Document:

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                               Executive Income
                            Split Dollar Agreement

         AGREEMENT, made and entered into this First day of March, 1990, by
and between Philipp Brothers Chemicals, Inc., a corporation duly organized and
existing under the laws of the State of New Jersey, and having its usual place
of business at 1 Parker Plaza, Fort Lee, NJ (hereinafter sometimes called the
"Corporation"), and ____ ________, currently residing at _________________,
_________, __, (hereinafter called "Executive"),

         WITNESSETH THAT:

         WHEREAS, the Executive is presently employed by the Corporation in
the position of _________, in which capacity his services have contributed to
the successful operation of the Corporation, and the Corporation and its
Directors believe it is in the best interest of the Corporation to retain the
services of the Executive; and

         WHEREAS, the Corporation is desirous of assisting the Executive in
paying for a pre--retirement life insurance benefit; and

         WHEREAS, the Corporation has determined that this insurance can best
be provided under a "split dollar" arrangement and the Corporation has applied
for Insurance Policy No. 32000924 (the "policy") issued by Guardian Life
Insurance Company of America (the "Insurer") in the face amount of $1,000,000
on the Executive's life; and

         WHEREAS, the Corporation and the Executive agree to make said
insurance policy subject to this split dollar agreement.

         NOW, THEREFORE, in consideration of the premises, and the services to
be rendered to the Corporation by the Executive, and for other good and
valuable consideration, receipt of which is hereby acknowledged, the
Corporation and the Executive hereby mutually covenant and agree as follows:

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                                   ARTICLE I
                   Policy Ownership and Dividend Application

         1.01 The policy has been issued to the Corporation as the owner
thereof. The Corporation will have and may exercise all ownership rights in
the policy, including, without limitation, the following:

                  (a)  The Corporation will have the right to designate the
beneficiary, as provided in Article III hereof.

                  (b)  The Corporation will have the right to borrow from the
Insurer and to secure that loan by the policy for any purpose including, but
not limited to, borrowing for the purpose of paying premiums without giving
notice to the Executive.

         1.02 Except as provided in paragraph 1.01 above, the Corporation
agrees with the Executive that so long as this agreement is in force, it will
not exercise any rights under the policy which will compromise or reduce the
death benefit payable to the beneficiary.

         1.03 Dividends payable under the policy, if any, will be applied as
the Corporation shall determine.

         1.04 As between the Executive and the Corporation, this agreement
shall take precedence over any provisions of the policy (including any riders,
amendments and attachments thereto) in case of a conflict between the terms of
the policy and this agreement.

                                  ARTICLE II
                              Payment of Premiums

         2.01 As long as this agreement is in force, the Executive and the
Corporation agree to share in the payment of premiums on said policy of
insurance in such amounts and in the manner set forth below:

                  The Executive's share of the annual premium shall be that
portion of the annual premium due on the policy that is equal to the amount of
the economic benefit that would be taxable to the Executive but for the
payment by the Executive of such amount based upon an amount of insurance
protection equal to the Executive's death benefit specified in Article I.

         2.02 The amount of economic benefit that would be taxable to the
Executive shall be computed in accordance with the Insurer's current published
rate per $1,000 of insurance protection for Individual 1--year term life
insurance available to all standard risks as provided in Revenue Ruling
66--110, 1966--1 C.B.12.

         2.03 In order to facilitate the payment of premiums on the policy, it
is agreed that the Corporation in the first policy year, and in each year
thereafter and as long as this agreement is in force, shall forward the total
amount of the premium then currently due and payable on the policy directly to
the Insurer and, immediately thereafter, it shall indicate in the appropriate
Corporate records that the annual sum payable by the Executive as provided for
above in Section 2.01, shall be added to his annual salary or compensation.

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                                  ARTICLE III
                            Beneficiary Provisions

         3.01 If the Executive dies while this agreement is in force, the
policy death benefit shall be paid, in a lump sum, as follows:

                    (a) The first $1,000,000 of death benefit proceeds shall
be paid to the wife of the Executive, if she shall survive the Executive, or
if she shall then be deceased, then to the Executive's lawful issue then
surviving, in equal shares, per stirpes.

