Document:

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                             BARGE DOCK AGREEMENT
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     THIS AGREEMENT, made as of the 28th day of July,  2000 by and between
BORDEN CHEMICAL, INC., a Delaware corporation with an office and place of
business at 180 East Broad Street, Columbus, Ohio 43215, (hereinafter referred
to as "BCI"), and BORDEN CHEMICALS AND PLASTICS OPERATING LIMITED PARTNERSHIP, a
Delaware limited partnership with an office and place of business at Highway 73
& 30, Geismar, Louisiana 70734 (hereinafter referred to as "BCP").

     WHEREAS, BCI, on the date hereof, pursuant to a Conveyance and Transfer
Agreement between BCP and BCI dated June 27, 2000 (the "Conveyance Agreement"),
acquired from BCP, and intends to operate, barge dock facilities situated on the
left descending bank of the Mississippi River, near the Town of Geismar in
Ascension Parish, Louisiana (hereinafter referred to as "Dock Facilities"); and

     WHEREAS, the Dock Facilities are currently capable of handling the loading
and discharge of liquid cargoes from river barges; and

     WHEREAS, BCI is willing to provide BCP with dock capacity at the Dock
Facilities upon the terms and in the manner hereinafter expressed,

     NOW THEREFORE, in consideration of the payments hereinafter specified and
of the covenants hereinafter contained, it is mutually agreed as follows:

     1.  Cargoes.

     Beginning on the date BCI assumes responsibility for the operation of the
Dock Facilities in accordance with that certain Transition Services Agreement of
even date herewith between BCI and BCP ("Commencement Date"), and continuing
throughout the term hereof:

          (a)  BCI shall operate the Dock Facilities and BCP's existing ethylene
     dichloride ("EDC") pipeline, which is six (6) inches in diameter, for the
     unloading of EDC; and

          (b)  unless BCI exercises its Option (as defined in the Conveyance
     Agreement), BCI shall operate the Dock Facilities and the existing methanol
     pipelines for the loading of methanol until BCP advises BCI that it is
     permanently ceasing operation of the Optioned Assets (as defined in the
     Conveyance Agreement) for the production of methanol or until BCP has
     ceased the operation of the Optioned Assets for the production of methanol
     for twelve (12) consecutive months, whichever occurs first.

     Beginning on the Commencement Date, BCP shall also be entitled to have BCI
operate the Dock Facilities and the existing ammonia pipelines for the loading
of ammonia until the earlier of (i) ninety (90) days after the shutdown of BCP's
ammonia plant or (ii) December 31, 2000.

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     EDC, methanol and ammonia, loaded or unloaded  for BCP in accordance with
this Agreement, are hereinafter referred to as "Cargoes."  No Cargoes other than
EDC (and, during the respective periods indicated above, methanol and ammonia)
shall be handled under this Agreement without BCI's prior written approval.  The
maximum number of barges carrying EDC Cargoes that will be accepted at the Dock
Facility per month will be ten (10).

     No unloading shall occur unless BCP has supplied hazard information to BCI,
as provided in Section 10 below.

     2.   EDC Equipment.

     BCP shall install, at its expense, any and all valves, pipes, hoses and
pumps that may be required to handle its EDC (the "EDC Equipment").  Title to
all of said EDC Equipment shall remain in BCP, and BCP shall have the right to
remove said property at the termination of this Agreement or, at its option, may
abandon said property and leave same on the premises unless, within thirty (30)
days after the termination of this Agreement, BCI requests removal of same. If
BCP does not promptly remove same upon request, BCI may remove and dispose of it
at BCP's expense.

          All EDC Equipment installed by BCP shall be engineered to comply with
all applicable federal, state, and local environmental statutes, regulations and
ordinances, including, but not limited to, the Clean Air Act, as amended. In
addition, BCP shall have a continuing obligation to comply with any future
environmental requirements.  BCP shall annually inspect its pipeline and other
property located on BCI's property and submit an annual report to BCI attesting
to its integrity.

     3.   Scheduling; Efficient Operations.

     BCI shall make reasonable efforts to operate the Dock Facilities to achieve
maximum capacity and efficiency.  BCP shall exert reasonable efforts to furnish
BCI advance shipping schedules for the purpose of enabling BCI to make efficient
use of the Dock Facilities.  Both parties will cooperate and provide aid to the
other to ensure effective loading and unloading of Cargoes.  To this end, the
parties agree as follows:

         (a)  BCI and BCP shall develop and jointly maintain a rolling two month
     forecast of anticipated barge traffic at the Dock Facility.  Both parties
     will have the ability to access this forecast.  BCI will input scheduling
     information provided by BCP and will update the forecast and scheduling
     information at least once a week.  This forecast is intended to serve as a
     tool for efficient Barge Dock operations and not as formal notification of
     barge arrivals.

