be caused by a Force Majeure event,  that the duration of the delay
     was or will be warranted under the circumstances, that Respondent exercised
     or are using their best efforts to avoid and/or mitigate the effects of the
     delay,  and that  Respondent  complied with the  requirements  of Paragraph
     20.1.
                  20.5  Should  Respondent  carry  the  burden  set forth in the
     preceding  paragraph,  the  delay  at issue  shall  not be  deemed  to be a
     violation of the affected obligation of this Consent Order.
               XXI. REIMBURSEMENT OF RESPONSE AND OVERSIGHT COSTS
                   21.1 After receipt of the final draft RI/FS
     Reports,  U.S.  EPA will  submit to  Respondent  a summary  and  demand for
     payment of all  response  costs  incurred by U.S.  EPA with  respect to the
     RI/FS and this Consent  order.  Response  costs  ("Response  Costs")  shall
     include all direct and indirect costs  incurred in overseeing  Respondent's
     implementation  of this  Consent  order and in  performance  by U.S. EPA of
     activities  required  as  part  of the  RI/FS  under  this  Consent  Order,
     including,  without  limitation,  costs incurred in conduct of the Baseline
     Risk Assessment,  in obtaining access, if necessary,  and in implementing a
     community relations program for the Site. All

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     cost summaries will include U.S. EPA'S:  (a) payroll and travel costs,  (b)
     contract costs, and (c)indirect costs, including the amount computed an the
     basis of direct labor hours.  U.S.  EPA's  certified  Financial  Management
     System summary of unreimbursed  response costs shall serve as the basis for
     each demand for payment.
                  21.2 Subject to requests for  supporting  documentation  under
     Paragraph  21.4,  within thirty (30) days of receipt of demand for payment,
     the amount shall be due and payable and Respondent  shall remit a certified
     or  cashier's  check for the  amount of such  costs.  If the  amount of any
     demand  is not paid in full  within  thirty  (30)  days of  receipt  of the
     demand,  interest  shall accrue on the unpaid  balance at the interest rate
     determined  annually  by the  Secretary  of the  Treasury  for  interest on
     investments  of the  Hazardous  Substances  Superfund,  pursuant to Section
     107(a) of CERCLA, 42 U.S.C. ss. 9607(a).
                  21.3  All  checks  shall  be  made  payable  to the  Hazardous
     Substances  Superfund  and shall  include  the name of the  Site,  the Site
     identification  number and account number,  and shall indicate that payment
     is on account of U.S. EPA response costs. Checks shall be forwarded to:
                           U.S. Environmental Protection Agency
                           Attn: Superfund Accounting
                           P.O. Box 360903M
                           Pittsburgh, PA 15251

     Copies of each transmittal letter and check shall be sent simultaneously to
     the U.S. EPA Project Coordinator.

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                  21.4 Upon request by the Respondent within thirty (30) days of
     receipt of the demand for  payment,  U.S. EPA shall  provide the  following
     supporting  documentation  for  Response  costs:  employee  time sheets for
     payroll  costs,   receipts  for  travel  costs,   contractor  invoices  and
     supporting   documentation  for  contractor   charges  and  expenses,   and
     computation of U.S. EPA indirect costs.  Some of the requested  information
     may be  redacted  or issued  only  after  Respondent  agrees to  protective
     provisions  if the  information  is subject to a claim of  privilege  or is
     confidential business information.
                  21.5  Respondent  may  dispute  payment of any  portion of the
     Response  costs  demanded by U.S.  EPA, but only on the basis of accounting
     errors,  the  inclusion of costs  outside the scope of this Consent  Order,
     costs inconsistent with the NCP, or not in accordance with CERCLA. Any such
     objection  shall be made in writing  within fifteen (15) days of receipt of
     the requested supporting  documentation and shall specifically identify the
     disputed costs and the basis of the dispute.  Any non-contested costs shall
     be remitted by Respondent  within the fifteen (15) day notice period and in
     accordance  with the procedures in Paragraphs  21.2 and 21.3 above.  In the
     event that dispute  resolution  under  Section  XVIII above is invoked with
     respect  to any cost  item,  Respondent  shall pay  disputed  costs into an
     escrow  account  while the  dispute is pending.  In any dispute  resolution
     proceeding,   Respondent   shall  bear  the  burden  of  establishing   its
     contentions of inappropriate costs on the grounds set forth above.

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                  21.6 Except as provided in this Paragraph,  this Consent Order
     does not apply to  Respondent's  liability for past costs  incurred by U.S.
     EPA in connection with the removal response action,  which is currently the
     subject of litigation filed in the U.S.  District Court for the District of
     Alaska. In any settlement with the United States, however,  Respondent (and
     the federal  agencies  signatories to the Funding  Agreement) shall receive
     credit  for  expenses   incurred  by  them  under  this  Consent  order  in
     determining their proportionate liability for response costs at the Site.
            XXII. FINANCIAL ASSURANCE, INSURANCE AND INDEMNIFICATION
                  22.1              Respondent shall demonstrate its ability to
     complete  the Work and any other  obligations  required  under this Consent
     Order,  by obtaining and  presenting  to U.S. EPA for its approval,  within
     thirty (30) days after the effective date of this Consent Order, one of the
     following:  (a) a  performance  bond;  (b) one or more  letters  of  credit
     equaling the total  estimated  cost of the Work,  less the portion to which
     the  federal  government  agencies  and  departments  who  are  potentially
     responsible parties have agreed to pay; (c) a guarantee to perform the Work
     by parent or sibling corporation or subsidiaries of the Respondent;  or (d)
     internal  corporate  financial  information  sufficient to satisfy U.S. EPA
     that  Respondent's  net worth is  sufficient to make  additional  financial
     assurances  unnecessary.  If internal financial information is relied upon,
     the standards used to determine the adequacy of Respondent's

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     resources  (or the  adequacy  of the  guarantees  of the  parent or sibling
     corporations or subsidiaries)  shall be equivalent to those set forth in 40
     C.F.R. Part 265, Subpart H.
                  22.2 U.S. EPA will have  forty-five  (45) days from receipt of
     the financial assurance or internal corporate  information to determine its
     adequacy and to communicate its  determination  to Respondent.  If U.S. EPA
     determines  that such assurance or  information  is inadequate,  Respondent
     shall  remedy the defect or submit one of the other forms of  assurance  to
     U.S. EPA for its  approval.  If internal  corporate  information  is relied
     upon,  Respondent shall submit updated financial  information  annually, on
     the anniversary of the effective date of this Consent Order.
                  22.3 In no event shall work required  under this Consent Order
     be delayed pending submission and/or approval of financial assurances under
     this Section.
                  22.4 (a)  Prior to  commencing  any work  under  this  Consent
     Order,  Respondent shall obtain comprehensive general liability ("CGL") and
     automobile  insurance  with  limits  of  at  least  three  million  dollars
     ($3,000,000),  combined  single  limit per  occurrence,  naming  the United
     States as  additional  insured,  to insure  against all claims of injury or
     property damage to third parties arising from or related to such work. Such
     insurance  shall be  maintained  for the duration of this Consent Order and
     for two years after completion of all work required  hereunder.  In lieu of
     such coverage, Respondent, at its option,

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     may provide  evidence of  financial  capacity  sufficient  for  purposes of
     self-insurance  pursuant to the requirements in 40 C.F.R. Part 265, Subpart
     H.
                                 (b)     Respondent may demonstrate by evidence
     satisfactory  to U.S. EPA that its  contractor or  subcontractors  maintain
     equivalent coverage,  or coverage for the same risks but in a lesser amount
     or for  lesser  terms,  in which case  Respondent  need  provide  only that
     portion of the  insurance  described  above which is not  maintained by the
     contractor  or  subcontractor.  At least seven (7) days prior to commencing
     any work under this Consent Order,  Respondent  shall provide U.S. EPA with
     copies  of the  applicable  policies  or  other  evidence  of the  required
     coverage.
                                 (c)     For the duration of this Consent Order,
     Respondent shall satisfy,  or ensure that its contractors or subcontractors
     satisfy,   all  applicable   laws  and   regulations   regarding   workers'
     compensation  coverage for all persons  performing  work on their behalf in
     implementing this Consent Order. Prior to commencing such work,  Respondent
     shall  provide  U.S.  EPA with copies of the  applicable  policies or other
     evidence of such coverage.
                  22.5  Respondent  agrees  to  indemnify  and hold  the  United
     States,  its agencies,  departments,  agents and  employees,  excluding the
     United States and its agencies,  departments, agents and employees in their
     role as Potentially  Responsible Parties,  harmless from any and all claims
     or causes of action arising from

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     or  on  account  of  acts  or  omissions  of  Respondent,   its  employees,
     contractors,  agents,  receivers,  successors,  or assigns in carrying  out
     activities  under this Consent  Order.  The United  States or any agency or
     authorized  representative  thereof shall not be held out as a party to any
     contract  entered into by Respondent in carrying out activities  under this
     Consent Order.
                             XXIII. JUDICIAL REVIEW
                  23.1  Nothing in this  Consent  Order  shall be  construed  as
     authorizing  any person to seek judicial review of any action or work where
     review is barred by any provision of CERCLA, including, without limitation,
     Section 113(h) of CERCLA, 42 U.S.C. ss. 9613(h).
                          XXIV. RESERVATIONS OF RIGHTS
                  24.1 An  action  is  pending  in U.S.  District  Court for the
     District of Alaska for recovery of past costs incurred at the Site, and for
     other  relief.  With  exception of these past costs,  U.S. EPA reserves the
     right to bring an action against Respondent under Section 107 of CERCLA, 42
     U.S.C.  ss. 9607, for recovery of all response costs,  including  oversight
     costs, incurred by the United States at the Site that are not reimbursed by
     Respondent,  any costs  incurred in the event that U.S.  EPA  performs  any
     work, and any future costs incurred by the United States in connection with
     response activities conducted under CERCLA at this Site.
                  24.2              U.S. EPA reserves the right to bring an
     action against Respondent to collect stipulated penalties

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     assessed pursuant to Section XIX of this Consent Order, or to elect to seek
     penalties pursuant to Section 109 of CERCLA, 42 U.S.C. ss. 9609.
                  24.3  Respondent  retains  its right to assert any claims f(Dr
     contribution or otherwise it may have against other potentiaLly responsible
     parties at the Site.
                  24.4 Except as expressly  provided in this Consent order, each
     party  reserves all other rights and defenses it may have.  Nothing in this
     Consent order shall affect U.S. EPA's  emergency  removal  authority or its
     enforcement  authorities  including,  but not limited to, the right to seek
     injunctive  relief,  stipulated  or statutory  penalties,  and/or  punitive
     damages.
                  24.5 Upon satisfactory  completion of the requirements of this
     Consent Order,  Respondent  (and the federal  agencies,  signatories to the
     Funding  Agreement) shall have resolved their liability to U.S. EPA for the
     Work  performed  and the Response  Costs  incurred in  connection  with the
     RI/FS. Respondent is not released from liability, however, for any response
     actions taken at the Site beyond the scope of this Consent order  including
     removals,  remedial action or activities under section 121(c) of CERCLA, 42
     U.S.C. ss. 9621(c).
                                XXV. OTHER CLAIMS
                  25.1              In entering into this Consent Order,
     Respondent waives any right to seek  reimbursement  under Section 106(b) of
     CERCLA, 42 U.S.C. ss. 9606(b) and any right to present

