TSCA-HQ-2004-0016, et. al. Second Quarter 2006 Progress Report July 14, 2006

Page 1 of 6 

### 2nd Quarter 2006 Progress Report

April 01, 2006 to June 30, 2006 Biodegradation Supplemental En vironmental Project (SEP)

Pursuant to Section V.l.a. of the SEP, DuPont is re quired to submit a quarterly report within thirty days after the end of each calendar-year quarter. This report which is due July 30, 2006 satisfies said requirement.

1. Description of Activities Undertaken

A. DuPont Response to EPA Request from March 27, 2006 Conference Call

On March 23, 2006, DuPont and EPA, by teleconferen ce discussed the progress DuPont made toward the purification of the Fluorotelomer-based Commercia l Products using the “Mabury Method”. On March 27, 2006, EPA provided DuPont with a request for a dditional information. On April 7, 2006 DuPont provided a response ( CD-2006-18 ) to the request from the EPA. The response included the following: 1) DuPont’s response to specific questions posed by th e EPA, 2) copies of available DuPont analytical methods used to measure target compounds and 3) requested analytical data.

B. Panel Administrator Contract Negotiation and Contract Submission

Section V.E.2 of the SEP provides that by March 15, 2006, DuPont must provide EPA with a final draft of the proposed contract that DuPont and the Pane l Administrator have nego tiated. Since the Panel Administrator was not chosen and agreed upon by th e EPA and DuPont until February 22, 2006, a first request for extension (CD-2006-15) was requested by DuPont on March 13, 2006 and granted by the

EPA. The deadline for Panel Administrator Contract submission to the EPA was extended to April 14,

2006.

On February 27, 2006, contract ne gotiations began between ISLI and DuPont and concluded successfully on April 10, 2006. The first draft of the nego tiated Panel Administrator Contract, both CBI ( CD-2006- 19) and public versions ( CD-2006-19a ) was submitted to the EPA for review on April 12, 2006. Since April 12, 2006, EPA and DuPont have met by telec onference to address questions regarding the contract

documents. The Panel Administrator Contract is currently under review by the EPA.

C. Purification Progress Report – Part 4 of 4

Pursuant of Section I.E.2.a. of the SEP, DuPont and the EPA are to come to agreement as to a method for purifying the Fluorotelomer-based Commercial Products . Since exploratory studies on the applicability of the “Mabury Method” for the purification of Fluorotelomers-based Commercial Products began on February 7, 2006, a series of reports were submitted (CD-2006-14, 16 and 17).

On March 23, 2006, EPA and DuPont had a conference call to discuss the progress with the applicability of the “Mabury Method” for the purification of the Fluorotelomers-based Commercial Products. The analytical results from the progress reports outli ned above were discussed. The EPA and DuPont discussed how, if at all, the Mabury Method could be m odified or further developed such that it could be used to produce the nine Purified Fluorotelomer Pr oducts in a timely, feasible, and efficient manner. Based upon evaluation of the results from the first three purification progress reports, on March 27, 2006, the EPA proposed additional experiments to conduct on two test substances. DuPont provided its final progress report entitled “Exploratory Studies on the Appli cability of the “Mabury Method” to Large ScaleTSCA-HQ-2004-0016, et. al. Second Quarter 2006 Progress Report July 14, 2006

Page 2 of 6 Purification of Fluorotelomer-based Products for Bi odegradation Studies – Part 4 – Data from March 22, 2006 to April 04, 2006 ( CD-2006-20 ).

Currently, DuPont and EPA are in the process of coming to agreement on the additional experiments proposed for two specific test substances identified by EPA.

D. Third Request for Extension- Purification Procedure Agreement

Section I.E.2.a. of SEP A provides that “On or befo re February 1, 2006, DuPont and EPA will agree on the procedure(s) that DuPont will use to purify the Fluorotelomer Products to produce Purified Fluorotelomer Products, taking into consideration the need to optimize various factors, including the appropriate duration of extracti on and re-dispersion processes, the desired purity of the Purified Fluorotelomer Products, the schedule for delivery of the Purified Fluorotelomer Products to the laboratories for characterization, testing, and th e overall schedule for completing this biodegradation

SEP.”