         (b)  BCI agrees that up to four (4) shipments of EDC per month will be
     given priority as follows:

              (i)  if BCP gives BCI not less than 48 hours advance notice of the
         anticipated arrival time of a nominated barge, BCI guarantees that BCI
         will make the Dock Facilities available to allow the shipment to dock
         at the Dock Facility at any time

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         within two (2) hours before or after the anticipated arrival time
         specified in the notice; and

              (ii)  if BCP's EDC shipment arrives outside the two (2) hour
         window in subparagraph (i), BCI agrees to use reasonable efforts
         (which, subject to Subsection (d), shall not include the
         discontinuation of any loading or unloading of cargoes or the
         incurrence of demurrage or other costs or expenses) to allow the EDC
         shipment to dock at the Dock Facility and unload as soon as possible
         after its arrival.

         BCP agrees that barges carrying EDC Cargoes other than "off-spec" or
     "wet" Cargoes will unload at a minimum rate of 150 tons per hour.

         (c)  BCP agrees to give BCI reasonable advance notice of all Cargoes
     (in addition to the 48-hour notice referred to above), and BCI agrees to
     use its reasonable efforts to load or unload such Cargoes in an efficient
     and timely manner.  Subject to Subsection (d) below, such Cargoes and
     cargoes unloaded for BCI's own account or for third parties will generally
     be loaded on a first come, first served basis.  "Off-spec" or "wet" EDC
     shall not be granted priority pursuant to Subsection (b) and while it shall
     be scheduled according to normal first-come, first-served scheduling, if
     the unloading of any such barge shall not be completed within six (6)
     hours, such unloading may be discontinued to accommodate other scheduled
     barge traffic.  BCI shall be entitled to schedule barge traffic following
     such six-hour time frame and such EDC unloading shall be resumed as dock
     availability permits.  Any costs or expenses resulting from such
     interruption shall be borne by BCP.

         (d)  If either BCI or BCP declares a commercial emergency and requests
     a barge be granted priority access to the Dock Facility, the other party
     will grant the party declaring the emergency prompt access to the Dock
     Facility and, if necessary, will discontinue loading or unloading its
     cargoes; provided however, that the party declaring the emergency will
     reimburse the other party for any and all costs and expenses incurred by it
     that are directly and proximately attributable to the granting of such
     priority.

         (e)  If both BCI and BCP declare commercial emergencies simultaneously,
     they will use good faith efforts to resolve the emergencies, with the
     relative costs thereof to be borne by each in an equitable manner.

         (f)  If BCI grants any third party rights to use the Dock Facilities
     for other than the handling of methanol for BCI's plants, BCI covenants and
     agrees that its contracts with such third parties will guarantee BCP the
     priority provided in (b) above for 4 shipments per month and equal
     entitlements to that enjoyed hereunder for BCP's remaining six (6) barges
     per month in scheduling use of the Dock Facilities.

         (g)  Due to limitations on loading and unloading facilities, demurrage
     and other charges on scheduled barges may occur.  Except for the situations
     described in Subsections (b) and (d) above, demurrage or other charges
     (including, without limitation, repositioning and towing and placement
     charges) shall be borne by the party for whose account such barge

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     was scheduled. In the event the loading or unloading of a docked barge
     (including a barge granted priority pursuant to Subsection (b)) is delayed
     or interrupted as a result of defective or noncompliant Cargoes, failed
     cargo inspections or similar matters, the party for whose account such
     barge was docked shall be responsible for all demurrage charges and other
     costs and expenses incurred by either party resulting from such delay or
     interruption.

     4.   BCI's Obligations.

     BCI shall furnish and be responsible for the operation of the Dock
Facilities and the following costs pertaining thereto:

         (a)  all labor and supervision on a 24-hour-per-day, 7-day-per-week
     schedule;

         (b)  utility requirements for power, water, and lights;

         (c)  other utilities, within reason and if readily available;

         (d)  fire protection water supply; and

         (e)  all maintenance of Dock Facilities and pipelines and loading and
     unloading facilities located thereon, whether owned by BCI or BCP, in good
     condition and repair; provided, however, that:

              (i)  BCI shall not be obligated to add any capital improvements to
         the Dock Facilities except such as are reasonably required to enable
         BCI to fulfill its obligations under this Agreement; and

              (ii)  BCI's obligation to maintain BCP-owned loading and unloading
         equipment or facilities shall be limited to normal day-to-day
         mechanical maintenance; unusual, large scope maintenance projects on
         BCP equipment or facilities, such as complete or partial replacement of
         hoses and valves or cyclical repainting, shall be done by BCI at BCP's
         expense, subject to the prior agreement of BCP as to the basis and
         amount of the charges therefor.