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     claims under Sections 111 or 112 of CERCLA,  42 U.S.C.  ss.ss. 9611 or 9612
     for the Work.  This  Consent  Order does not  constitute  any  decision  on
     preauthorization  of funds under Section 111(a)(2) of CERCLA, 42 U.S.C. ss.
     9611(a)(2).  Subject  to Section  25.2 of this  Consent  order,  Respondent
     further waives all other statutory and common law claims against the United
     States,  including,  but not limited to,  contribution  and  counterclaims,
     relating to or arising out of conduct of the RI/FS.
                  25.2  Nothing in this  Consent  order shall  constitute  or be
     construed as a release from any claim, cause of action, or demand in law or
     equity against the United  States,  its agencies,  departments,  agents and
     employees in their role as Potentially  Responsible Parties, or against any
     person,  or entity not a signatory to this Consent  Order for any liability
     it may  have  arising  out of or  relating  in any  way to the  generation,
     storage, treatment, handling,  transportation,  release, or disposal of any
     hazardous  substances,  pollutants,  or contaminants  found at, taken to or
     from the Site.
                  25.3              Respondent shall not recover its own costs
     and attorneys fees from U.S. EPA and/or the United States.
                XXVI. EFFECTIVE DATE AND SUBSEQUENT MODIFICATION
                  26.1 The effective date of this Consent Order
     shall be the date it is signed by all parties to this Consent order.
                  26.2              This Consent Order may be amended by mutual
     agreement of U.S. EPA and Respondent. All such amendments shall

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     be in writing  and shall be  effective  when  signed by all parties to this
     Consent  Order.  U.S. EPA Project  Coordinators  are not authorized to sign
     amendments to the Consent Order.
                  26.3 No informal advice, guidance,  suggestions or comments by
     U.S. EPA regarding reports, plans,  specifications,  schedules or any other
     document  submitted by the  Respondent  shall be construed as relieving the
     Respondent  of its  obligation  to obtain  such  formal  approval as may be
     required by this Consent order.
                               XXVII. SATISFACTION
                  27.1 The  provisions  of this Consent Order shall be satisfied
     when  Respondent  certifies  in  writing  to U.S.  EPA that all  activities
     required  under this  Consent  Order,  including  any  additional  work and
     payment of costs and any  stipulated  penalties  demanded by U.S. EPA, have
     been performed  and/or paid,  and U.S. EPA has approved the  certification.
     U.S.  EPA will  respond  within  thirty  (30) days to any such  request for
     approval of Respondent's certification or within a longer period of time as
     may be  agreed to by the  Project  Coordinators.  If the U.S.  EPA does not
     respond within thirty days after receipt of Respondent's  request or within
     the agreed on time,  or responds  unfavorably,  the  Respondent  may invoke
     dispute  resolution under Section XVIII.  Such  certification  and approval
     shall  not,  however,  terminate  Respondent's  obligation  to comply  with
     Sections XVII and XXII of this Consent Order.
                  27.2              The certification required in the preceding

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     paragraph   shall  be  signed  by  a  responsible   official   representing
     Respondent,  who  shall  certify  that  the  information  contained  in  or
     accompanying  the  certification  is  true,  accurate,  and  complete.  For
     purposes  of this  Consent  Order,  a  responsible  official is a corporate
     official in charge of a principal business function.
                           XXVIII. SEPARATE DOCUMENTS
                  28.1  This  Consent  Order  may be  executed  in  two or  more
     counterparts,  each of which shall be deemed an original,  but all of which
     together shall constitute one and the same instrument.
                       XXIX. CONTINGENT RIGHT TO WITHDRAW
                  29.1 If within 60 days of the  execution of this Consent order
     by Respondent the Funding  Agreement,  dated September 23, 1992 (referenced
     in Paragraph  5.13),  is not approved and executed by an authorized  United
     States  Assistant  Attorney  General  in  its  current  form,  or in a form
     otherwise  acceptable  to  Respondent,  and thereby  made  binding upon the
     federal agency parties, the Respondent shall have the right to withdraw its
     consent to and  approval of this  Consent  Order by written  notice to U.S.
     EPA. Such right to withdraw shall be continuing but shall terminate at such
     time as such a Funding  Agreement  is fully  executed and made binding upon
     all  parties  thereto.  In the  event  Respondent  exercises  the  right to
     withdraw  pursuant to this provision,  such  withdrawal  shall be effective
     immediately upon delivery of written notice to U.S. EPA and

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     Respondent  shall be relieved of all obligations  under this Consent Order,
     provided, however, that Respondent shall, upon request, provide to the U.S.
     EPA  Project  Coordinator  any  sampling   information  and/or  other  data
     collected pursuant to this Consent order prior to withdrawal.  In the event
     of any  withdrawal,  neither the prior  approval of this  Consent  Order by
     Respondent  nor the  withdrawal  from it  shall  enlarge  or  diminish  any
     obligation  or  liability  of  Respondent  which  may  exist  at  any  time
     independent of this Consent order.


     By:  /s/ Randall F. Smith                             Date:       9/25/92
     RANDALL F. SMITH, Director
     Hazardous Waste Division
     Region 10 1200 Sixth Avenue
     Seattle, Washington 98101




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     STIPULATED, AGREED, AND APPROVED FOR ISSUANCE

     CHUGACH ELECTRIC ASSOCIATION, INC.



     By:  /s/ Evan J. Griffith, Jr.                              9/23/92
                                                                  Date
     Acting Gen'l Mgr
         Title

     Evan J. Griffith, Jr.
     Acting General Manager


           Address


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                                                         1

                                   APPENDIX 1

                                STATEMENT OF WORK
                     STANDARD STEEL AND METALS SALVAGE YARD
                  REMEDIAL INVESTIGATION AND FEASIBILITY STUDY

INTRODUCTION

         The purpose of this Remedial Investigation/Feasibility Study (RI/FS) is
to  investigate  the nature and extent of  contamination  at the Standard  Steel
Metals and Salvage Yard ("Site")  located in  Anchorage,  Alaska and develop and
evaluate  remedial  alternatives.  The  RI and FS  are  interactive  and  may be
conducted  concurrently  so that the data  collected  in the RI  influences  the
development of remedial  alternatives  in the FS, which in turn affects the data
needs and the scope of treatability studies.

         The  Respondents  will conduct this RI/FS (except for the baseline risk
assessment  component) in accordance  with the  Administrative  Order on Consent
("AOC") to which this  Statement of Work is attached.  Respondents  will produce
draft RI and FS reports that are in  accordance  with this SOW, the Guidance for
Conducting  Remedial  Investigations and Feasibility  Studies Under CERCLA (U.S.
EPA, Office of Emergency and Remedial  Response,  October 1988,  OSWER Directive
No.  9355.3-01)  (the  "RI/FS  Guidance"),  and  other  guidances  that the U.S.
Environmental  Protection Agency ("U.S. EPA") uses in conducting a RI/FS (a list
of primary guidance is attached). The RI/FS Guidance describes the report format
and the required  report  content.  The  Respondents  will furnish all necessary
personnel,  materials,  and services;  needed,  or incidental to performing  the
RI/FS, except as otherwise specified in the AOC.

         At the completion of the RI/FS,  U.S. EPA will be  responsible  for the
selection  of a site  remedy,  which it will  document  in a Record of  Decision
("ROD"). The final RI/FS report, as adopted by U.S. EPA, and U.S. EPA's baseline
risk assessment,  together with the administrative  record,  will form the basis
for the  selection  of the remedy at the Site and will  provide the  information
necessary for preparation of the ROD.

         The  remedial  action  alternative  selected by U.S.  EPA will meet the
cleanup standards  specified in Section 121 of the  Comprehensive  Environmental
Response,  compensation,  and  Liability  Act  ("CERCLA"),  as  amended  by  the
Superfund  Amendments and  Reauthorization  Act of 1986 ("SARA"),  42 U.S.C. ss.
9621.  That is, the selected  remedial action will be protective of human health
and the  environment,  will be in  compliance  with,  or  include  a waiver  of,
applicable  or relevant  and  appropriate  requirements  of other laws,  will be
cost-effective, will utilize permanent


                                                               August 17, 1992


<PAGE>


                                                         2

solutions  and  alternature   treatment   technologies   or  resource   recovery
technologies,  to the maximum extent practicable, and will address the statutory
preference for treatment as a principal element.

TASK 1 - SCOPING (RI/FS Guidance, Chapter 2)

         The specific  project scope will be planned by the Respondents and U.S.
EPA. The respondent  will document the specific  project scope in a Work Plan in
accordance with the RI/FS Guidance and other applicable  guidances.  Because the
work required to perform a RI/FS is not fully known at the outset, and is phased
in  accordance   with  the  Site's   complexity  and  the  amount  of  available
information,  it may be  necessary  to modify the Work Plan  during the RI/FS to
satisfy the objectives of the study.

         Based on available  information,  the site objectives for the Site have
been determined preliminarily to be the following:

         Gather data of sufficient quantity and quality concerning  contaminants
         in groundwater,  surface water, soil,  sediments,  and air to conduct a
         Baseline Risk Assessment  (human health and  ecological),  to determine
         nature and extent of contaminants,  contaminant fate and transport, and
         to select the  appropriate  remedial action by conducting a feasibility
         sturdy.

         A sampling strategy will be agreed upon by U.S. EPA and the Respondents
which  meets  the  foregoing  objectives  based  on the  nature  and  extent  of
contamination at the site. Data gathered from the sampling activity will then be
used to meet all of the  requirements  of an RI/FS,  which are  outlined in this
SOW.

         Respondents shall conduct the scoping activities described
in the RI/FS Guidance,  Chapter 2 to the extent  applicable to the Site and
as required by U.S.  EPA.  Respondents  have provided U.S. EPA with a draft Work
Plan.  U.S. EPA and  Respondents  are currently  negotiating  and discussing the
site-specific  project scope.  At the conclusion of the project  planning phase,
Respondents shall provide U.S. EPA with the following deliverables:
                           (a)      Draft Final RI Work Plan.  Within 30 days of
                  the effective date of this Consent order, Respondents
                  shall submit to U.S. EPA a draft final RI Work Plan.
                           (b)      Sampling and Analysis Plan.  Within 30 days
                  of the effective date of this Consent Order,
                  Respondent(s) shall submit to U.S. EPA a draft final
                  Sampling and Analysis Plan.  This plan shall include a


                                                            August 17, 1992


<PAGE>


                                                         3

                  Field Sampling Plan ("FSP") and a Quality Assurance
                  Project Plan ("QAPP").
                           (c)      Site Health and Safety Plan.  Within 30 days
                  of the effective date of this consent Order,
                  Respondents shall submit to U.S. EPA a Health and
                  Safety Plan for the Site.
                           (d)      Draft Final FS Work Plan. Within 120 days of
                  the effective date of this Consent Order, Respondents
                  shall submit to U.S. EPA a draft final FS
                  Work Plan, which shall include:
                           (i) Identification of Candidate Technologies
                           Memorandum.