The time for the parties to reach agreement on the pur ification procedure was first extended to March 2, 2006 (CD-2006-05) and then extended a second time to April 17, 2006 (CD-2006-14). The parties are still actively evaluating parameters for modification of the Mabury Method and are also engaged in discussion concerning two additional experiments to be conducted that may provide further relevant information on the appropriate purification procedure to implement. As such, a third extension of time was necessary for the experiments to be conducte d and for the parties to reach agreement on the purification procedure. Section II.L.3. of SEP A provid es that extensions of time beyond a first extension are subject to EPA’s discretion and are granted for good cause shown.

Progress toward establishing a purification method was presented to show that good cause existed for the granting of the third extension of time. The time period for the third extension was based upon the length of time needed to conduct additional experiments. A request for a third extension was submitted to the EPA on April 12, 2006 ( CD-2006-21 ). On April 14, the EPA granted an extension for agreement on the Purification Procedure to June 30, 2006.

E. Submission of First Quarter 2006 Progress Report Describing Progress from January 01, 2005 to March 31, 2006

Section V.I.a. of the CAFO provides that “Within thir ty days after the end of each calendar-year quarter (i.e., by April 30, July 31, October 30 and Janua ry 30) after execution of this Consent Agreement pursuant to Paragraph IX.9., respondent shall subm it in writing a quarterly report for the preceding quarter that shall include a discussion of the Re spondent’s progress in satisfying its obligations in connection with each SEP including a minimum, a narrative description of activities undertaken, compliance with the schedules or milestones set forth in the applicable appendix, and a summary of costs incurred since the previous report.”

On April 26, 2006, the first quarter 2006 progress repor t covering the time period from January 01, 2006 to March 31, 2006 was submitted to the EPA ( CD-2006-22 ).

F. Requested Information from the April 19, 2006 Conference Call between EPA and DuPont

On April 19, 2006, DuPont and EPA, by teleconfer ence discussed the progress DuPont made toward the purification of the Fluorotelomer-based Commercial Pr oducts using the “Mabury Method”. On April 28, 2006 DuPont provided a response to the request from the EPA ( CD-2006-23 ). The request included the following: 1) one table including single operator preci sion data for the DuPont Polymer Solids AnalysisTSCA-HQ-2004-0016, et. al. Second Quarter 2006 Progress Report July 14, 2006

Page 3 of 6 Method and 2) one table including spike recovery information for the DuPont GC-MS and LC-MS-MS methods for the analysis of alcohol, iodide and acid, respectively.

G. Purification Path Forward Agreement

Section I.E.2.a. of SEP A provides that “On or befo re February 1, 2006, DuPont and EPA will agree on the procedure(s) that DuPont will use to purify the Fluorotelomer Products to produce Purified Fluorotelomer Products, taking into consideration the need to optimize various factors, including the appropriate duration of extracti on and re-dispersion processes, the desired purity of the Purified Fluorotelomer Products, the schedule for delivery of the Purified Fluorotelomer Products to the laboratories for characterization, testing and studies, and the overall schedule for completing this biodegradation SEP.” Since February 2006, DuPont has conducted experiments and reported the results to EPA for several screening studies targeted at evaluating whether the “Mabury Method” could be modified to produce the nine Purified Fluorotel omer Products (CD 2006-14, 16, 17 and 20). After a telephone conference call on May 3, 2006 to discuss pr ogress, EPA requested two additional experiments using the “Mabury Method”.

In an effort to outline the conditions related to th e two additional experiments, DuPont and EPA worked together to put together a path forward agreement. To formalize the agreement, DuPont submitted a path forward agreement ( CD-2006-24 ) on June 26, 2006 to request written concurrence from the Agency that EPA agrees with the experiments and test conditions set forth. DuPont is currently waiting official approval of the path forward agreement.

H. Fourth Request for Extension- Purification Procedure Agreement

Section I.E.2.a. of SEP A provides that “On or befo re February 1, 2006, DuPont and EPA will agree on the procedure(s) that DuPont will use to purify the Fluorotelomer Products to produce Purified Fluorotelomer Products, taking into consideration the need to optimize various factors, including the appropriate duration of extracti on and re-dispersion processes, the desired purity of the Purified Fluorotelomer Products, the schedule for delivery of the Purified Fluorotelomer Products to the laboratories for characterization, testing and studies, and the overall schedule for completing this biodegradation SEP.”