     BCI shall conduct operations hereunder in accordance with good industry
practices.

     BCI shall not be required to furnish tugs for the placement of Cargoes.

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     5.  Dual Unloading.

     BCI and BCP agree to work together, and use their respective reasonable
best efforts, to secure all necessary permissions from the U. S. Coast Guard to
load and/or unload two (2) barges simultaneously at the Dock Facility.  If BCI
is permitted to load and/or unload two (2) barges simultaneously at the Dock
Facility, BCP and BCI will negotiate in good faith regarding the terms,
conditions and costs on which the maximum number of barges carrying EDC Cargoes
that will be accepted at the Dock Facility per month may be increased to up to
twenty (20).  BCI shall decide in its sole discretion, however, whether to
accept such higher maximum.

     6.  Insurance.

     BCI shall provide insurance coverage for the Dock Facilities and all
related facilities and appurtenances owned by it, whether located on its
property or on BCP's property.  BCP shall provide insurance coverage for the EDC
Equipment and related facilities owned by it, whether located on its property or
BCI's property.

     BCI shall provide such insurance coverage for cargoes handled at the Dock
Facilities (other than Cargoes) as is reasonable and customary.  BCP shall
provide such insurance coverage for Cargoes as is reasonable and customary.

     Each party hereto shall have and maintain Worker's Compensation insurance
in compliance with the laws of the State of Louisiana, and Employer's Liability
insurance with a minimum limit of $500,000.

     Each party shall provide the other party with satisfactory evidence of
General Liability insurance coverage with a combined bodily injury and property
damage single limit of no less than $5,000,000.00.  Each party hereto agrees to
release and waive, and hereby releases and waives, all rights of subrogation
against the other possessed by its insurers to the extent permitted under its
policies of insurance.

     BCI or BCP may self insure, at its election, any of its obligations under
this Section 6.

     7.  Liability and Indemnification.  Except as set forth in Section 9:

         (a)  BCI will be responsible for, and will indemnify and hold BCP
     harmless from and against, the entirety of any and all losses, expenses
     (including reasonable attorney's, accountant's and expert's fees and
     expenses), damages, indictments, fines, penalties, actions and other
     liabilities (collectively, "Losses") arising out of:

              (i)  damage to the Dock Facilities (except to the extent caused by
         the gross negligence of BCP, its employees or agents, with respect to
         which BCP shall indemnify and hold BCI harmless);

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              (ii)  injury to or death of any BCI employee (except any injury or
         death arising from or caused by the gross negligence of BCP, its
         employees or agents, with respect to which BCP shall indemnify and hold
         BCI harmless); and

              (iii)  damage to property of third parties or for injury to or
         death of third persons arising out of operations hereunder, including
         but not limited to those arising under federal, state or local
         environmental laws, rules or regulations, to the extent caused by the
         negligence of BCI, its employees or agents.

         (b)  BCP will be responsible for, and will indemnify and hold BCI
     harmless from and against, the entirety of any Losses arising out of:

              (i)  damage to the EDC Equipment, pipelines and related facilities
         owned by BCP (except to the extent caused by the gross negligence of
         BCI, its employees or agents, with respect to which BCI shall indemnify
         and hold BCP harmless);

              (ii)  injury to or death of any BCP employee (except any injury or
         death arising from or caused by the gross negligence of BCI its
         employees or agents, with respect to which BCI shall indemnify and hold
         BCP harmless); and

              (iii)  damage to property of third parties or for injury to or
         death of third persons arising out of operations hereunder, including
         but not limited to those arising under federal, state or local
         environmental laws, rules or regulations, to the extent caused by the
         negligence of BCP, its employees or agents.

     8.  Taxes.

     BCI shall be responsible for payment of all payroll taxes or contributions
payable under the Federal Insurance Contributions Act, the Federal Unemployment
Tax Act, and under applicable State Unemployment Insurance or Compensation Laws
and any amendments to these laws, measured by wages paid by BCI to its employees
and to the employees of any contractor of BCI with respect to employment of said
employees in the operation of the Dock Facilities and the services to be
performed hereunder.

     BCI shall pay taxes on its cargoes and on the Barge Facilities and related
facilities and appurtenances owned by it, whether located on its property or on
BCP's property.  BCP shall pay all taxes on its Cargoes and on the EDC Equipment
and related facilities owned by it, whether located on its property or on BCI's
property.