TASK 2   COMMUNITY RELATIONS

         U.S. EPA will prepare a Community Relations Plan ("CRP") for
the RI/FS, in accordance with U.S. EPA guidances and the NCP. Upon request,
Respondents  shall  provide  information  to U.S.  EPA to support its  community
relations  program.  In  addition,  the  Respondents  may  establish a community
information  repository,  at or  near  the  site,  to  house  one  copy  of  the
administrative  record.  The extent of PRP involvement in CRP activities is left
to  the   discretion  of  U.S.  EPA.  The   Respondents'   community   relations
responsibilities,  if any, are specified in the community  relations  plan.  All
PRP-conducted  community  relations  activities  will be subject to oversight by
U.S. EPA.

TASK 3 -- SITE CHARACTERIZATION (RI/FS Guidance, Chapter 3)

         Following  U.S.  EPA approval or  modification  of the RI Work Plan and
Sampling and Analysis Plan,  Respondents shall perform Site  Characterization as
specified  in the Work Plans,  as they may be modified  in  accordance  with the
procedures  set forth in the AOC.  Site  Characterization  shall be performed in
accordance  with  the  RI/FS  Guidance  and  any  other  applicable   guidances.
Respondents  shall verbally  notify U.S. EPA at least fifteen (15) days prior to
conducting field events. Respondents shall provide U.S. EPA with analytical data
within ten (10) days of receipt of sampling results from each sampling activity.
Such data shall be provided in a electronic format (i.e., computer disk) showing
the location,  medium, and results. Within seven (7) days of completion of field
activities, Respondents shall notify U.S.
EPA, in writing, of such completion.

         During Site Characterization, Respondent(s) shall provide U.S. EPA with
the following deliverables, as described in the RI/FS Guidance and/or Work Plan:


                                                               August 17, 1992


<PAGE>


                                                         4

                           (a)   Technical   Memorandum   on  Modeling  of  Site
         Characteristics.   Where   Respondents   propose   that   modeling   is
         appropriate,   Respondents  shall  submit  a  Technical  Memorandum  on
         Modeling parameters within 30 days of their proposal.

                           (b)      Preliminary Site Data Summary.  Within 30
         days of completion of the field sampling and receipt of
         laboratory analysis for any phase of the remedial
         investigation, Respondents shall submit a Site Data Summary
         to U.S. EPA.

                           (c) Draft Remedial  Investigation  Report. Within 120
         days of  completion  of the on-site work for all phases of the remedial
         investigation,  Respondents  shall submit a draft RI Report  consistent
         with the RI/FS Guidance, Work Plan, and Sampling and Analysis Plan.

TASK 4 - TREATABILITY STUDIES (R1/FS Manual, Chapter 5)

                  Respondents shall conduct treatability  studies,  except where
they can demonstrate to U.S. EPA's  satisfaction  that they are not needed.  The
treatability  studies shall include  determination  of the need for and scope of
such studies and the design and  completion of the studies,  as described in the
RI/FS  Guidance,  Chapter 5.  During  treatability  studies,  Respondents  shall
provide U.S. EPA with the following deliverables:

                           (a)      Treatability Testing Work Plan.  If U.S. EPA
          determines  that  treatability  testing  is  required,  within 90 days
          thereafter  (or as  specified  by U.S.  EPA),  Respondents  shall
          submit a Treatability Testing Work Plan. The Treatability Testing
          Work Plan shall include the following components:
                             (i)    Treatability Testing Schedule;
                            (ii)    Treatability Study Sampling and Analysis
         Plan (if the need for a separate or revised QAPP or FSP is
         identified by U.S. EPA); and
                           (iii)    Treatability Study Site Health and
         Safety Plan (if the need for a revised health and safety
         plan is identified by U.S. EPA).
                           (c) Treatability Study Evaluation  Report.  Within 45
         days of receipt of  treatability  testing  results,  Respondents  shall
         submit a treatability  study evaluation report as provided in the RI/FS
         Guidance and Work Plan.






                                                              August 17, 1992


<PAGE>


                                                         5

TASK         5 -  DEVELOPMENT  AND  SCREENING  OF Remedial  Alternatives  (Rl/FS
             Manual, Chapter 4)

         Respondents  shall  develop an  appropriate  range of waste  management
options  that  will be  evaluated  through  the  development  and  screening  of
alternatives, as provided in the RI/FS Guidance, Chapter 4 and Work Plan. During
the development and screening of  alternatives,  Respondents  shall provide U.S.
EPA with the following deliverables:

                           (a) Memorandum on Remedial Action Objectives.
          Within 60 days of receipt of U.S. EPA's Baseline Risk
         Assessment,  Respondents  shall submit a memorandum on remedial  action
         objectives.  U.S. EPA's Baseline Risk Assessment  shall be submitted to
         Respondents  after all sampling phases approved in the RI Work Plan are
         completed.
                           (b)   Memorandum  on  Development   and   Preliminary
         Screening of Alternatives, Assembled Alternatives Screening Results and
         Final  Screening.  Within  30 days of  approval  of the  memorandum  on
         remedial  action  objectives,  Respondents  shall  submit a  memorandum
         summarizing  the  development  and screening of remedial  alternatives,
         including an  alternatives  array  document,  as described in the RI/FS
         Guidance.


TASK     6 - DETAILED ANALYSIS OF REMEDIAL ALTERNATIVES (RI/FS Guidance, Chapter
         6)

         Respondents shall conduct a detailed analysis of remedial alternatives,
as described in the RI/FS Guidance, Chapter 6 and Work Plan. During the detailed
analysis of alternatives,  Respondents shall provide U.S. EPA with the following
deliverables:

                           (a) Report on Comparative  Analysis and  Presentation
         to U.S.  EPA.  Within  10  days  of  approval  of a  memorandum  on the
         development and screening of remedial  alternatives,  Respondents shall
         submit a report to U.S. EPA  summarizing the results of the comparative
         analysis of the remedial  alternatives.  within  fourteen  (14) days of
         submitting the original report,  Respondents  shall make a presentation
         to U.S. EPA  summarizing  the  findings of the RI and  remedial  action
         objectives and  presenting the results of the nine criteria  evaluation
         and comparative analysis as described in the RI/FS Guidance.
                           (b)      Draft Feasibility Study Report.  Within 20
         days of the above presentation, Respondents shall submit a


                                                               August 17, 1992


<PAGE>


                                                         6

         draft FS report which reflects the findings in U.S. EPA's Baseline Risk
         Assessment  and  documents  the  development  and  analysis of remedial
         alternatives.  Respondents  shall  refer  to  Table  6-5 of  the  RI/FS
         Guidance  for the content and format of this  report.  The report,  any
         amendments thereto, and the administrative  record established pursuant
         to Section 113(k) of CERCLA,  42 U.S.C. ss. 9313(k),  shall provide the
         basis for a Proposed  Plan to be issued by U.S. EPA pursuant to Section
         117(a) of CERCLA, 42 U.S.C. ss. 9617(a).

         Notwithstanding  the  schedules  contained  herein,  Respondents  shall
submit the final  draft RI and FS no later than 2-8  months  from the  effective
date of the Consent  Order.  This time period may be extended for Force  Majeure
events and at the agreement of the parties to the Consent Order.  If the parties
cannot agree to such extension,  the issue is subject to the Dispute  Resolution
provisions contained in Section XVIII of the Consent Order.


Task 7 INTERIM REMEDIAL ACTION or NEW REMOVAL ACTION

         Upon Respondents' proposal and U.S. EPA's determination that an Interim
Remedial Action or new Removal Action would result in a significant reduction in
mobility,  toxicity,  and volume of  contamination at the Site in defined source
areas,  Respondents will submit a Work Plan for such action within 30 days after
such  determination.  Such  Work  Plan  shall  address  the  performance  of the
necessary  actions.  Any Interim Remedial Action or new Removal Action Work Plan
will be  consistent  with U.S. EPA guidance on  conducting  remedial  design and
remedial actions, the NCP, and shall include subtasks outlined in Tasks I and VI
above,  unless  otherwise agreed to by U.S. EPA. Any Interim Remedial or Removal
Action shall be consistent  with  long-term  remedial  action to be taken at the
Site.



                                                               August 17, 1992


<PAGE>


                                                         7

                                   REFERENCES

     The  following  list,  although not  comprehensive,  comprises  many of the
regulations and guidance documents that apply to the RI/FS process:

The (revised) National Contingency Plan

"Guidance for Conducting Remedial Investigations and Feasibility
Studies Under CERCLA," U.S. EPA, Office of Emergency and Remedial
Response, October 1988, OSWER Directive No. 9355.3-01.

"Interim Guidance on Potentially Responsible Party Participation
in Remedial Investigation and Feasibility Studies," U.S. EPA,
office of Waste Programs Enforcement, Appendix A to OSWERR
Directive No. 9355.3-01.

"Guidance on Oversight of Potentially Responsible Party Remedial
Investigations and Feasibility Studies," U.S. EPA, Office of
Waste Programs Enforcement, OSWER Directive NO. 9835.3.

"A Compendium of Superfund Field Operations Methods, "Two
Volumes, U.S. EPA, Office of Emergency and Remedial Response,
EPA/540/P-87/001a, August 1987, OSWER Directive No. 9355.0-14.

"EPA NEIC Policies and  Procedures  Manual," May 1978,  revised  November  1984,
EPA-330/9-78-001-R.

"Data Quality Objectives for Remedial Response Activities," U.S.
EPA, Office of Emergency and Remedial Response and Office of
Waste Programs Enforcement, EPA/540/G-87/003, March 1987, OSWER
Directive No. 9335.O-7B.

"Guidelines and Specifications for Preparing Quality Assurance
Project Plans," U.S. EPA, Office of Research and Development,
Cincinnati, OH, QAMS-004/80, December 29, 1980.

"Interim Guidelines and Specifications for Preparing Quality
Assurance Project Plans," U.S. EPA, Office of Emergency and
Remedial Response, QAMS-005/80, December 1980.

"Users Guide to the EPA Contract Laboratory Program," U.S. EPA
Sample Management Office, August 1982.

"Interim Guidance on Compliance with Applicable or Relevant and
Appropriate Requirements," U.S. EPA, office of Emergency and
Remedial Response, July 9, 1987, OSWER Directive No. 9234.0-05.



                                                              August 17, 1992


<PAGE>


                                                         8
"CERCLA Compliance with Other Laws Manual," Two Volumes, U.S.
EPA, Office of Emergency and Remedial Response, August 1988
(draft), OSWER Directive No. 9234.1-01 and -02.

"Guidance on Remedial Actions for Contaminated Ground Water at
Superfund Sites," U.S. EPA, Office of Emergency and Remedial
Response, (draft), OSWER Directive No. 9283.1-2.

"Draft Guidance on Preparing Superfund Decision Documents," U.S.
EPA, Office of Emergency and Remedial Response, March 1988, OSWER
Directive No. 9355.3-02.