                    (b) If the death benefit proceeds shall exceed $1,000,000,
then the first $1,000,000 shall be paid as provided in "(a)" above and any
excess shall be paid, as follows:

                           (i)  There shall be paid to Philipp Brothers
Chemicals, Inc. an amount equal to the aggregate premiums which it shall have
paid on the policy from the inception thereof up to the date of the Executive's
death; and

                           (ii) The entire remaining balance of death benefit
proceeds shall be paid as provided in "(a)" above.

         3.02 If the Executive shall die while this agreement is in force, the
Corporation agrees to take such action as may be necessary to obtain payment
from the insurer of the amounts payable to the beneficiaries as herein
provided.

                                  ARTICLE IV
                           Termination of Agreement

         4.01 This agreement shall automatically terminate upon the happening
of any of the following events:

                    (a) The Executive's termination of employment voluntarily,
or his discharge for any reason prior to death. The Executive's total
disability shall not be considered a termination of employment.

                    (b) Express termination of this agreement by either the
Corporation or the Executive at any time upon 30 days written notice to the
other.

                    (c) On the day prior to the date of the Executive's
retirement, which retirement date shall be the day prior to the first day of
the month in which the insured has his sixty-fifth (65th) birthday, unless
with the consent of the Directors of the Corporation, the Executive remains in
the active and full-time employment after the above stated retirement date.
The retirement date as used in this Agreement shall refer to the actual
retirement date of the Executive. The retirement date shall be specified on a
Policy Contract Change Form provided by the Insurer.

                    (d) Death of the Executive subject, however, to the
provisions of Article III.

                    (e) Lapse or termination of the policy.

                                   ARTICLE V
                                Reorganization

         5.01 The Corporation agrees that it will not merge or consolidate
with another corporation or organization, or permit its business activities to
be taken over by any other organization unless and until the

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succeeding or continuing corporation or other organization shall expressly
assume the rights and obligations of the Corporation herein set forth.

                                  ARTICLE VI
                                Governing Laws

         6.01 This Agreement shall be governed by and construed in accordance
with the laws of New Jersey, where it is made and to be performed. It sets
forth the entire agreement between the parties concerning the subject matter
thereof, and any amendment shall be made only in writing. This Agreement shall
bind and benefit the parties and their legal representatives and successors.

                                  ARTICLE VII
                         Not a Contract of Employment

         7.01 This Agreement shall not be deemed to constitute a contract of
employment between the parties, nor shall any provision restrict the right of
the Corporation to discharge the Executive.

                                 ARTICLE VIII
            Employee Retirement Income Security Act of 1974 (ERISA)

         8.01 For the purposes of ERISA, the Corporation shall be the "Named
Fiduciary" and "Plan Administrator" of the split dollar life insurance plan
for which this Agreement is hereby designated the written plan instrument.

         8.02 The Corporation's Board of Directors may authorize a person or
group of persons to fulfill the responsibilities of the Corporation as Plan
Administrator. The Named Fiduciary or the Plan Administrator may employ others
to render advice with regard to its responsibilities under the plan. The Named
Fiduciary may also allocate fiduciary responsibilities to others and may
exercise any other powers necessary for the discharge of its duties to the
extent not in conflict with ERISA.

                                  ARTICLE IX
                               Claims Procedure

         9.01 The following Claims Procedures shall control the determination
of benefit payments under this Plan:

                    (a) Any insured, beneficiary or other individual
("claimant") entitled to benefits under the plan or under the policy shall
file a claim request with the Plan Administrator with respect to benefits
under the Plan and with the Insurer with respect to benefits under the policy.
The Plan Administrator shall, upon written request of a claimant, make
available copies of any claim forms or instructions provided by the Insurer or
advise the Claimant where copies of such forms or instructions may be
obtained.

                    (b) Denial of Claim. A Claim for Benefits under the Plan
shall be denied if the Corporation determines that the claimant is not
entitled to receive benefits under the Plan. Notice of a denial shall be
furnished to the Claimant within a reasonable period of time after receipt of
the Claim for Benefits by the Plan Administrator. In the case of benefits
which are provided under the policy, the initial decision on the claims shall
be made by the Insurer.