     Any sales, use or excise tax imposed on the services provided hereunder by
federal, state or local government authorities will be itemized on BCI's
invoices and paid by BCP to BCI.

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     9.  Liability for Loss of Cargoes.

     BCI shall provide properly trained personnel to work on the Dock Facilities
in accordance with U.S. Coast Guard regulations; provided, however, BCI assumes
no liability for loss of Cargoes or for contamination thereof and BCP agrees to
hold BCI harmless for such loss or contamination regardless of cause.

     In the event that Cargoes are lost during handling due to pipeline,
equipment, hose, vessel or any other failure, and such Cargoes spill onto the
Mississippi River levee or battery or into the waters of the Mississippi River,
then:

         (a)  BCP shall indemnify and hold BCI harmless from any and all
     Losses, including, but not limited to, those arising out of damage to
     property of third parties or for injury or death of third parties and those
     arising under federal, state or local environmental laws, rules or
     regulations, except to the extent caused by the gross negligence of BCI,
     its employees or agents; and

         (b)  BCI shall indemnify and hold BCP harmless from any and all
     Losses, including, but not limited, to those arising out of damage to
     property of third parties or for injury or death of third parties and those
     arising under federal, state or local environmental laws, rules or
     regulations, to the extent caused by the gross negligence of BCI, its
     employees or agents.

     In the event that cargoes handled at the Dock Facilities (other than
Cargoes) are lost, and such shipments spill onto the Mississippi River levee or
battery or into the waters of the Mississippi River, BCI shall indemnify and
hold BCP harmless from any and all Losses resulting therefrom, except to the
extent caused by the gross negligence of BCP, its employees or agents, with
respect to which BCP shall indemnify and hold BCI harmless.

     All reportable spills and emissions will be reported by BCP to the
appropriate state and federal agencies as required. BCP shall be obligated to
comply with all Superfund Amendments and Reauthorization Act (SARA), Title III,
toxic release reporting requirements.

     Should any rules or regulations effect a change in loading procedures for
EDC Cargoes or require permits from any governmental agency, BCP shall be
responsible for all additional costs incurred and/or for obtaining such permits,
provided, however, if BCP decides it does not want to incur such costs or obtain
such permits, BCP may forthwith terminate this Agreement insofar as the affected
Cargoes are concerned, provided further, that BCP promptly notifies BCI of BCP's
decision and reimburses BCI for the cost of removing any affected pipelines or
related facilities from BCI's property. BCP shall provide BCI with copies of all
permits.

     10. Hazard Information.

     BCP shall provide BCI with all Materials Safety Data Sheets prescribed by
OSHA and relating to the safe and efficient handling of Cargoes by BCI.

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     11. Fees.

     BCP shall pay BCI an annual fee of $50,000 for the use of the Dock
Facilities plus an additional fee (the "Throughput Fee") of $1.50 per ton of
Cargo (loaded or unloaded) for BCP at the Dock Facility.  The Throughput Fee
shall be adjusted as of  October 1, 2001 and annually thereafter, by an amount
equal to the percentage increase, if any, in the hourly rate of pay for a barge
dock operating technician (whether employed by BCI or a third party having a pay
scale escalating reasonably within industry norms), compared to the rate of pay
for the same classification of BCI or such third party, as the case may be, as
of October 1, 2000, or the last annual adjustment date, as the case may be.

     The annual fee shall be payable in advance beginning on the date hereof and
thereafter on each anniversary of such date.

     BCI shall invoice BCP monthly for the Throughput Fee for Cargoes handled
during the previous month.  Each invoice shall be payable in full within thirty
(30) days of the invoice date.  BCP shall furnish evidence to BCI of the tonnage
of the Cargoes handled.  For billing purposes, any movement of Cargoes shall be
deemed to have been completed as of the same date it was commenced.

     12. Audit.

     BCP shall have the right, not more than once each year, to have all books
and records pertaining to any fees or charges assessed by BCI hereunder audited
by an independent accounting firm selected and paid for by BCP.  Such accounting
firm will maintain the confidentiality of books and records being audited and
shall either verify the correctness of the fees and charges assessed hereunder,
or advise the parties of the composite adjustments required to correct any
discrepancies for the period being audited.

          BCP shall have the right at any time, upon reasonable prior notice, to
audit the Barge Dock operation in order to assess whether operations are being
conducted in accordance with the terms in this Agreement.  In the event BCP
identifies any inadequacies in operation, it shall promptly notify BCI.  BCI
shall, within thirty (30) days of receipt of any such notice, cure any
operational inadequacy identified by BCP or notify BCP that it believes its
operations are in compliance with the terms of this Agreement.