"Risk Assessment Guidance for Superfund - Volume II Environmental
Evaluation Manual," March 1989, EPA/540/1-89/001.

"Guidance for Data Useability in Risk Assessment," October, 1990,
EPA/540/G-90/008.

"Performance of Risk Assessments in Remedial
Investigation/Feasibility Studies (RI/FSs) Conducted by
Potentially Responsible Parties (PRPs)," August 28, 1990, OSWER
Directive No. 9835.15.

"Role of the Baseline Risk Assessment in Superfund Remedy
Selection Decisions," April 22, 1991, OSWER Directive No. 9355.0
30.

"Health and Safety Requirements of Employees Employed in Field
Activities," U.S. EPA, Office of Emergency and Remedial Response,
July 12, 1981, EPA Order No. 1440.2.

OSHA Regulations in 29 CFR 1910.120 (Federal Register 45654, December 19, 1986).

"Interim Guidance on Administrative Records for Selection of
CERCLA Response Actions," U.S. EPA, Office of Waste Programs
Enforcement, March 1, 1989, OSWER Directive No. 9833.3A.

"Community Relations in Superfund: A Handbook," U.S. EPA, Office
of Emergency and Remedial Response, June 1988, OSWER Directive
No. 9230.033B.

"Community Relations During Enforcement Activities And
Development of the Administrative Record," U.S. EPA, Office of
Programs Enforcement, November 1988, OSWER Directive No.
9836.01A.



                                                              August 17, 1992


<PAGE>


                      APPENDIX 2 TO PARTIAL CONSENT DECREE
                            FUNDING AGREEMENT FOR THE
                          STANDARD STEEL SUPERFUND SITE
                    REMEDIAL INVESTIGATION/FEASIBILITY STUDY

         This Funding  Agreement  ("Agreement")  is made by and between  CHUGACH
ELECTRIC ASSOCIATION,  INC. ("Chugach") and the UNITED STATES OF AMERICA, acting
on behalf of the Department of  Transportation  (including the Federal  Railroad
Administration),  and the Department of Defense (including the Defense Logistics
Agency and the Defense  Reutilization and Marketing  Service) for the purpose of
providing  the  funding  required  to  conduct  a  remedial   investigation  and
feasibility  study  ("RI/FS")  at the  Standard  Steel and Metals  Salvage  Yard
Superfund Site, 2400 Railroad Avenue, Anchorage, Alaska 99501.
         WHEREAS, the United States Environmental Protection Agency
("EPA") has placed the Standard Steel Superfund Site on the
National Priorities List (55 Fed. Reg. 35502, 35509 (August 30,
1990)), and made demand on certain potentially responsible
parties to conduct response action at the Site;
         WHEREAS, the necessary first step preceding any further
response action is the conduct of an RI/FS;
         WHEREAS,   the   parties  to  this   Agreement   agree  that  the  most
cost-effective  means  of  conducting  the  RI/FS  involves  the use of  private
contractors  retained  by,  and  working  under  the  direct  supervision  of, a
nongovernment entity;
         WHEREAS,  Chugach has entered into an  Administrative  order on Consent
with EPA governing the specific tasks to be accomplished and standards to be met
during the conduct of the RI/FS and

FUNDING AGREEMENT - September 23, 1992
PAGE 1

<PAGE>


requiring payment to EPA of response and oversight costs incurred
by EPA with respect to the RI/FS;
         WHEREAS,   the  parties  agree  that  certain  federal   agencies  will
contribute  to the costs of the RI/FS,  including  EPA-incurred  and  reimbursed
response  and  oversight  costs  related to the RI/FS,  as provided  for in this
Agreement; and
         NOW, THEREFORE,  in consideration of the mutual promises and conditions
contained herein,  and without  admission of any fact or legal  conclusion,  the
parties hereby agree:
                                   DEFINITIONS
         a.       "Chugach" shall mean Chugach Electric Association,
Inc., an Alaska nonprofit electric cooperative corporation.
         b.       "Settling Federal Agencies" shall mean the Department
of Transportation (including the Federal Railroad
Administration), and the Department of Defense (including the
Defense Logistics Agency and the Defense Reutilization and
Marketing Service).
         c.  "Site"  shall  mean the  Standard  Steel and  Metals  Salvage  Yard
Superfund  Site,  2400  Railroad  Avenue,  Anchorage,   Alaska  99501,  and  any
surrounding  areas where work is  necessary  to  complete  the RI/FS that is the
subject of this Agreement.
         d.  "Consent  Order"  shall  mean the  Administrative  Order on Consent
entered in the proceedings styled IN THE MATTER OF THE STANDARD STEEL AND METALS
SALVAGE YARD SUPERFUND SITE, EPA Docket Nos.  1091-07-02-107  and 1091-07-01-120
and dated September 23, 1992.

FUNDING AGREEMENT - September 23, 1992
PAGE 2

<PAGE>


         e.  "RI/FS"  shall  mean  any and all  work  conducted,  or  incidental
expenses  incurred,  pursuant to the Consent  Order defined in subpart d, supra,
but does not include the costs of removing  scrap from the Site,  whether or not
that material is contaminated.
         f. "Oversight  Costs" shall mean all direct and indirect costs incurred
by EPA in  overseeing  Chugach's  implementation  of the  Consent  Order  and in
conducting  activities  required as part of the RI/FS  under the Consent  Order,
including,  without limitation, costs incurred by EPA in conducting the Baseline
Risk  Assessment,  as defined in the Consent Order,  in obtaining  access to the
Site, if necessary,  and in implementing a community  relations  program for the
Site.
                          PAYMENTS BY THE UNITED STATES
         1. The United States, on behalf of the Settling Federal Agencies, shall
reimburse Chugach seventy-five percent (75%) of all Oversight Costs and costs of
performing  the  RI/FS  pursuant  to  the  Consent  Order,  including,   without
limitation,  all costs of RI/FS-related  work performed by Chugach's  contractor
(and its subcontractors and agents) prior to execution of the Consent Order.
         2. Payment by the United  States  pursuant to Paragraph 1 shall be made
only for  Oversight  Costs  charged to Chugach and the costs of  performing  the
RI/FS on time and in  satisfactory  fashion as required under the Consent Order,
including  costs for  RI/FSrelated  work  performed  prior to  execution  of the
Consent Order as

FUNDING AGREEMENT - September 23, 1992
PAGE 3

<PAGE>


provided in Paragraph 1.  The Settling Federal Agencies shall not
reimburse other expenses, including, but not limited to:
                  a.       Payment of fines, stipulated penalties, or other
         sanctions imposed as a result of any failure to complete
         work required by the Consent Order on time and in
         satisfactory fashion;

                  b.       Payment of Chugach's administrative expenses,
         including:  (1) costs incurred in connection with contractor
         selection and supervision; and (2) costs incurred in
         connection with Chugach's oversight of its contractors
         working at the Site; and

                  c.       Payment of Chugach's attorneys' fees.

         3.       Payments pursuant to Paragraph 1 shall be made in
         accordance with the following provisions:
                  a. For RI/FS costs other than Oversight Costs,  Chugach shall,
         on a  bimonthly  basis  until  Chugach  certifies  that  the  RI/FS  is
         completed,  submit to the Project  Coordinator for the settling Federal
         Agencies  (specified in Paragraph 17) payment demands with accompanying
         invoices  that  precisely  detail  the RI/FS work  performed  for which
         payment is demanded  (itemized  by task),  the expenses  incurred,  the
         hours required for performance of such work and the charges therefor as
         billed to Chugach and allocated to the United States in accordance with
         Paragraphs 1 and 2.

                  b. In addition to the payment procedure  provided in Paragraph
         3.a., Chugach shall submit to the Project  Coordinator for the Settling
         Federal  Agencies a payment  demand  dated  September  30, 1992 with an
         accompanying  invoice for the costs (not including  Oversight Costs) of
         all RI/FS related work  performed  through August 31, 1992 by Chugach's
         contractor,  together with any  subcontractors and agents, as billed to
         Chugach  and  allocated  to  the  United  States  in  accordance   with
         Paragraphs 1 and 2.

                  c.       Each payment demand made under Paragraphs 3.a. and
         3.b. shall specify that the amount demanded does not include
         Oversight Costs and shall be accompanied by a certification
         executed by Chugach as follows:

                  "Chugach  certifies that the costs  referenced in the attached
                  invoice were properly  incurred  pursuant to the Consent Order
                  and the separate Funding Agreement governing

FUNDING AGREEMENT - September 23, 1992
PAGE 4

<PAGE>


                  submission of this request for payment.  Payment by the United
                  States of all amounts in the  attached  invoice as demanded by
                  Chugach shall be accepted by Chugach as payment in full of all
                  sums owing under the Funding Agreement by the Settling Federal
                  Agencies  for  services  performed  by  Chugach's  consultant,
                  together  with  any  services  billed  to such  consultant  by
                  others,  through the closing  date  reflected  on the attached
                  invoice."

                  d.  For  Oversight  Costs,  Chugach  shall,  upon  payment  of
         Oversight  Costs as demanded or invoiced by EPA in accordance  with the
         Consent  Order,  submit to the  Project  Coordinator  for the  Settling
         Federal Agencies a separate payment demand with an accompanying copy of
         EPA's  demand or invoice for  Oversight  Costs as billed to Chugach and
         allocated to the United States in accordance with Paragraphs 1 and 2.

                  e.       The payment demand made under Paragraph 3.d. shall
         be accompanied by a certification executed by Chugach as
         follows:

                  "Chugach  certifies that the Oversight Costs referenced in the
                  attached  invoice or demand were properly  incurred by Chugach
                  pursuant  to  the  Consent  order  and  the  separate  Funding
                  Agreement  governing  submission  of this request for payment.
                  Payment by the United  States of all  amounts in the  attached
                  invoice or demand as demanded by Chugach  shall be accepted by
                  Chugach as payment in full of all sums owing under the Funding
                  Agreement by the Settling Federal Agencies for oversight Costs
                  through the date of the attached invoice Or demand.

                  f. Payment of all amounts under this  Agreement  shall be made
         directly  to  Chugach's   Project   coordinator   in  accordance   with
         instructions accompanying the payment demand and shall include interest
         calculated  and added to each  payment by the United  states,  accruing
         from the date of the payment  demand to the date of payment at the rate
         provided in CERCLA ss. 107(a),  42 U.S.C. ss. 9607(a).  For purposes of
         this  paragraph,  the "date of payment"  shall be deemed to be the date
         that a check is issued by the  United  States to satisfy  each  payment
         demand under this Agreement.

FUNDING AGREEMENT - September 23, 1992
PAGE 5

<PAGE>


                  g.  The  United  States  shall  make  payment  of all  amounts
         hereunder,   except  such  amounts  as  are  withheld  or  disputed  in
         accordance   with  this   subparagraph   3.g.,  to  Chugach's   Project
         Coordinator within 90 days after the date of the payment demand. If the
         United States in good faith  questions or contests any invoiced fees or
         expenses,  it shall have the right to withhold payment of such disputed
         amount;  provided,  however,  the United States shall notify Chugach in
         writing of any  disputed  amount or item set forth in a payment  demand
         within  thirty (30) days of the date of such  payment  demand and shall
         make a good faith effort to resolve such dispute  quickly with Chugach.
         If a dispute  regarding  invoiced  fees or expenses  cannot be resolved
         informally,  the United States shall commence dispute resolution within
         90 days after the date of the payment demand.