                    (c) Content of Notice. The Plan Administrator shall
provide within ninety (90) days to every Claimant who is denied a Claim for
Benefits written notice setting forth, in a manner calculated to be understood
by the Claimant, the following:

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                           1.  The specific reason or reasons for the denial;

                           2.  specific reference to pertinent Plan
provisions on which the denial is based;

                           3.  A description of any additional material or
information necessary for the Claimant to perfect the claim, and an
explanation of why such material or information is necessary; and

                    4. An explanation of the Plan's Claim Review Procedure as
set forth below.

                    (d) Review Procedure. The purpose of the Review Procedure
is to provide a method by which a Claimant may have a reasonable opportunity
to appeal a denial of a Claim to the Named Fiduciary for a full and fair
review. To accomplish that purpose, the Claimant or his duly authorized
representative:

                           1.  May require a review upon written application
to the Named Fiduciary;

                           2.  May review pertinent Plan documents; and

                           3.  May submit issues and comments in writing. A
Claimant (or his duly authorized representative) shall request a review by
filing a written application for review with the Named Fiduciary at any
time within sixty (60) days after receipt by the Claimant of written notice of
the denial of his claim.

                    (e) Decision on Review. A decision on review of a denied
claim shall be made in the following manner:

                           1.  The decision on review shall be made by the
Named Fiduciary, who may in his discretion hold a hearing on the denied claim.
Such decision shall be made promptly, and not later than sixty (60) days after
receipt of the request for review, unless special circumstances (such as the
need to hold a hearing) require an extension of time for processing, in which
case a decision shall be rendered as soon as possible, but not later than one
hundred and twenty (120) days after receipt of the request for review.

                           2.  The decision on review shall be in writing and
shall include specific reasons for the decision, written in a manner
calculated to be understood by the Claimant, and specific references to the
pertinent Plan provisions upon which the decision is based.

                                   ARTICLE X
                                   Amendment

          10.01 No beneficiary under the policy shall obtain any vested right
to have this Agreement continued in force and it may be amended or modified in
whole or in part by the Executive and the Corporation in writing at any time
without the consent of said beneficiary.

          IN WITNESS WHEREOF, the parties hereto have set their hands and
seals this First day of March, 1990.

-----------------

Philipp Brothers Chemicals, Inc.
By:
     ------------------<PAGE>

                               State of New Jersey
                     DEPARTMENT OF ENVIRONMENTAL PROTECTION
                     DIVISION OF HAZARDOUS WASTE MANAGEMENT

                            LANCE R. MILLER, DIRECTOR
                                     CN O28
                            Trenton. N.J. 08625-0028
                                 (609) 633-1408
                              Fax # (609) 633-1454

IN THE MATTER OF                          :                 ADMINISTRATIVE
C. P. CHEMICALS INCORPORATED              :                     CONSENT
Respondent                                :                      ORDER

This Administrative Consent Order ("ACO") is issued to C.P. Chemicals pursuant
to the authority and the statutory and regulatory enforcement responsibilities
vested in the Commissioner of the New Jersey Department of Environmental
Protection (hereinafter "NJDEP" or the "Department") by N.J.S.A. 13:1D-1 et
seq., the Water Pollution Control Act, N.J.S.A. 58:10A-1 et seq., the Solid
Waste Management Act N.J.S.A. 13:1.E-1 et seq., and the Spill Compensation and
Control Act, N.JS.A. 58:10-23.11 et seq. (hereinafter the "Spill Act"), and duly
delegated to the Assistant Director of the Responsible Party Cleanup Element of
the Division of Hazardous Waste Management, and the Assistant Director of the
Enforcement Element of the Division of Water Resources, pursuant to N.J.S.A.
13:1B-4.

                                    FINDINGS

                                   I. The Site

1.       C.P. Chemicals Incorporated (hereinafter "CP. Chemicals") operates a
         specialty chemical manufacturing facility and a separate hazardous
         waste treatment, storage and disposal (TSD) facility (EPA ID#
         NJD002141950) located on Arbor Street in Sewaren, Woodbridge Township,
         Middlesex County, New Jersey. The facilities are located on a tract of
         land consisting of fourteen acres and occupy property listed as Block
         729 Lot 3, Block 729A Lot 1, Block 730 Lot 1, Block 730 Lot 1B and
         Block 731 Lot 1B on the tax map of Woodbridge Township (hereinafter
         "the Site"). The property is bounded by industrial areas to the north,
         south and east and by Woodbridge Creek to the west.

2.       a.   The property has been utilized by C.P. Chemicals since 1964. Prior
              to that time, the, site was used by other

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              companies for heavy industrial operations since approximately
              1860. C.P. Chemicals purchased the Site in 1964 from the Vulcan
              Detinning Company. Prior to the sale of the facility, the Vulcan
              Detinning Company was established at the site since 1907. Maps
              detailing the manufacturing facility date back to the 1920's and
              some of the original buildings are currently in use by C.P.
              Chemicals. It is believed that the Vulcan Detinning Company was
              the first major manufacturing company at the Site.