     13. Term.

     The term of this Agreement shall commence as of the date hereof and
continue for an initial term of ten (10) years.  Notwithstanding the foregoing,
BCP shall be entitled to terminate this Agreement at any time during the initial
term upon not less than three hundred sixty (360) days advance written notice to
BCI should it find that it has no further need for use of the Dock Facilities.

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     Following the initial term, this Agreement shall be automatically extended
on a year to year basis, unless and until either:

         (a)  BCI gives BCP not less than twenty-four (24) months advance
     written notice of termination (which notice may be given at any time
     commencing with the 24th month prior to the end of the initial term); or

         (b)  BCP gives BCI not less than  three hundred sixty (360) days
     advance written notice of termination.

     In the event this Agreement is terminated by BCI, or by BCP after a refusal
by BCI to increase the maximum number of barges carrying EDC Cargoes pursuant to
Section 5 hereof, and in the further event that it is necessary for BCP to
obtain easements or rights of way across BCI's property in order to procure EDC,
then BCI agrees that it will grant such easements or rights of way to BCP along
mutually agreed, reasonably convenient routes.

     14. Force Majeure.

     No party hereto shall be deemed in default with respect to any of the
terms, covenants and conditions of this Agreement which are to be performed, to
the extent that the party's failure to timely perform the same is caused
directly or indirectly by any strike, lockout, labor trouble, civil disorder,
injunction, restrictive governmental laws or regulations, riots, insurrections,
fire, sabotage, explosion, war, acts of God, inability to obtain raw materials
or electric power, equipment outage or loss of equipment beyond the reasonable
control of the non-performing party or any other cause beyond the reasonable
control of the non-performing party.  Such party shall promptly notify the other
party of the occurrence of such event and shall use its reasonable best efforts
to remedy such event as soon as practicable; provided that the settlement of any
strike, lockout or labor trouble shall be within the sole discretion of the
affected party.  If any force majeure event affects only part of BCI's capacity
to provide services hereunder, then BCI shall allocate the available capacity of
the Dock Facilities between its own requirements and its contractual commitments
hereunder in a fair and equitable manner.  If  either party is prevented from
performing for any of the foregoing reasons, it shall cooperate with the other
party's efforts to obtain an alternate source of service, including granting all
reasonable and necessary easements or servitudes.

     15. Condemnation.

     In the event all or substantially all of the Dock Facilities are taken for
public or quasi-public use by any power or authority having the right to take
the same by condemnation, eminent domain, or otherwise, this Agreement shall
terminate as of the date title shall vest in the taking body and the parties
hereto shall be released of and from all obligations and liabilities to each
other accruing hereunder.

     In the event a portion of the Dock Facilities is taken for public or quasi-
public use by any power or authority having the right to take the same by
condemnation, eminent domain, or

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otherwise, BCI shall allocate the available capacity of the Dock Facilities
between its own requirements and its contractual commitments hereunder in a fair
and equitable manner.

     In the event of such taking, the parties hereto shall each be entitled to
claim and have paid to them for their respective use and benefit a proportional
part, as their interests may appear, of the amount awarded as compensation for
the Dock Facilities so taken.

     16. Notices.

     All notices required or permitted to be given hereunder shall be deemed
given if either delivered personally to BCI or BCP or if deposited in the United
States mail, in a sealed envelope with first class postage thereon prepaid,
addressed to BCI or to BCP at their respective addresses given hereinabove or to
such other address as the parties may direct by notice given as hereinabove
provided.

     17. Assignment; Subcontracting.

     BCP may assign all, or any portion, of its rights or obligations hereunder
to a purchaser of the Optioned Assets or of the EDC Equipment.  Neither this
Agreement nor any rights or obligations of BCP hereunder may be assigned to any
person, other than a purchaser of the Optioned Assets or of the EDC Equipment,
without the prior written consent of BCI, such consent not to be unreasonably
withheld, and any such attempted assignment without such consent shall be void.
The term "BCP" shall include any successor or permitted assign of BCP and, in
the event of a partial assignment, may include both BCP and such successor or
assign.

     Neither this Agreement nor any rights or obligations of BCI hereunder may
be assigned to any person without the prior written consent of BCP, such consent
not to be unreasonably withheld, and any such attempted assignment without such
consent shall be void provided that BCI shall have the right to assign its
rights and obligations to any purchaser of BCI's Formaldehyde plant in Geismer,
Louisiana.

     All the conditions, limitations, and agreements herein contained, and all
the obligations herein assumed, shall inure to the benefit of and be binding
upon the successors and assigns of the respective parties hereto.