         4. Payments by the United States on behalf of Settling Federal Agencies
are subject to the  availability  of  appropriated  funds.  No provision of this
Agreement shall be interpreted as or constitute a commitment or requirement that
the Settling Federal Agencies obligate or pay funds in contravention of the Anti
Deficiency Act, 31 U.S.C. ss. 1341.
                         CONDUCT OF THE RI/FS BY CHUGACH

         5. Chugach shall be responsible,  without  further  contribution by the
Settling  Federal  Agencies,  for the  conduct  of the  RI/FS  in a  timely  and
workmanlike  fashion,  in accordance  with the  provisions of the Consent Order.
Chugach  shall  select  and  engage  such  contractors,  consultants  and  other
personnel  as may be  required  pursuant  to the  Consent  order,  or  otherwise
necessary to complete the RI/FS,  and shall be exclusively  responsible  for any
fines, stipulated penalties, or other sanctions imposed as a result of Chugach's
or its agents', employees', or contractors' failure to complete work required by
the Consent Order on time

FUNDING AGREEMENT - September 23, 1992
PAGE 6

<PAGE>


and in  satisfactory  fashion.  Nothing  in this  Agreement,  however,  shall be
construed  to  restrict  any right  Chugach  may have to contest any such fines,
penalties, or sanctions.
                      RECORDS, AUDITING, AND RECONCILIATION
         6. Chugach  shall  maintain all books,  records,  documents,  and other
evidence,   including  descriptions  of  accounting  procedures  and  practices,
necessary to document each and every expenditure relating to the RI/FS. The same
records  shall be subject to the record  preservation  provisions of the Consent
Order, and shall not be disposed of or destroyed except in accordance with those
provisions and the terms of this Agreement.
         7. In addition,  Chugach shall notify the Project  Coordinator  for the
Settling Federal Agencies  (specified in Paragraph 17) at least ninety (90) days
before documents relating to RI/FS  expenditures are to be destroyed;  provided,
however,  no documents  relating to RI/FS expenditures may be destroyed until at
least  ninety  (90) days after  Chugach's  delivery of the  accounting  required
pursuant to Paragraph  9. If,  within  ninety (90) days after being  notified of
Chugach's intent to destroy any documents  relating to RI/FS  expenditures,  any
Settling Federal Agency requests that the documents be saved, Chugach shall make
the original  documents  available  or provide  accurate  copies  thereof to the
Settling Federal Agencies' Project coordinator. Chugach's obligations under this
Paragraph  shall  terminate  three (3) years  after  Chugach's  delivery  of the
accounting required pursuant to Paragraph 9.

FUNDING AGREEMENT - September 23, 1992
PAGE 7

<PAGE>


         8.  Chugach  shall  establish  a  single   designated   repository  for
accounting  and  records  maintenance;  shall  keep the  records  referenced  in
Paragraph 6 current in accordance with good accounting practice;  and shall make
those records available to the Settling Federal Agencies at all reasonable times
for inspection, audit, and reproduction.
         9. Not later than 120 days after  Chugach  certifies  completion of the
RI/FS  pursuant to Consent Order  Paragraph  27.1,  Chugach shall deliver to the
Project  Coordinator  for  the  Settling  Federal  Agencies  a  full  and  final
accounting of the expenditures relating to the conduct of the RI/FS.
         10. Should the final accounting  rendered pursuant to Paragraph 9 or an
audit by any competent authority reveal that RI/FS expenditures were contrary to
the  provisions  of Paragraph 2, Chugach  shall  reimburse the United States for
those  expenditures  that  Chugach  agrees were  contrary to the  provisions  of
Paragraph 2 and shall commence dispute  resolution with respect to any contested
amounts within 90 days after delivery of the audit or final accounting.
                                     REPORTS
         11.      Chugach shall provide copies of the following items to
the Project Coordinator for the Settling Federal Agencies:
         *        Copies of the progress reports required to be submitted
to EPA under Paragraph 13.1 of the Consent Order
         *        Draft and Final Work Plans
         *        Draft Sampling and Analysis Plan


FUNDING AGREEMENT - September 23, 1992
PAGE 8

<PAGE>


         *        Site Health and Safety Plan
         *        Site Data Summaries for the following:
                           *        Groundwater Well Samples
                           *        Soil Borings
                           *        Surface Soil Samples
                           *        Creek Samples
                           *        Air Samples
                           *        Surface Water Run-Off Evaluation
         *        Draft and Final RI Reports
         *        Draft and Final FS Reports
                               DISPUTE RESOLUTION
         12. Should the parties disagree about any material aspect of the effect
or  interpretation  of this  Agreement,  either party may send the other party a
written  notice which  outlines the nature of the dispute and requests  informal
negotiations.  If the parties  cannot reach an agreed  resolution  within thirty
(30) working days,  each party  reserves  whatever  rights it may have to secure
relief in a court of  competent  jurisdiction.  Nothing in  Paragraph  2 of this
Agreement  shall be  construed  as a waiver of any  party's  right,  if any,  to
collect costs,  including  attorneys'  fees,  awarded by the court in connection
with dispute resolution.
                                    COVENANTS
         13. In  consideration  of the actions  that will be  performed  and the
payments  that will be made by Chugach  under the terms of this  Agreement,  the
United States covenants not to sue Chugach for  contribution  pursuant to CERCLA
ss.ss. 107(a) or 113(f), 42 U.S.C. ss.ss. 9807(a) or 9613(f), state statutory or
common law, or

FUNDING AGREEMENT - September 23, 1992
PAGE 9

<PAGE>


any other  provision of law, with respect to the costs of conducting  the RI/FS,
together with any other matter covered by this Agreement. This covenant:
                  a.       Applies only to suits for contribution relating to
         the costs of conducting the RI/FS, and does not restrict any
         other action by the United states, including, but not
         limited to:

                           (1)      An action pursuant to CERCLA ss. 107(a),
                  42 U.S.C. ss. 9607(a), to recover costs expended by the
                  Hazardous Substances Superfund or to receive sums for
                  damages for injury to natural resources;

                           (2)      An action pursuant to CERCLA ss. 107(a) or
                  113(f), 42 U.S.C. ss.ss. 9607(a), 9613(f), state statutory
                  or common law, or any other provision of law, for
                  contribution relating to matters not covered by this
                  Agreement;

                  b.       Is conditioned upon the complete and satisfactory
         performance by Chugach of its obligations under this
         Agreement and the Consent Order; and

                  c.       Extends only to Chugach and not to any other
         person.

         14. In  consideration  of the payments  that will be made by the United
States  on  behalf  of the  Settling  Federal  Agencies  under the terms of this
Agreement,  Chugach  covenants  not to sue the  United  States  or any  Settling
Federal Agency for contribution  pursuant to CERCLA ss.ss.  107(a) or 113(f), 42
U.S.C.  ss.ss.  9607(a) or 9613(f),  state statutory or common law, or any other
provision of law,  with respect to the costs of conducting  the RI/FS,  together
with any other matter covered by this Agreement. This covenant:
                  a.  Applies  only to suits for  contribution  relating  to the
         costs of conducting  the RI/FS,  and does not restrict any other action
         by Chugach, including, but not limited, to an action pursuant to CERCLA
         ss.ss. 107(a) or 113(f), 42 U.S.C.

FUNDING AGREEMENT - September 23, 1992
PAGE 10

<PAGE>


          ss.ss. 9607(a) or 9613(f), state statutory or common law, or any other
         provision  of law for  contribution  relating to matters not covered by
         this Agreement;

                  b.       Is conditioned upon the complete and satisfactory
         performance by the United States and the Settling Federal
         Agencies of their obligations under this Agreement.

                  c.       Extends only to the United States and the Settling
         Federal Agencies and not to any other person.

                              ABSENCE OF ALLOCATION
         15. Nothing in this Agreement  shall be construed as an indication that
the parties hereto have agreed to an allocation between themselves, either under
CERCLA ss. 113, 42 U.S.C.  ss. 9613 or otherwise,  of any costs of response with
respect  to the Site  other than  those of the RI/FS  required  pursuant  to the
Consent Order.  Each party to this  Agreement  expressly  acknowledges  that the
commitments  undertaken  pursuant to this  Agreement  and the Consent  Order are
without  prejudice to any position that any party to this  Agreement may take in
the course of further discussions regarding contribution,  and without admission
that any particular allocation is appropriate.
         16. Nothing in this Agreement  shall be construed as an indication that
the  parties  hereto  accept or agree  that any  particular  allocation  between
themselves  and any other person or entity is  appropriate,  either under CERCLA
ss.  113, 42 U.S.C.  ss. 9613 or  otherwise,  as to any  matter,  obligation  or
liability,  including without limitation,  EPA's past costs, costs of conducting
the RI/FS and other costs of response incurred at the Site.

FUNDING AGREEMENT - September 23, 1992
PAGE 11

<PAGE>


                         DESIGNATED PROJECT COORDINATORS
         17.      All reports, plans, approvals, disapprovals, and other
written communication required or permitted by this Agreement
shall be sent to each party's designated Project Coordinator. The
Project Coordinators are:
         For the Settling Federal Agencies:

                  Bruce Noble, Environmental Specialist
                  Defense Reutilization and Marketing Service (DRMS-SHP)
                  Federal Center
                  74 North Washington
                  Battle Creek, Michigan 49017-3091
                  (616) 961-7412
                  FAX: (616) 961-5841

         For Chugach:

                  Carol Johnson, Esq.
                  General Counsel
                  Chugach Electric Association, Inc.
                  P.O. Box 196300
                  Anchorage, Alaska 99519-6300
                  (907) 762-4790
                  FAX: (907) 762-4688

                               COMMUNITY RELATIONS
         18.  The  Settling  Federal  Agencies  may  participate  fully  in  any
community  relations  activities  required by the Consent  Order.  Chugach shall
provide  reasonable  prior  written  notice to the Project  Coordinator  for the
Settling Federal Agencies of all such community relations activities.
         19.      Chugach shall provide advance drafts of any press
release or other  public  statement  relating  to the RI/FS to the  Project
Coordinator  for the  Settling  Federal  Agencies,  together  with a  reasonable
opportunity to supply  comments  before the statement is released.  The Settling
Federal Agencies shall be

FUNDING AGREEMENT - September 23, 1992
PAGE 12

<PAGE>


offered  the  opportunity  to join in the  final  draft  of the  statement,  and
otherwise   shall  retain  their  rights  to  offer   separate   contemporaneous
statements.
                                  MISCELLANEOUS
         20. This Agreement applies to and is binding upon the United States and
Chugach,  together  with  their  heirs,  successors,  and  assigns.  changes  in
ownership  or  corporate  status of Chugach,  including  but not limited to, any
transfer  of  assets or real or  personal  property  shall  not alter  Chugach's
responsibilities under this Agreement.
         21. The undersigned representatives of each party certify that they are
fully  authorized by the party or parties they represent to enter into the terms
and  conditions  of this  Agreement,  and to bind the parties they  represent to
those terms.
         22.       This Agreement shall not be modified except by
appropriate written instrument executed by the United States and
Chugach.
         23.      This Agreement does not affect the rights of the United
States or Chugach against any person or entity that is not a
party to this Agreement or bound by its terms.
         24.      This Agreement does not relieve Chugach of any
obligation  it may have to obtain and comply with any federal,  state,  or local
permit or other form of permission  required to conduct the work required by the
Consent order or by this Agreement.