         2.   C.P. Chemicals has been engaged since 1964 in the manufacture at
              the Site of various metal cyanides, sulfates, carbonates and
              salts. The types of metals involved in the manufacturing process
              include, but are not limited to, copper, zinc, cobalt, nickel, and
              manganese. C.P. Chemicals obtains metals for its manufacturing
              processes through the use of relatively pure chemical compounds
              and relatively impure chemical wastes from various sources.

         3.   The impure chemical wastes are metal-containing liquids, sludges
              and filter cakes which C.P. Chemicals receives from other
              manufacturers and from its own manufacturing processes. Chemical
              wastes are stored in various storage tanks, particularly in the
              southern and western sections of the Site. C.P. Chemicals subjects
              the wastes to chemical processes to extract the metals and/or to
              increase the concentration of the metals to a useful level. The
              chemical wastes which remain after the extraction or concentration
              process, and/or the impure chemical wastes which are not suitable
              for extraction or concentration were treated and disposed of on
              site, by C.P. Chemicals, through the use of two
              infiltration/percolation lagoons. In 1977, a waste water treatment
              plant was constructed; however, C.P. Chemicals continued to use
              the two infiltration/percolation lagoons for waste disposal until
              approximately 1981. The liquid effluent from the waste water
              treatment plant is discharged to Woodbridge Creek via a permitted
              discharge pipe designated Discharge Serial Number (DSN) 002 in the
              NJPDES permit No. NJ0003867. Originally, noncontact cooling water
              was discharged through a permitted discharge pipe designated
              DSN001. Said discharge was voluntarily discontinued in 1987 after
              the installation of a cooling tower. The sludges which result from
              the

<PAGE>

              treatment plant process are disposed of at off-site facilities.

         4.   C.P. Chemicals utilizes various processes to extract and
              concentrate the metals in the impure chemical wastes. The basic
              process involves reacting virgin metals and metal bearing waste
              with an acid solution followed by precipitation to remove
              impurities. This is followed by a crystallization process,
              recovery, drying and packaging. The waste water which is left over
              from this process is subject to further processing in order to
              further extract and concentrate the dilute metals still remaining.

         5.   The impure chemical wastes, remnant chemical wastes and unsuitable
              chemical wastes are hazardous wastes within the meaning of the
              Solid Waste Management Act, N.J.S.A. 13:1E-1 et seq. Accordingly,
              C.P. Chemicals stores and treats hazardous wastes at the Site.

         6.   The chemical products, raw materials, impure chemical wastes,
              remnant chemical wastes, and unsuitable chemical wastes are all
              pollutants within the meaning of the Water Pollution Control Act,
              N.J.S.A. 58:10A-l et seq., and such materials have been discharged
              to the land, ground waters and surface waters of the State.

         7.   The chemical products, raw materials, impure chemical wastes,
              remnant chemical wastes and unsuitable chemical wastes discharged
              by C. P. Chemicals at the Site contain hazardous substances within
              the meaning of the Spill Act, N.J.S.A. 58:10- 23.11a et seq. The
              discharge of the hazardous substances to the land, ground water,
              or surface water is prohibited by the Spill Act.

         8.   Soil, ground water and surface water pollution exists at the Site
              due to the discharge of hazardous wastes, hazardous substances and
              pollutants by C.P. Chemicals during the handling, transfer,
              storage, processing and disposal of raw materials, chemical
              products, impure chemical wastes, remnant chemical wastes and
              unsuitable chemical wastes.

         9.   An analysis of ground water sampling results shows that

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              various metals have been detected in the ground water collected at
              the Site from the outset of sample collection. Various organic
              chemicals have also been detected in the ground water. The
              Department alleges that although some of these organic chemicals
              have also been detected in the upgradient wells on the Shell Oil
              property, the concentrations were not as high as those observed on
              the C.P. Chemicals property.

                                II. Site history

3.       Based upon the Department's review of its files and inspections
         conducted at the Site, the Department has determined that the following
         environmental statutes have been violated, by C.P. Chemicals, at the
         Site:

              The Water Pollution Control Act, N.J.S.A. 58:10A-l et seq.; the
              Solid Waste Management Act N.J.S.A. 13:1E-l et seq.; and the Spill
              Compensation and Control Act, N.J.S.A. 58:10-23.11 et seq.