     BCI shall have the right to engage an independent contractor for the
operation of the Dock Facilities and/or the performance of any or all of BCI's
duties hereunder with the prior written consent of BCP, which consent shall not
unreasonably be withheld.  In such event, BCI shall remain subject to BCP for
the satisfactory performance of its obligations hereunder.  It is understood and
agreed that BCP may withhold its consent unless such contractor agrees to
indemnify and hold BCP harmless from any and all Losses resulting from the
negligence of such contractor.  For purposes of this Agreement, the negligence
of any such contractor shall not be attributed to BCI.

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     18. Entire Agreement.

     This Agreement constitutes the entire understanding between the parties
with respect to the operation and use of the Dock Facilities and supersedes all
previous understandings, agreements, communications and representations, whether
written or oral, concerning the subject matter to which this Agreement relates.

     19. Governing Law.

     This Agreement shall be governed by and construed in accordance with the
laws of the State of Louisiana without giving effect to the choice of laws
principles thereof, and may not be superseded, amended or modified except by
written agreement between the parties.

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

                                 BORDEN CHEMICALS & PLASTICS
                                 OPERATING LIMITED PARTNERSHIP
BORDEN CHEMICAL, INC.            By: BCP Management, Inc., General Partner

By:______________________        By:___________________________

Title:___________________        Title:________________________

                                       11<PAGE>

                       ENVIRONMENTAL INDEMNITY AGREEMENT
                       ---------------------------------

          This ENVIRONMENTAL INDEMNITY AGREEMENT (this "Agreement") dated as of
the 28th day of July, 2000 is made by and between Borden Chemicals and Plastics
Operating Limited Partnership, a Delaware limited partnership ("Seller"), and
Borden Chemical, Inc., a Delaware corporation ("Purchaser").

                                  WITNESSETH:
                                  ----------

          WHEREAS, pursuant to a Conveyance and Transfer Agreement dated as of
June 27, 2000 (the "Conveyance Agreement"), by and between Seller and Purchaser,
Seller has agreed to sell to Purchaser and Purchaser has agreed to purchase from
Seller the Purchased Assets and Seller has granted Purchaser an Option to
purchase the Optioned Assets (capitalized terms used herein and not otherwise
defined herein are being used as defined in the Conveyance Agreement);

          WHEREAS, the Purchased Assets include the Real Property;

          WHEREAS, Seller and Purchaser desire to set forth the terms and
conditions upon which certain environmental liabilities of the Real Property
will be handled on and after the date hereof;

          NOW, THEREFORE, in consideration of the premises and of the mutual
promises contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

          1.   Seller Indemnity. Subject to Section 3 below, Seller shall
               ----------------
indemnify and save and hold harmless Purchaser and its Affiliates, successors
and assigns against all claims, costs, damages, expenses and liabilities
incurred by such indemnified persons to the extent relating to or arising out of
the following (less a deductible to be borne by Purchaser of $125,000 in any
given calendar year, provided that the cumulative amount borne by Purchaser
pursuant to this Section 1 shall not exceed $500,000):

          (a)  any treatment, recycling, storage or disposal of any Materials of
     Environmental Concern after November 30, 1987, and prior to the date of
     this Agreement (the "Operating Period"), at the Real Property or any
     Purchased Asset or Optioned Asset (collectively, the "Assets");

          (b)  any Release during the Operating Period at the Real Property or
     from an Asset during the Operating Period of any substance which
     constituted Materials of Environmental Concern (the term "Release" as used
     herein means any spilling, leaking, pumping, pouring, emitting, emptying,
     discharging, injecting, escaping, leaching, dumping or disposing into the
     environment, including without limitation the workplace);

          (c)  any claim by a third-party based upon any exposure or alleged
     exposure of any person or property to any Materials of Environmental
     Concern Released at the Real
<PAGE>

     Property or from an Asset during the Operating Period (excluding claims
     arising after the date hereof under Workman's Compensation and Occupational
     Disease statutes); and

          (d)  any violation or alleged violation during the Operating Period of
     applicable Environmental Laws relating to the use, operation or ownership
     of an Asset.

          It is acknowledged by the parties that this Environmental Indemnity
Agreement is intended to be Purchaser's sole remedy with respect to the subject
matters covered in this Section 1 but is not intended to address matters not
specifically addressed in this Section.  Without limiting the foregoing, this
Environmental Indemnity Agreement is not intended to address claims, costs,
damages, expenses and liabilities incurred as a result of treatment, recycling,
storage or disposal or Releases of Materials of Environmental Concern that are
not present at and do not emanate from, or violations of Seller not involving,
the Real Property or the Assets, all of which matters are Excluded Liabilities
indemnifiable pursuant to Section  9 of the Conveyance Agreement.