FUNDING AGREEMENT - September 23, 1992
PAGE 13

<PAGE>


         25. Chugach shall not, by any manner or method, take, acquire,  accept,
or show profit from the United States or any agency thereof from or by virtue of
payments made pursuant to this Agreement.
                                 EFFECTIVE DATE
         26. This Agreement  shall be effective on, and not before,  the date of
execution  by the United  States.  Upon  execution  by the United  States,  this
Agreement  shall bind the parties hereto  retroactively  as to all amounts to be
reimbursed pursuant to Paragraphs 1 through 4.

DATED: 1/11/93             UNITED STATES OF AMERICA

                                              VICKI A. O'MEARA
                                              Acting Assistant Attorney General



                                              /s/ Michael D. Rowe

                                              By:  MICHAEL D. ROWE, Attorney
                                            United States Department of Justice
                                            Environment & Natural Resources
                                                         Division

DATED: 9/24/92             CHUGACH ELECTRIC ASSOCIATION, INC.



                                              /s/  David L. Highers

                                               By:      DAVID L. HIGHERS
                                                        General Manager


FUNDING AGREEMENT - September 23, 1992
PAGE 14

<PAGE>


                      APPENDIX 3 TO PARTIAL CONSENT DECREE
                        SECOND FUNDING AGREEMENT FOR THE
                         STANDARD STEEL SUPERFUND SITE:
                    SCRAP REMOVAL CONTRACTING AND ALLOCATION

                  This Second Funding  Agreement is made by and among the ALASKA
RAILROAD CORPORATION,  CHUGACH ELECTRIC ASSOCIATION, INC., WESTINGHOUSE ELECTRIC
CORPORATION,   MONTGOMERY  WARD  &  CO.,  INC.,   J.C.  PENNEY  COMPANY,   INC.,
BRIDGESTONE/FIRESTONE,  INC.,  THE UNITED STATES OF AMERICA  acting on behalf of
the Department of Transportation (including the Federal Railroad Administration)
and the  Department of Defense  (including  the Defense  Logistics  Agency,  the
Defense  Reutilization  and Marketing  Service,  and the Army/Air Force Exchange
Service),  WOODWARD-CLYDE CONSULTANTS,  and CECON CORPORATION for the purpose of
providing the funding  necessary to conduct  certain  scrap  removal  operations
required in connection  with an RI/FS being  conducted at the Standard Steel and
Metals  Superfund  Site,  and for the  additional  purpose of making  payment to
certain parties conducting work at the same Site.
                  WHEREAS,  Chugach  entered  into an  Administrative  Order  on
Consent  with the  United  States  Environmental  Protection  Agency  ("EPA") to
conduct an RI/FS for the Site on or about September 23,
1992;
                  WHEREAS,  Chugach has retained  Woodward-Clyde  Consultants to
conduct the RI/FS  pursuant to the  Administrative  Order on Consent and certain
EPA approved work plans;
                  WHEREAS,  the  United  States,  acting on  behalf  of  certain
Federal Agencies, has agreed to reimburse Chugach for 75% of the

                                                         1

<PAGE>



cost of conducting the RI/FS,  expressly excluding scrap removal costs, pursuant
to a funding agreement made effective on or about January 11, 1993;
                  WHEREAS,  the United  States and  Chugach  have  continued  to
negotiate with additional parties regarding allocation of both EPA past response
costs and RI/FS costs at the Site;
                  WHEREAS,  the United States,  Chugach,  and certain additional
parties  have  reached a  settlement  regarding  those  matters,  which  will be
recorded in a Consent Decree in connection with the case styled United States v.
Alaska Railroad Corn., No.
A91-589-CIV (D. Alaska);
                  WHEREAS,  removal of a  substantial  volume of scrap metal and
debris has been required to gain access to the Site for RI/FS purposes;
                  WHEREAS,  Woodward-Clyde,  CEcon,  and ARRC have  performed or
have retained  others to perform the necessary  Scrap Removal in  furtherance of
the RI/FS; and
                  WHEREAS, the parties expect Scrap Removal to be complete prior
to entry of the  Consent  Decree,  and wish to avoid  undue  delay in  providing
compensation for satisfactorily completed work;
                  NOW,  THEREFORE,  in  consideration of the mutual promises and
conditions  contained herein,  and without admission by any Party of any fact or
legal conclusion, the parties hereby agree:




                                                         2

<PAGE>



                                   DEFINITIONS
                  1.       "Agreement" shall mean this Second Funding
Agreement.
                  2.       "CERCLA" shall mean the Comprehensive Environmental
Response,  Compensation  and Liability  Act of 1980, as amended,  42 U.S.C.
ss.ss.  9601-75.  Terms not  specifically  defined  in this  Agreement  that are
defined in CERCLA or in implementing  regulations  promulgated  thereunder shall
have the meaning assigned to them in the statute or regulations.
                  3. "Consent Decree" shall mean that particular Partial Consent
Decree  which  the  Settling  Parties  have  executed  simultaneously  with this
Agreement,  and which the United  States  expects to lodge and subject to public
comment  pursuant  to  CERCLA  ss.  122(d)(2),  42  U.S.C.  ss.  9622(d)(2),  in
connection  with the case styled United  States v. Alaska  Railroad  Corp.,  No.
A91-589-CIV (D. Alaska).
                  4. "Contractors" shall mean Woodward-Clyde and CEcon. However,
nothing in this  Agreement  shall be construed to impose any  obligation  on any
Party not specifically set forth in the Agreement,  or to imply the existence of
any existing  relationship  between any Contractor and any other Party,  whether
contractual, quasi-contractual, or otherwise.
                  5.       "Effective Date" shall mean the date specified in
Paragraphs 52 and 53 of this Agreement.
                  6.       "Interest" shall mean interest at the rate specified
for interest on investments of the Hazardous Substances Superfund,

                                                         3

<PAGE>



in accordance with Section 107(a) of CERCLA, 42 U.S.C. ss. 9607(a),
compounded on an annual basis.
                  7.       "Party" means each entity executing this Agreement
and subject to its terms.
                  8. "RI/FS" shall mean the Remedial Investigation/  Feasibility
Study being  conducted at the Site.  The Parties  agree that RI/FS tasks include
Scrap Removal  necessary to obtain access to the underlying  ground for sampling
and other appropriate purposes.
                  Chugach  and the United  States  agree that the  exclusion  of
scrap  removal  costs  from the  definition  of RI/FS in the  funding  agreement
already  entered  between  them  shall  remain  in place  for  purposes  of that
agreement only, and that the present definition shall supersede it for all other
purposes.
                  9. "Scrap  Removal" shall mean the  elimination of scrap metal
and other debris from the Site and surrounding  areas as required to gain access
for purposes of conducting the RI/FS,  including  without  limitation:  securing
rights to dispose of scrap metal and debris;  sampling  the same scrap metal and
debris for  contamination;  analysis  of those  samples,  including  appropriate
quality  assurance and quality  control tasks;  cleaning,  sorting,  and loading
scrap and debris;  Settling PRP oversight tasks associated with scrap and debris
handling; and transportation and disposal of scrap and debris.
                  10.      "Scrap Removal Cost" shall mean the sum of the
amounts due as set forth in Addenda 1, 2, and 3.

                                                         4

<PAGE>



                  11.      "Settling Parties" shall mean the Settling PRPs
together with the United States.
                  12.      "Settling PRPS" shall mean the Alaska Railroad
Corporation, Chugach Electric Association, Inc., Westinghouse
Electric Corporation, Montgomery Ward & Co., Inc., J.C. Penney
Company, Inc., and Bridgestone/Firestone, Inc.
                  13.      "Site" shall mean the Standard Steel and Metals
Superfund Site, 2400 Railroad Avenue, Anchorage, Alaska 99501.
                  14.      "Unattributed Share" shall mean an amount equal to
the difference between the sum of the shares assigned to each Party
pursuant to Paragraph 24 and the Scrap Removal Cost.
                                     PARTIES
                  15.      "Alaska Railroad Corporation" ("ARRC") is a public
corporation of the State of Alaska created by Alaska Statute 42.40
with its principal place of business in Anchorage, Alaska.
                  16.      "Chugach Electric Association, Inc." ("Chugach") is
an Alaska electric cooperative corporation with its principal place
of business in Anchorage, Alaska.
                  17.      "Bridgestone/Firestone, Inc." ("Bridgestone/
Firestone") is an Ohio  corporation with its principal place of business in
Nashville,  Tennessee, which is qualified to do business, and is doing business,
in the State of Alaska.
                  18.      "J. C. Penney Company, Inc." ("J.C. Penney") is a
Delaware corporation with its principal place of business in


                                                         5

<PAGE>



Plano, Texas, which is qualified to do business,  and is doing business,  in the
State of Alaska.
                  19.  "Montgomery Ward & Co., Inc."  ("Montgomery  Ward") is an
Illinois corporation with its principal place of business in Chicago,  Illinois,
which is  qualified  to do  business,  and is doing  business,  in the  State of
Alaska.
                  20.      "Westinghouse Electric Corporation" ("Westinghouse")
is a  Pennsylvania  corporation  with its  principal  place of  business in
Pittsburgh,  Pennsylvania,  which  is  qualified  to do  business,  and is doing
business, in the State of Alaska.
                  21.      "Woodward-Clyde Consultants" ("Woodward-Clyde") is
a Delaware  corporation  with its  principal  place of  business in Denver,
Colorado, which is qualified to do business, and is doing business, in the State
of Alaska.
                  22.      "CEcon Corporation" ("CEcon") is a private
Washington  State  Corporation  with its  principal  place of  business  in
Tacoma, Washington, which is qualified to do business, and is doing business, in
the State of Alaska.
                  23. "United  States" is the United States of America,  and its
agencies,  departments, and instrumentalities,  including without limitation the
Department of Transportation (including the Federal Railroad Administration) and
the  Department of Defense  (including  the Defense  Logistics  Agency,  Defense
Reutilization and Marketing Service, and the Army/Air Force Exchange Service).