4.       The Department initiated numerous enforcement actions relating to such
         violations, including, but not limited to: Administrative Order, dated
         February 21, 1980; Administrative Consent Order, dated February 9,
         1981; June 7, 1982 Court Order; Administrative Order, dated May 4,
         1983; Administrative Consent Order, dated on or about May 19, 1983;
         Notice of Violation/Penalty Assessment/Penalty Settlement Offer, dated
         August 9, 1983; Amended Administrative Consent Order, dated August 13,
         1983; Notice of Violation/Penalty Settlement Offer, dated October 24,
         1983; Administrative Consent Order, dated on or about September 19,
         1986; Amended Notice of Civil Administrative Penalty Assessment, dated
         September 22, 1986; Administrative Order and Notice of Civil
         Administrative Penalty Assessment, dated October 16, 1986; Notice of
         Civil Administrative Penalty Assessment, dated April 3, 1987; Notice of
         Civil Administrative Penalty Assessment, dated June 3,1987;
         Administrative Order and Notice of Civil Administrative Penalty
         Assessment, dated June 30, 1987; Administrative Order and Notice of
         Civil Administrative Penalty Assessment, dated May 24,1988;
         Administrative Order and Notice of Civil Administrative Penalty
         Assessment, dated November 30, 1988; Notice of Civil Administrative
         Penalty Assessment, dated February 22, 1990;

                                       4

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         Administrative Order and Notice of Civil Administrative Penalty
         Assessment, dated April 1, 1990; Administrative Order and Notice of
         Civil Administrative Penalty Assessment, dated April 10, 1989; July 28,
         1989 Final Notice; Directive and Notice to Insurer, dated October 16,
         1990 (Attachment VIII); the Department's Summons Nos. 05816, 05817,
         05818, dated August 13, 1990; Woodbridge Municipal Court Docket Nos.
         H2495, H2496, H2497; Municipal Summons dated December 18, 1959. In
         response to these documents C.P. Chemicals submitted various hearing
         requests, stay requests and other correspondence. In response to those
         items that the Department recognizes as being in violation of various
         state regulations, C.P. Chemicals alleges that it has done extensive
         work in the areas of ground water cleanup, storm water runoff and an
         upgrade to the on-site treatment plant. The above documents are herein
         incorporated by reference.

5.       The Department issued a New Jersey Pollutant Discharge Elimination
         System ("NJPDES") discharge to surface water Permit No. NJ0003867
         (hereinafter the "Permit") which is attached herein and made a part
         hereof as Attachment I, to C.P. Chemicals on June 11, 1984. In December
         1987, a public hearing was held regarding a draft NJPDES/DSW Permit
         that was publicly noticed by the Department. At that hearing, testimony
         was heard and written comments received from various sources, including
         C.P. Chemicals, NJPIRG and members of the public. On April 10, 1989,
         the Department issued a Notice of Intent to Terminate and Not Renew the
         NJPDES/DSW Permit. An additional public comment period was held and on
         July 28, 1989, a Final Notice was issued. Both the Notice of Intent and
         the Final Notice are incorporated herein by reference. Pursuant to the
         New Jersey Water Pollution Control Act, N.J.S.A. 58:10A-1 et seq., no
         person shall discharge any pollutant except in conformity with a valid
         NJPDES permit.

6.       C.P. Chemicals has submitted Discharge Monitoring Reports (DMRs) to the
         Department as required by Part IV, Sections A. 1, 2, and 3 of the
         Permit for the monitoring period through January 31, 1991. The
         Department alleges that these DMRs demonstrate that C.P. Chemicals
         violated the effluent limitations of the Permit during such period.
         Listed in Attachment II, which is incorporated herein by reference, are
         certain of the effluent limitations which the Department finds were
         allegedly violated by C.P. Chemicals during the specified monitoring
         period (January 1, 1989 - September 30, 1990) for outfall DSN002.
         Although no AONOCAPA has yet been issued, the Department has determined
         that a penalty for these violations should be assessed against C.P.
         Chemicals in the amount of $3,742,500.00, pursuant to the provisions of
         N.J.S.A. 58:10A-10d and N.J.A.C. 7:14-8.1 et seq. The Department
         finds that there are additional violations of the Permit during the
         period from January 1, 1989 through January 31, 1991, that have not
         been the subject of a formal enforcement action and are not listed in
         Attachment II, and this ACO resolves the penalties for such violations.