          2.   Purchaser Indemnity.  Subject to Section 3 below, Purchaser shall
               -------------------
indemnify and save and hold harmless Seller and its Affiliates, successors and
assigns against all claims, costs, damages, expenses and liabilities incurred by
such indemnified persons to the extent relating to or arising out of:

          (a)  any treatment, recycling, storage or disposal by or at the Real
     Property or any other facility owned or operated by Purchaser, including
     any facility leased by Purchaser on or after the date hereof, of any
     Materials of Environmental Concern shipped by Purchaser, or its employees,
     agents or contractors (other than the Seller Entities or any of their
     respective employees) ("Representatives"), from the Real Property or from
     an Asset on or after the date hereof;

          (b)  any Release by Purchaser or its Representatives at the Real
     Property or from an Asset on or after the date hereof of any substance
     which is a Material of Environmental Concern;

          (c)  any exposure or alleged exposure of any person or property to any
     Materials of Environmental Concern Released by Purchaser or its
     Representatives at the Real Property or from an Asset on or after the date
     hereof; and

          (d)  any violation or alleged violation by Purchaser or its
     Representatives on or after the date hereof of applicable Environmental
     Laws relating to the use, operation or ownership of the Real Property or an
     Asset.

To the extent the foregoing provisions of this Section 2 conflict with any
provision of any Ancillary Agreement, the provisions of such Ancillary Agreement
shall control.

          3.   Claim Deadline. Any claim made by Purchaser or Seller pursuant to
               --------------
this Agreement must be asserted no later than the fifth anniversary of the
Closing Date.

                                       2
<PAGE>

          4.   Joint Liabilities. Notwithstanding the provisions of Sections 1
               ------------------
and 2 above, if a matter arises that is partly Seller's responsibility under
Section 1 and partly Purchaser's responsibility under Section 2, Seller and
Purchaser shall apportion liability on an equitable basis considering all the
facts and circumstances, including but not limited to the relative contribution
of each party to the matter and the amount of time each has operated the Asset
in question (to the extent relevant). If, after considering all the facts and
circumstances with respect to whether a Release of a Material of Environmental
Concern has contaminated the soil or groundwater of the Real Property before or
after the date hereof or before or after November 30, 1987, there remains a
scientific dispute which cannot be resolved with reasonable certainty, liability
shall be allocated based on the number of years of ownership of the affected
Real Property by Seller on the one hand, and by Purchaser or Borden, Inc., on
the other hand, through the date of the claim with respect thereto.

          5.   Procedure and Implementation. For the purposes of this Agreement,
               ----------------------------
an "Indemnified Party" is a party who is entitled to indemnity pursuant to the
provisions of this Agreement, and an "Indemnifying Party" is a party who has an
obligation of indemnity pursuant to the provisions of this Agreement. An
Indemnified Party shall give an Indemnifying Party prompt written notice of any
claim that has given or could reasonably be expected to give rise to a right of
indemnification under this Agreement, including any inquiry or any investigation
by a government agency which the Indemnified Party believes may involve or
expects will lead to such a claim; and shall provide reasonable access to the
Assets as may be necessary or appropriate to enable the Indemnifying Party, its
employees, agents, attorneys, consultants and/or contractors to investigate,
assess and otherwise evaluate the claim, prepare its position, and take remedial
or other appropriate action. The Indemnifying Party shall have the
responsibility of contesting, defending, litigating, settling or satisfying any
claim made against the Indemnified Party and shall have the right to employ its
own counsel in connection therewith. The Indemnifying Party shall have full
control over any actions (including, without limitation, any remedial action,
negotiation or litigation) in connection with any such claim; provided, that the
Indemnifying Party must consult with the Indemnified Party at reasonable times
regarding its proposed actions, and if such action could materially and
adversely affect the Indemnified Party's operations at the Assets, the latter's
prior consent thereto shall be necessary (which consent shall not unreasonably
be withheld); and provided further, the Indemnifying Party shall not settle any
claim, but if the Indemnified Party shall refuse to consent to any settlement
recommended by the Indemnifying Party and shall elect to contest the claim, then
the Indemnifying Party's liability for the claim shall not exceed the amount for
which the claim could have been so settled plus expenses incurred by the
Indemnified Party up to the date of such refusal. The Indemnified Party shall
also have the right to be represented by separate counsel at the Indemnified
Party's expense in connection with any such claim. The Indemnified Party shall
make available to the Indemnifying Party or its representatives all relevant
information, records and other materials in the possession of the Indemnified
Party which are reasonably required by the Indemnifying Party for its use in
connection with any such claim and shall otherwise cooperate with and assist the
Indemnifying Party in connection with any such claim. Each party shall maintain
all information, records, and other materials prepared for a claim under this
Agreement in a strictly confidential manner, except as required to comply with
an order of a court or a governmental authority, or to enforce its rights under
this Agreement. Where possible, such information shall be placed under
confidential seal before it is placed in public records. In

                                       3
<PAGE>

the event the Indemnifying Party fails to proceed diligently and in good faith
with respect to such claim, the Indemnified Party may take such course of action
as it deems appropriate without prejudice to its rights to indemnity.