                   PAYMENTS BY SETTLING PARTIES (CONTRIBUTION)

                                                         6

<PAGE>



                  24.      The Settling Parties agree to allocate their alleged
liability for the Scrap Removal Cost as follows:
                  ARRC                                              $ 69,114.21
                  Chugach                                             82,522.06
                  Bridgestone/Firestone                                3,194.81
                  J.C. Penney                                         11,277.70
                  Montgomery Ward                                     10,510.94
                  Westinghouse                                        31,117.49
                  United States                                      472,626.08
                  Unattributed Share                                 180,858.45

                  Scrap Removal Cost                                $861,221.74

                  25. ARRC has provided services and payments to others relating
to Scrap  Removal  which  shall be applied as an offset  against  payment of the
share assigned to it in Paragraph 24, as provided in Addendum 3.
                  26. Not later than 30 days after the  Effective  Date provided
in Paragraph 52, each Settling PRP shall deliver  payment of the amount assigned
to it in Paragraph 24 to ARRC by cashier's  check or wire  transfer  pursuant to
instructions  ARRC will timely provide to each Settling Party in accordance with
Paragraph  46. The  instructions  shall allow for payment by cashier's  check or
wire transfer.  Sums paid by the Settling PRPs pursuant to this Paragraph  shall
be held in trust by ARRC and handled and disbursed in accordance with Paragraphs
31 through 35.

                                                         7

<PAGE>



                  27. Not later than 90 days after the  Effective  Date provided
in Paragraph 53, the United States shall deliver  payment of the amount assigned
to it in Paragraph 24, together with an amount equal to the Unattributed  Share,
to ARRC pursuant to  instructions  ARRC will timely provide to the United States
in accordance  with  Paragraph 46. The payment shall consist of a check drawn on
the United  States  Treasury in the amount of  $618,484.53,  and a wire transfer
drawn on the funds of the  Army/Air  Force  Exchange  Service  in the  amount of
$35,000.00.  Sums paid by the United States  pursuant to this Paragraph shall be
held in trust by ARRC and shall be handled  and  disbursed  in  accordance  with
Paragraphs 31 through 35.
                  28. The United  States  shall be  entitled  to a "credit"  for
payment of the  Unattributed  Share, as defined in Paragraph 3(d) of the Consent
Decree and as provided for in Paragraph 5(e) thereof.
                  29. In the event that any Settling  Party fails to make timely
payment in full as  required  in  Paragraphs  26 and 27, any amount  outstanding
shall bear Interest from the date of the default.
                  30.      Payments by the United States are subject to the
availability of appropriated funds.  No provision of this Agreement

                                                         8

<PAGE>



shall be interpreted as or constitute a commitment or requirement  that the
United States obligate or pay funds in contravention of the Anti-Deficiency Act,
31 U.S.C. ss. 1341.
                       HANDLING & DISBURSEMENT OF PROCEEDS
                  31. ARRC shall accept funds paid to it pursuant to  Paragraphs
26  and  27 in  trust,  shall  maintain  those  funds  in a  segregated  account
appropriate for funds held in trust,  and shall use or disburse those funds only
as instructed in this Agreement.
                  32. On or before  March 23,  1994 ARRC  shall  disburse  funds
received  to  and  including  that  date,  not to  exceed  $100,000,  to  CEcon.
Thereafter,  ARRC shall disburse funds in accordance  with Paragraphs 33 through
35.
                  33. Not more than 10 days after the time  allowed  for payment
by the Settling PRPs in accordance  with  Paragraph 26, ARRC shall  disburse the
proceeds  of such  payments  in  accordance  with the  instructions  provided in
Paragraph  34. Not more than 10 days after the time  allowed  for payment by the
United States in accordance  with Paragraph 27, ARRC shall disburse the proceeds
of such payment in accordance with the instructions provided in Paragraph 34.
                  34.      Disbursements by ARRC pursuant to Paragraph 33 shall
be applied pro rata against the amounts due as set forth in Addenda

                                                         9

<PAGE>



1, 2, and 3.  Late payments shall be similarly applied, inclusive
of any Interest that may have accrued.
                  35.  Not later than 30 days  after the final  disbursement  of
proceeds,  ARRC shall  provide a written  accounting  to each Party  documenting
receipts and disbursements under this Agreement.
                           a.      Any surplus funds arising from overpayment by
any Settling PRP or the United States shall be refunded to that Party within the
same 30 day period.
                           b.    Any surplus arising from any other source shall
be refunded on a pro rata basis to the Settling PRPs and the United
States within the same 30 day period.  The pro rata refund to the

United  States  shall  include  an  amount   calculated  on  the  basis  of  the
Unattributed Share.
                                   WARRANTIES
                  36.      Each Contractor and ARRC warrants to each Settling
PRP and the United States:
                           a.       that it has and will perform Scrap Removal
operations in a good and workmanlike  manner, with the skill and care ordinarily
exercised by members of the applicable Party's industry or profession practicing
under similar circumstances, and

                                                        10

<PAGE>



in accordance with generally accepted standards in the applicable
Party's field;
                           b.       that it has conducted its Scrap Removal
operations in accordance with all applicable Federal, state, and
local laws and regulations;
                           c.       that it has conducted its Scrap Removal
operations in accordance with any applicable provisions of scrap
removal workplan(s) approved by EPA for the Site;
                           d.       that subcontractors, suppliers, materialmen,
and any other  persons  or  entities  retained  by it in  connection  with Scrap
Removal  operations  have  been  paid  for  services  rendered,  or will be paid
promptly  upon  presentation  of a proper  invoice  in the  ordinary  course  of
business;
                           e.       that no claims have been asserted or 
threatened against it by such persons with regard to services performed as
part of Scrap Removal;
                           f.       that it has resolved, or will resolve at its
own expense,  any claims by others that may arise with regard to Scrap  Removal,
including,  without  limitation,  claims to ownership of scrap metal, or debris;
and
                           g.       that costs invoiced by way of its Addendum 
are those for Scrap Removal only, and not for any other work or task.

                                                        11

<PAGE>



                  37. In the event that any of the above  warranties is breached
by any  Contractor or ARRC,  the Party in breach shall take  whatever  steps are
required to remedy that breach at that Party's sole  expense,  and shall further
hold  harmless,  indemnify,  and defend the Settling  PRPs and the United States
with  regard to any claim,  expense,  damage,  or penalty  made or incurred as a
result of the breach.
                       RELEASE OF CLAIMS FOR SCRAP REMOVAL
                  38.  Each  Contractor  and ARRC  hereby  release  and  forever
discharge any and all persons or entities,  including,  without limitation,  the
Settling Parties,  from and against any and all claims,  obligations,  causes of
action, suits, debts, costs, expenses, damages, or demands whatsoever,  known or
unknown,  vested or  contingent,  at law or in equity which each  Contractor and
ARRC ever had,  now has,  or may  acquire  against  any or all such  persons  or
entities, separately or collectively,  arising out of, relating to, or otherwise
concerning Scrap Removal or the costs thereof.
                  39. The releases  set forth in  Paragraph  38 are  conditioned
upon payment  pursuant to  Paragraph  26, and shall have no force or effect with
regard to any Settling PRP that fails to make  payment in  accordance  with that
Paragraph.

                                                        12

<PAGE>



                  40.  The  releases  set forth in  Paragraph  38 are  similarly
conditioned  upon payment by the United  States  pursuant to  Paragraph  27. The
releases  shall have no force or effect with  regard to the United  States if it
fails to make payment in accordance with that Paragraph.
                        COVENANTS REGARDING CONTRIBUTION
                  41. In  consideration  of the actions  performed  and payments
made pursuant to the terms of this Agreement, the United States covenants not to
sue any of the Settling PRPs for contribution  pursuant to CERCLA ss.ss.  107(a)
or 113(f), 42 U.S.C. ss.ss.  9607(a) or 9613(f),  state statutory or common law,
or any other provision of law, with respect to Scrap Removal. This covenant:
                  a.       Applies only to suits for contribution relating to
                           Scrap Removal, and does not restrict any other
                           action by the United States, including, but not
                           limited to:

                           1.     An action pursuant to CERCLA ss. 107(a), 42
                                  U.S.C. ss. 9607(a) , to recover costs expended
                                  by the Hazardous Substances Superfund or to
                                  receive sums for damages for injury to natural
                                  resources;

                           2.     An action pursuant to CERCLA ss.ss. 107(a) or
                                  113(f), 42 U.S.C. ss. 9607(a), 9613(f), state
                                  statutory or common law, or any other
                                  provision of law, seeking contribution for any
                                  cost other than that of Scrap Removal as
                                  defined in this Agreement;


                                                        13

<PAGE>



                  b.       Is conditioned upon complete and satisfactory
                           performance by each Settling PRP of its obligations
                           under this Agreement; and

                  c.       Extends only to each Settling PRP, and not to any
                           other person or entity.

                  42. In  consideration  of the actions  performed  and payments
made pursuant to the terms of this Agreement, each Settling PRP covenants not to
sue the United States,  and further covenants not to sue any other Settling PRP,
for contribution  pursuant to CERCLA ss.ss.  107(a) or 113(f), 42 U.S.C.  ss.ss.
9607(a) or 9613(f),  state  statutory  or common law, or any other  provision of
law, with respect to Scrap Removal. This covenant:
                  a.       Applies only to suits for contribution relating to
                           Scrap Removal, and does not restrict any other
                           action by any Settling PRP, including, but not
                           limited to an action pursuant to CERCLAss.ss. 107(a)
                           or 113(f), 42 U.S.C.ss. 9607(a), 9613(f), state
                           statutory or common law, or any other provision of
                           law, seeking contribution for any cost other than
                           that of Scrap Removal as defined in this Agreement;

                  b.       Is conditioned upon complete and satisfactory
                           performance by the United States and by each
                           Settling PRP of its obligations under this
                           Agreement; and

                  c.       Extends only to the United States and to each other
                           Settling PRP, and not to any other person or
                           entity.

                              ASSIGNMENT OF RIGHTS

                                                        14

<PAGE>



                  43.      Each Settling Party hereby assigns any claims for
contribution   it  may  have  in  connection  with  Scrap  Removal  against
Scott-Douglas Industries, Inc., Pak-Trak Industries, Inc., or Douglas P. Hand to
ARRC.  Claims not  specifically  assigned in this Paragraph are reserved by each
Settling Party.
                              CONSTRUCTION OF TERMS
                  44.  Nothing  in  this  Agreement  shall  be  construed  as an
indication  that  the  Settling  Parties  have  agreed  to an  allocation  among
themselves,  either under CERCLA ss. 113, 42 U.S.C.  ss. 9613, or otherwise,  of
any  costs of  response  with  respect  to the Site  other  than  costs of scrap
Removal.  Each  Settling  Party  expressly  acknowledges  that  the  commitments
undertaken pursuant to this Agreement are without prejudice to any position that
any Party may take in the course of further discussions or litigation  regarding
contribution  for  other  costs of  response,  and  without  admission  that any
particular allocation is appropriate.
                  45.  Nothing  in  this  Agreement  shall  be  construed  as an
indication  that  the  Settling  Parties  accept  or agree  that any  particular
allocation  between  themselves  and any other person or entity is  appropriate,
either under CERCLA ss. 113, 42 U.S.C. ss. 9613 or otherwise,  as to any matter,
obligation, or liability, other than costs of Scrap Removal.

                                                        15

<PAGE>



                            NOTICES AND DOCUMENTATION
                  46. All written  communication  required or  permitted by this
Agreement  shall be  directed to the  individuals  and the  addresses  specified
below,  or to such other  individuals as the parties may hereafter  designate in
writing.