                                        5
<PAGE>

7.       In December 1989, March 1990, and November 1990 the Department
         conducted a review of C.P. Chemicals' hazardous waste activities. Based
         on a review of C.P. Chemicals' original Part A, subsequent revisions to
         the Part A, site inspections, manifests listed in Attachment IV hereto
         (which is incorporated herein by reference) and the following
         manifests, #NJA0570301, #NJA0570302, #NJA0765111, the Department
         alleges that C.P. Chemicals has violated the Solid Waste Management
         Act, N.J.S.A. 13:1E-l et seq. ("SWMA"), and the hazardous waste
         regulations promulgated pursuant thereto, N.J.A.C. 7:26-I et seq. C.P.
         Chemicals, without admitting said allegations, represents that
         to the best of its knowledge no additional major violations or
         substantial numbers of violations of SWMA and the hazardous waste
         regulations occurred up to the effective date of this ACO.

         Pursuant to N.J.S.A. 13:1E-9e and N.J.A.C. 7:26-5.4 and 5.5 and based
         upon this FINDING the Department has determined, although a NOCAPA has
         not yet been issued, that another civil administrative penalty should
         be assessed against C.P. Chemicals in the amount of $1,407,750.00, and
         this ACO resolves the penalty for such alleged violations.

8.       In addition to the above, the Department has determined from
         inspections at the Site that C.P. Chemicals has had periodic leaks from
         its hazardous waste equipment. The Department has determined that it is
         necessary for C.P. Chemicals to submit a plan to correct and prevent
         these equipment leaks.

9.       In August 1988, C.P. Chemicals submitted to the Department a Part B
         permit application pursuant to the provisions of the Solid Waste
         Management Act and the Resource Conservation and Recovery Act, 42
         U.S.C. 6901 et seq. (hereinafter "RCRA"). By -- --- correspondence
         dated 6/30/89, the Department notified C.P. Chemicals that the permit
         application was deficient. By correspondence dated 9/1/89 and 10/31/89,
         C.P. Chemicals responded to the Notice of Deficiency. In March 1990,
         C.P. Chemicals modified the application for the Part B permit. By a
         Technical Notice of Deficiency, dated December 14, 1990, the Department
         notified C.P. Chemicals that its Part B permit application was still
         deficient. This Notice of Deficiency is attached hereto as Attachment V
         and is incorporated herein by reference. Responses to that Notice of
         Deficiency were submitted on January 30, 1991, and on February 12, 1991
         and are incorporated herein. The Department has not yet completed its
         review of these responses. The Department has provided C.P. Chemicals
         with a letter status report, dated February 22, 1991, regarding the
         issuance of the draft Part B permit decision. This ACO and the alleged
         violations referenced in the FINDINGS shall not constitute the grounds
         for disapproval of the Part B permit.

                                       6
<PAGE>

10.      On December 20, 1990 and January 3, 1991, the Department and C.P.
         Chemicals met to discuss, among other things, the hazardous waste
         activities which C.P. Chemicals was authorized to conduct by virtue of
         the various Part A applications and modifications it has submitted. By
         letter dated January 4, 1991, the Department set forth the hazardous
         waste activities which C.P. Chemicals is authorized to conduct. A copy
         of this letter is attached hereto as Attachment VI, and is incorporated
         herein by reference. Clarification of this letter has been requested by
         C.P. Chemicals. That request and any response by the Department are
         incorporated by reference.

11.      a.   The C.P. Chemicals facility is regulated pursuant to the New
              Jersey Solid Waste Management Act N.J.S.A. 13:lE-1 et seq.,
              specifically the Hazardous Waste --- Regulations, N.J.A.C. 7:26-l
              et seq. The C.P. Chemicals facility is also regulated -- ---
              pursuant to RCRA, and the Hazardous and Solid Waste Amendments of
              1984 (hereinafter "HSWA") and is subject to the corrective action
              requirements contained in Section 3004(a) and 3008 (h) of HSWA.
              The State of New Jersey currently has similar corrective action
              authorities and therefore acts as the U.S. Environmental
              Protection Agency's contractor (through the FY 89 Subtitle C RCRA
              Grant Agreement) to oversee corrective action activities at the
              C.P. Chemicals facility. In this capacity, all documents submitted
              pursuant to this ACO may be reviewed by the USEPA to determine
              compliance with RCRA guidance documents for RCRA Facility
              Investigation, Corrective Measures Study, and Corrective Measures
              Implementation to comply with HSWA requirements. Such comments
              will be transmitted to the C.P. Chemicals facility by the
              Department as the lead agency for these activities.

         b.   C.P. Chemicals has received Part A interim authorization and has
              applied for a final Part B permit pursuant to said laws, and is
              therefore subject to the corrective action requirements noted
              above.