The time for the parties to reach agreement on the pur ification procedure was first extended to March 2, 2006 (CD-2006-05), extended a second time to April 17, 2006 (CD-2006-14), and then extended a third time on April 14, 2006 (CD-2006-21) to June 30, 2006. Pending the approval of the path forward agreement which was submitted to EPA on June 26, 2006, DuPont submitted a fourth request for extension for the purification procedure agreement. The request for extension to September 30, 2006 is currently under consideration by EPA.

I. Additional Progress

DuPont has secured the following: 1) the required qu antities of the nine Fluoro telomer-based Commercial Products, 2) the raw materials to make the nine la b-made Fluorotelomer-based Commercial products and 3) the high purity raw materials to make the lab-ma de high purity variants of the nine Fluorotelomerbased Commercial Products. DuPont has also set up a separate laboratory where the purification process is being performed.

Appendix A - Table 1 shows the progress DuPont has ma de toward the synthesis of the nine Commercial Fluorotelomer-based Products, nine Lab Synthesized Commercial Fluorotelomer-based Products and the Table 1 in Appendix A also shows the quantities of the material required and the material currently

available. All nine of the Commercial Fluorotelom er-based are ready and available for shipment. Seven of the nine Lab Synthesized Commercial Fluorotel omer-based Products and six of the nine LabTSCA-HQ-2004-0016, et. al. Second Quarter 2006 Progress Report July 14, 2006

Page 4 of 6 Synthesized Fluorotelomer-based Commercial Products made from high purity raw material are also available for shipment. The remaining five test subs tances will be synthesized and available by July 30,

2006.

2. Pending Issues and Document Reviews

A. Requests for Proposals to the EPA for Approval

Section III. B. of the SEP provides that “By February 1, 2006, DuPont shall submit to EPA on or more draft Requests for Proposals (RFPs) to be sent to all of the laboratories identified in Attachment G to solicit proposals for (1) characterizing the Fluorotelomer Products and any Corresponding Polymers, and (2) conducting the OECD Guideline 303A and SCAS studies on the Fluorotelomer Products and any Corresponding Polymers (including pilot testing).” On January 27, 2006, DuPont requested and was granted a first extension (CD-2006-05) to March 2, 2006.

The Analytical Laboratory Request for Proposal ( both CBI and Public versions, CD-2006-12, CD 2006- 12a and CD-2006 12b) was submitted to the EPA on Fe bruary 22, 2006. Similarly, the Biodegradation Laboratory Request for Proposal (both CBI and Pu blic versions, CD-2006- 11 and CD 2006-11a) was

submitted to the EPA on March 1, 2006. The Biodegradation Laboratory and Analytical Laboratory RFPs are under review by the EPA.

B. Panel Administrator Contract

Section V.E.2 of the SEP provides that by March 15, 2006, DuPont must provide EPA with a final draft of the proposed contract that DuPont and the Pane l Administrator have nego tiated. Since the Panel Administrator was not chosen and agreed upon by the EPA and DuPont until February 22, 2006, the

deadline for Panel Administrator Contract submission to the EPA was extended to April 14, 2006. The first draft of the negotiated Panel Administrator C ontract (both CBI and public versions, CD-2006-19 and CD-2006-19a) was submitted to the EPA for review on April 12, 2006. The Panel Administrator Contract is currently under review by the EPA.

C. Agreement on the Mabury Method of Purification

Pending the approval from EPA on the path forward ag reement for two additiona l sparging experiments

which was submitted to EPA on June 26, 2006, DuPont submitted a fourth request for extension for the purification procedure agreement. The request for extension for a new deadline date of September 30, 2006 is currently under consideration by EPA.



### 3. Compliance with Schedules or Milestones

This section outlines the various requests for extens ion granted between April 01, 2006 and June 30, 2006. All deadlines were met. Pending dead lines and open issues are described below.