                                                        16

<PAGE>



For ARRC:                                   For Bridgestone/Firestone:

Phyllis Johnson                             Jim Vines, Staff Attorney
Vice President &                            Bridgestone/Firestone, Inc.
General Counsel                             50 Century Boulevard
Alaska Railroad Corp.                       Nashville, TN 37214
P.O. Box 107500                             (615) 872-1498
Anchorage, AK 99510-7500                    (615) 872-1490
(907) 265-2461
(907) 265-2443 Telefax                      Stephen M. Ellis
                                            Delaney, Wiles, Hayes, Reitman
                                            & Brubaker
                                            1007 West Third Ave., Suite 400
                                            Anchorage, AK 99510
                                            (907) 279-3581
                                            (907) 277-1331 Telefax

For Chugach:                                For Woodward-Clyde:

Carol Johnson, Esq.                         Phyllis A. Brunner
General Counsel                             Vice President
Chugach Electric Assn.                      Seattle Operation Mgr.
P.O. Box 196300                             Woodward-Clyde Consultants
Anchorage, AK 99519-6300                    3440 Bank of California Center
(907) 762-4790                              900 4th Avenue
(907) 762-4688 Telefax                      Seattle, WA 98164
                                            (206) 343-7933
R. Paul Beveridge                           (206) 343-0513
Heller, Ehrman, White &
  McAuliffe
6100 Columbia Center
701 Fifth Avenue
Seattle, WA 98104-7098
(206) 447-0900
(206) 447-0849 Telefax

For Westinghouse:                           For CEcon:

Stephen T. Wardzinski                       Charles Engstrom
Chief Counsel, Environmental                CEcon Corporation
  Affairs                                   P.O. Box 1514
Westinghouse Electric Corp.                 Tacoma, WA 98401
Westinghouse Building                       (206) 272-8851

                                                        17

<PAGE>



Gateway Center                              (206) 272-1334 Telefax
Pittsburgh, PA 15222
(412) 642-5899
(412) 642-3923 Telefax
(Cont'd.)
Joseph L. Reece
Davis Wright Tremaine
550 W. 7th Avenue, Suite 1450
Anchorage, AK 99501
(907) 257-5300
(907) 257-5399

For Montgomery Ward:                        For J.C. Penney:

Phillip D. Delk, Esq.                       J.C. Penney, Inc.
Vice President & Deputy                     Corporate Risk Management
General. Counsel                            2000 Oxford Drive, Second Floor
Corporate Offices                           Bethel Park, PA 15102
Montgomery Ward & Co., Inc.                 Attn: Mary Ann Snyder
535 West Chicago Ave.
Suite 3N                                    George Lyle, Esq.
Chicago, IL 60610                           Guess & Rudd
                                            510 L Street, Suite 700
George Lyle, Esq.                           Anchorage, AK 99501
Guess & Rudd                                (907) 276-5121
510 L Street, Suite 700                     (907) 279-8354 Telefax
Anchorage, AK 99501
(907) 276-5121
(907) 279-8354 Telefax

For the United States:

Bruce Noble
DRMS-SHO, Federal Center
74 North Washington
Battle Creek, MI 49017-3091
(616) 961-7412
(616) 961-5841 Telefax

Michael D. Rowe
U.S. Department of Justice
Environment & Natural Resources
  Division

                                                        18

<PAGE>



P.O. Box 23986
Washington, DC 20036-3986
(202) 514-3144
(202) 616-2426 Telefax


                                                        19

<PAGE>



                                  MISCELLANEOUS

                  47. This  Agreement  applies to and is binding upon the United
States, each Settling PRP, and each Contractor,  as defined, together with their
successors and assigns.  Changes in ownership or corporate status, including but
not limited to any transfer of assets, or real or personal  property,  shall not
alter the  responsibility  of any  Settling  PRP or  Contractor  subject to this
Agreement.
                  48. The undersigned representatives of each Party certify that
they are fully  authorized  by the Party or Parties each of them  represents  to
enter into the terms and conditions of this Agreement, and to bind those parties
to those terms and conditions.
                  49.      This Agreement, together with pertinent provisions
of the Consent Decree,  represent the entire  understanding  of the Parties
with regard to Scrap Removal.
                  50.      This Agreement shall not be modified except by
appropriate written instrument executed by each Party.
                  51.   This   Agreement   may  be   executed  in  a  number  of
counterparts,  each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
                                 EFFECTIVE DATE

                                                        20

<PAGE>



                  52.      This Agreement shall be effective between and among
the Settling PRPs and the Contractors on March 18, 1994.


                  53. This  Agreement  shall be effective  between and among the
United States,  the Settling PRPS, and the Contractors  on, and not before,  the
date of execution by the Assistant  Attorney General for Environment and Natural
Resources.  The United  States  shall  promptly  serve a notice on each Party by
tele-facsimile upon such execution.
                  54. No release,  covenant,  or warranty under this  Agreement,
whether  given or  received,  shall  apply  with  regard to any party  until the
Effective Date applicable to that Party as provided in Paragraphs 52 and 53.
                                     FOR THE
                                     UNITED STATES OF AMERICA



Date:   3-21-94                      /s/  Lois J. Schiffer
                                     LOIS J. SCHIFFER
                                     Acting Assistant Attorney
                                     General
                                     Environment and Natural
                                     Resources Division
                                     U.S. Department of Justice
                                     Washington, D.C. 20530



                                                        21

<PAGE>



                                     /s/ Michael D. Rowe
                                     MICHAEL D. ROWE, Attorney
                                     Environmental Defense Section
                                     Environment and Natural
                                     Resources Division
                                     P.O. Box 23986
                                     Washington, D.C. 20026
                                     (202) 514-3144


                                                        22

<PAGE>



                                 ROBERT C. BUNDY
                                 United States Attorney for the
                                 District of Alaska


Date: ______________              _______________________________
                                  MICKALE C. CARTER
                                  Assistant United States
                                  Attorney
                                  No. 9, Federal Building and
                                  U.S. Courthouse
                                  701 C Street
                                  Anchorage, Alaska 99513

                                                        23

<PAGE>



                                  FOR THE SETTLING DEFENDANTS:

                                  ALASKA RAILROAD CORPORATION



Date   3/22/94                    /s/  Robert D. Hatfield, Jr.
                                  ROBERT S. HATFIELD, JR.
                                  President & Chief Executive
                                     Officer

                                                        24

<PAGE>



                                 CHUGACH ELECTRIC ASSOCIATION, INC.



Date:    3/17/94                 /s/  David L. Highers
                                 DAVID L. HIGHERS
                                 General Manager
                                 Chugach Electric Association,
                                      Inc.

                                                        25

<PAGE>



                                 WESTINGHOUSE ELECTRIC CORPORATION



Date:   3-28-94                 /s/  Samuel R. Pitts
                                SAMUEL R. PITTS
                                Vice President

                                                        26

<PAGE>



                                 MONTGOMERY WARD & CO., INC.



Date:    March 27,1994           /s/  Phillip D. Delk
                                 [Name and title] vice president

                                                        27

<PAGE>



                                 J. C. PENNEY COMPANY, INC.



Date:   March 28, 1994           /s/  Carl B. Seaholm
                                 Carl B. Seaholm
                                 Manager
                                 Corporate Risk Management

                                                        28

<PAGE>



                                  BRIDGESTONE/FIRESTONE, INC.



Date:   4-25-94                   /s/  James K. Vines
                                 JAMES K. VINES
                                 GENERAL COUNSEL - ENVIRONMENTAL

                                                        29

<PAGE>



                                 WOODWARD CLYDE CONSULTANTS



Date:   March 21,1994            /s/ Phyllis A. Brunner
                                 PHYLLIS A. BRUNNER
                                 Vice President

                                                        30

<PAGE>


                                 CECON CORPORATION



Date:   3/21/94                  /s/  Charles Engstrom
                                 CHARLES ENGSTROM
                                 President

                                                        31

<PAGE>

                                   ADDENDUM 1
                           WOODWARD-CLYDE CONSULTANTS



I.       Expenses:

         A.       Woodward-Clyde invoices:

                  #1356             dtd     09/17/96        $ 31,236.43
                  #3336             dtd     10/08/93          34,609.41
                  #6730             dtd     11/12/93          19,714.58
                  #10283            dtd     12/10/93           9,398.52
                  #13555            dtd     01/05/94           9,101.38

                  Subtotal invoices                         $104,060.32

         B.       Additional work:

                  Landfill debris oversight
                  (Firm lump sum price)                     $ 14,860.00

         C.       Total expenses                            $115,920.32

II.      Receipts against expenses:                         $     00.00

III.     Amount due:                                        $118,920.32



                                   Addendum 2
                                CEcon Corporation


I.       Expenses:

         A.       Cecon invoices:

                  #1820             dtd     09/04/93         $240,981.95
                  #1828             dtd     10/01/93          149,452.03
                  #1847             dtd     10/27/93          155,799.63
                  #1848             dtd     10/27/93          106,343.83
                  #1849             dtd     10/30/93           63,680.94
                  #1850             dtd     12/02/93          107,425.37
                                                             -----------

                  Subtotal Cecon invoices                    $823,683.75

         B.       Additional work:

                  Proposal dtd 02/25/94 for
                  removal of debris pile
                  (Firm lump sum price)                      $ 90,390.00
                                                              ----------

         C.       Total Cecon expenses:                      $914,073.75

II.      Receipts against expenses:
         (dates are of cover letters)

                  11/03/93                  $10,373.90
                  11/22/93                   71,699.40
                  11/22/93                    2,104.80
                  11/22/93                    1,062.00
                  11/30/93                    1,100.00
                  12/30/93                   36,814.80
                  01/05/94                   50,887.20
                  01/05/94                    3,090.60
                  01/05/94                    1,300.00
                  01/19/94                   30,445.20
                  01/31/94                   35,354.00       $244,231.90
                                             ---------       -----------

III.     Amount due:                                         $669,841.85



<PAGE>



                                   Addendum 3
                           Alaska Railroad Corporation



I.       Expenses:

         A.       Internal labor                         $19,456.12
         B.       Landfill fees                            1,315.45
         C.       Shipment of 129 railcars
                   from Anch-Whittier                     20,382.00
         D.       Shipment of 129 railcars
                   from Whittier-Seattle                          -0-
         E.       Switch charges in Seattle
                   (129 railcars)                         25,800.00
         F.       APC tie downs                            8,000.00
         G.       Shipment of 25 APC flat-
                   cars from Anch-Whittier                 3,950.00
         H.       Shipment of 25 APC flat-
                   cars from Whittier-Seattle                     -0-
         I.       Switch charges in Seattle
                   (25 APC flatcars)                       5,000.00
         J.       Bank fees for trust account                120.00

                  Total ARRC expenses                                $84,023.57

II.      Revenues

         A.       Net proceeds of sale of
                   remaining APCs to Purdy Co.           $ 5,939.00
         B.       Remaining local scrap sales              5,625.00
                                                          ---------

                  Total revenues                                     $11,564.00

III.     Amount due                                                  $72,459.57





<PAGE>