12.      In order to more fully determine the nature and extent of the problem
         presented by the discharge of hazardous substances and pollutants at
         and emanating from the Site and to develop environmentally sound
         remedial actions, the Department has determined that it is necessary to
         conduct a remedial investigation and feasibility study of remedial
         action alternatives (hereinafter "RI/FS") for the Site. The Department
         has further determined that to correct the problems presented by the
         discharges, it may be necessary to design and implement a remedial
         action alternative to remedy all pollution at the Site, emanating from
         the Site, or which has emanated from the Site.

13.      At the present time, C.P. Chemicals alleges that there are a

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<PAGE>

         total of 20 ground water monitoring wells located on the Site (1-5,
         7-21). Installation of these wells began in 1981 and were completed
         over the next several years. A ground water recovery system was
         installed in 1983 in order to pump ground water to the on-site waste
         water treatment plant and then to Woodbridge Creek through the DSN002
         outfall line. This system included the installation of a French drain
         trench for the collection of ground water which extends throughout the
         southwest portion of the Site and pumps ground water to the treatment
         plant. A slurry wall was also installed in 1983 by C.P. Chemicals. This
         slurry wall extends along the same horizontal line as the French drain
         collection system.

14.      At the present time, C.P. Chemicals alleges that roof runoff from the
         main manufacturing building is collected in a 36,000 gallon holding
         tank, and that this water is sent to the on-site waste water treatment
         plant prior to discharge. Additionally, sump pump pits are allegedly
         located in low areas near buildings 15, 32, 44 and 54 as well as near
         the railroad tracks and the waste water treatment plant. C.P. Chemicals
         alleges that water collected in these sumps is sent to the treatment
         plant for processing prior to discharge. A NJPDES application for a
         proposed storm water management plan was submitted to the Department in
         April 1989. The Department reviewed the application and determined not
         to act on the application at that time.

15.      A berm has also been constructed at the southwest portion of the site
         adjacent to Woodbridge Creek. This was designed to contain contaminated
         rain water runoff that flows towards this low area. However, during
         periods of successive days of intense rain, C.P. Chemicals has breached
         the berm on at least two occasions in order to prevent water from
         backing up into buildings in the area, allowing this rain water to
         enter Woodbridge Creek. The berm is also breached occasionally by storm
         water when there is natural erosion due to storm water. Pursuant to
         this ACO, a new interim storm water management plan will be submitted.

16.      At the present time, it is C.P. Chemicals' position that: all sampling
         required by the Middlesex County Utilities Authority ("MCUA") as found
         in the "Application for Non- Domestic Waste Water Discharge Permit" has
         been completed; this sampling of treated production waste water and
         treated ground water was performed by a Department certified laboratory
         for those parameters found on Tables 1 and 2 of the permit;
         additionally, a full priority pollutant + 40 analysis was performed on
         the composited samples; the sampling methods, analysis and QA/QC
         requirements were agreed upon by the MCUA prior to the sample
         collection; and the permit application has been completed and is
         awaiting submission to the MCUA.

17.      The permit for construction of the original waste water treatment plant
         was issued by the Department on 7/22/77. The

                                       8

<PAGE>

         plant went into operation later that year. In December 1987, a
         construction and discharge permit was sent to the Department for an
         $880,000 upgrade of the plant. This upgrade work was completed in early
         1989 and the plant went on-line shortly after completion. The treatment
         plant processing of the waste waters removes metals by neutralization
         with caustic soda in order to precipitate metal hydroxides, this is
         followed by a gravity settler, which is a Lamella slanted plate unit. A
         coagulated polymer is added to the settler feed to increase
         precipitation. The water then goes through a gravity settler and sand
         filter to lower the solids content and remove solids. The pH is then
         adjusted through the addition of sulfuric acid and the water then
         enters a carbon filter and is then discharged through the DSN002 line
         to Woodbridge Creek. The separate cyanide destruct system handles waste
         from the cyanide salts manufacturing line. Waste water treated in the
         cyanide destruction system is routed to the waste water treatment
         plant. At the present time, C.P. Chemicals alleges that all waste water
         streams from the manufacturing units, ground water pumped from the
         French drain collection systems, as well as rein runoff from both the
         sump pumps and the roof collection system is also treated at the plant.