          6.   Certain Limitations. The indemnification obligations of the
               -------------------
parties under this Agreement are subject to the following limitations:

          (a)  to the extent an Indemnified Party is entitled to receive the
     proceeds of insurance with respect to the matter for which it is to be
     indemnified, upon being so indemnified said party shall pay the proceeds
     net of all expenses of such insurance which it has received to the
     Indemnifying Party;

          (b)  if and to the extent any indemnification obligation of an
     Indemnifying Party hereunder is or has been increased as a result of acts
     or omissions taken or omitted by or on behalf of an Indemnified Party, such
     indemnification obligation shall be reduced by the amount of such
     indemnification obligation that is attributable to such acts or omissions;

          (c)  effective upon being indemnified as provided in this Agreement,
     an Indemnified Party hereunder (i) hereby transfers and assigns to the
     Indemnifying Party all rights and claims the former has or may have against
     third parties for reimbursement or contribution for such indemnification;
     (ii) agrees to execute such instruments and take such other actions as may
     be necessary or appropriate to transfer and assign the foregoing rights or
     claims to the latter; and (iii) agrees to take such reasonable actions when
     and as necessary or appropriate to assist the latter to obtain
     reimbursement or contribution for such indemnification from third parties;
     and

          (d)  no party shall be entitled to indemnification on account of the
     effect upon its business or business operations caused by or resulting from
     actions taken by a party pursuant to its obligations hereunder to take
     remedial or other appropriate action, such as for example business
     interruption or lost profits, provided that any consents required by
     Section 6 above have been obtained before commencing such action.

          7.   Address and Notices. The address of Purchaser for all purpose of
               -------------------
this Agreement is 180 East Broad Street, Columbus, Ohio 43215, Attention:
Lawrence Dieker. The address of Seller for such purposes is Highways 73 and 30,
Geismar, Louisiana 70734, Attention: M. D. Owens. Any notice, demand, request or
report given or made under this Agreement shall be in writing and shall be
deemed given or made when delivered in person or when sent to the appropriate
party at such address by first class mail or by other means of written
communication.

          8.   Titles and Captions. All article or section titles or captions in
               -------------------
this Agreement are for convenience only and shall not be deemed part of this
Agreement or in any way define, limit, extend or describe the scope or intent of
any provisions hereof.

                                       4
<PAGE>

          9.   Binding Effect. This Agreement shall be binding upon and inure to
               --------------
the benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns, provided that this
Agreement is assignable by Purchaser only in connection with the sale of
substantially all the Assets and by Seller only in connection with the sale of
all or substantially all of its assets, in each case only with the prior consent
of the other party, which consent shall not be unreasonably withheld.

          10.  Integration. This Agreement and the Ancillary Agreements referred
               -----------
to herein constitute the entire agreement among the parties hereto pertaining to
the subjects specifically described herein, and supersede all other agreements
and understandings pertaining thereto.

          11.  Creditors. None of the provisions of this Agreement shall be for
               ---------
the benefit of, or shall be enforceable by, any creditor of Purchaser or Seller.

          12.  Waiver.  No failure by any party hereto to insist upon the strict
               ------
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right, or remedy consequent upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement or
condition of this Agreement.

          13.  Counterparts. This Agreement may be executed in counterparts, all
               ------------
of which together constitute one agreement binding on all the parties hereto.

          14.  APPLICABLE LAW. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT
               --------------
MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES HERETO EXPRESSLY AGREE
THAT ALL OF THE TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED UNDER AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF OHIO WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW.

          15.  Invalidity of Provisions. If any provision of this Agreement is
               ------------------------
or becomes invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not be affected thereby.

                                 *  *  *  *  *

                                       5
<PAGE>

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

                                    BORDEN CHEMICALS AND PLASTICS
                                     OPERATING LIMITED PARTNERSHIP

                                    By:  BCP Management, Inc., as General
                                         Partner

                                    By:  _____________________________
                                    Its:  _____________________________

                                    BORDEN CHEMICAL, INC.

                                    By:  _____________________________
                                    Its:  _____________________________

                                       6

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