A. Purification Procedure

Section I.E.2.a. of SEP A provides that “On or befo re February 1, 2006, DuPont and EPA will agree on the procedure(s) that DuPont will use to purify the Fluorotelomer Products to produce Purified Fluorotelomer Products, taking into consideration the need to optimize various factors, including the appropriate duration of extracti on and re-dispersion processes, the desired purity of the Purified Fluorotelomer Products, the schedule for delivery of the Purified Fluorotelomer Products to the laboratories for characterization, testing and studies, and the overall schedule for completing this biodegradation SEP.”TSCA-HQ-2004-0016, et. al. Second Quarter 2006 Progress Report July 14, 2006

Page 5 of 6 The time for the parties to reach agreement on the pur ification procedure was first extended to March 2, 2006 (CD-2006-05), extended a second time to April 17, 2006 (CD-2006-14) and extended a third time to June 30, 2006 (CD-2006-21). On June 26, 2006, Du Pont submitted a fourth request for extension and that extension request is currently under consideration by the EPA.

B. Panel Administrator Contract Submission to the EPA

Section V.E.2 of the SEP provides that by March 15, 2006, DuPont must provide EPA with a final draft of the proposed contract that DuPont and the Pane l Administrator have nego tiated. Since the Panel Administrator was not chosen and agreed upon by th e EPA and DuPont until February 22, 2006, a first request for extension (CD-2006-15) was requested by DuPont on March 13, 2006 and granted by the

EPA. The deadline for Panel Administrator Contract submission to the EPA was extended to April 14, 2006. The first draft of the negotiated Panel Admini strator Contract (both CBI and public versions, CD2006-19 and CD-2006-19a) was submitted to the EPA for review on April 12, 2006. The Panel Administrator Contract is currently under review by EPA.

C. Quarterly Progress Reports

Section V.I.a. of the CAFO provides that “Within thir ty days after the end of each calendar-year quarter (i.e., by April 30, July 31, October 30 and Janua ry 30) after execution of this Consent Agreement pursuant to Paragraph IX.9., respondent shall subm it in writing a quarterly report for the preceding quarter that shall include a discussion of the Re spondent’s progress in satisfying its obligations in connection with each SEP including a minimum, a narrative description of activities undertaken, compliance with the schedules or milestones set forth in the applicable appendix, and a summary of costs incurred since the previous report.”

On April 26, 2006, the first quarter 2006 progress repor t covering the time period from January 01, 2006 to March 31, 2006 was submitte d to the EPA (CD-2006-22).

D. Deadlines

All deadlines were met in the second quarter of 2006. The only pending deadline is for the Agreement of

the Purification Method which is cu rrently under consideration by EPA.



### 4. Summary of Costs Incurred

DuPont has established a system to capture all costs incurred for this SEP. Cost is broken down into two accounts, the “SEP Biodegradation Main” account (VZ789011724) and the “SEP Biodegradation Synthesis” account (VZ78101073). The SEP Biodegrada tion Main account is used for all eligible SEP costs while the SEP Biodegradatio n Synthesis account is used for DuPont costs resulting from preparation, purification, synthesis and characteriz ation of the test substances as supplied to the SEP.

The cost of the SEP from April 1, 2006 to June 30, 2006 as it was accounted on cost ledger is shown in Attachment B Page 1 of 4 (Cost Analysis for April 1, 2006 to June 30, 2006). The table shows the costs

from both accounts and breaks the cost distribution down into salaries, overheads, travel, operating supplies and analytical costs. The year to date (YTD) costs are $88,065 and $102,543 for the SEP Biodegradation Main and the SEP Biodegradati on Synthesis accounts, respectively.

Attachment B Page 2 and 3 of 4, shows the breakdow n of staff hours for the second quarter from April 1, 2006 to June 30, 2006. Barley Mill and Chambers Works are staff locations.TSCA-HQ-2004-0016, et. al. Second Quarter 2006 Progress Report July 14, 2006

Page 6 of 6 Attachment B Page 4 of 4 (Cost Corrections for 1Q 2006, January 1, 2006 to March 31, 2006), shows the initial costs reported in the First Quarter 2006 Progr ess Report (CD-2006-22). In this table, the reported

costs are in black and the corrected or omitted costs ar e in red. In the first quarterly progress report for 2006, the reported costs were incorrect due to confusi on from conversion of an old cost system to a new cost system (SAP) within DuPont. The cost (in re d and black) now shown in Attachment B page 4 of 4 are now the correct and actual costs for the first quarter of 2006.

5. Attachments

Title Number of Pages Attachment A. Quantity of Test Substance Required and Prepared 1

Attachment B Cost Distribution for 2Q 2006 4