18.      C.P. Chemicals Inc., by its agreement to this ACO, does not make any
         admission as to any fact, liability or fault as to any and/or all of
         the FINDINGS. Notwithstanding that there are no admissions made in this
         ACO, C.P. Chemicals does agree to enter into this ACO and comply with
         the terms of the ORDER listed in the remaining paragraphs of this ACO.
         No FINDING shall be admissible in any civil, administrative or other
         court proceeding as proof of the information it purports to find as a
         fact. The ACO can be admitted in an action for enforcement of this ACO
         or in any proceeding between the parties to establish the fact that the
         ACO was entered into.

19.      Based on all of the above and to resolve this matter without the
         necessity for litigation, C.P.. Chemicals has agreed to undertake the
         activities set forth in the ORDER section of this ACO, including, but
         not limited to:

         a.   Cease the effluent discharge to the Woodbridge Creek, except in
              compliance with a storm water management plan and effective NJPDES
              permit approved by the Department and to discharge production
              waste water and treated ground water directly to the MCUA in
              accordance with the schedule provided in this ACO;

         b.   Conduct interim remedial measures, to conduct an RI/FS and to
              design and implement a remedial action alternative based upon the
              results of the RI/FS, to remedy all pollution at the Site,
              emanating from the Site, or which

                                       9
<PAGE>

              has emanated from the Site;

         c.   Hire a Compliance Officer ("CO");

         d.   Submit a treatability analysis;

         e.   Design, prepare and implement its interim or final storm water
              discharge management plan, as the case may be, in the event of a
              waste water treatment plant "cease operations" order from the
              Department.

                                      ORDER

NOW THEREFORE IT IS HEREBY ORDERED AND AGREED THAT:

              I. Penalty and Reimbursement of Damages

A. Penalty

20.      C.P. Chemicals shall pay a penalty of $ 2,200,000.00 to the Department,
         by cashier's or certified checks payable to the "Treasurer, State of
         New Jersey", submitted with a white copy of form DEP-062A (copy
         attached) for the violations referenced in the FINDINGS hereinabove in
         paragraphs 3, 4, 6, 7, and 8. This penalty, with interest calculated at
         8.57% per annum, shall be payable in ten (10) yearly installments as
         set forth in Attachment IX. The initial payment shall be due on May 15,
         1991, and each annual installment shall be due on March 15 of each
         successive year. $2,000,000.00 of this penalty shall constitute
         settlement for the violations of the Water Pollution Control Act
         referenced in this ACO. $200,000.00 of this penalty shall constitute
         settlement of all other violations referenced in this ACO.

B.  Reimbursement of Prior Costs and Damages

21.      Within sixty (60) calendar days after receipt from the Department of a
         written summary of all costs incurred by the Department to date, in
         connection with the investigation of, and response to, the matters
         described in the FINDINGS hereinabove, including the costs associated
         with the preparation of this ACO, C.P. Chemicals shall submit to the
         Department a cashier's or certified check payable to the "Treasurer,
         State of New Jersey" for the Department' s

                                      10
<PAGE>

         oversight costs. Payment shall be submitted to the Department's contact
         listed in paragraph 60 below. The Department agrees that with respect
         to this initial billing for costs, that initial costs are currently
         estimated at $40,279.74 through December 15, 1990 and will not exceed
         $75,000.00 in such initial billing. Any additional costs that the
         Department incurs prior to entry of this ACO, will be billed
         subsequently pursuant to paragraph 68.

                              II. Immediate Actions

A.  Interim Remedial Measures

22.      C.P. Chemicals shall continue implementation of those Interim Remedial
         Measures (hereinafter "IRM") undertaken pursuant to the 1981
         Administrative Consent Order, specifically: development and
         implementation of a plan for lagoon sediment removal; elimination of
         surface runoff and discharges to ground water; installation of eight
         (8) monitoring wells and borings as well as excavation of eight (8)
         test pits to determine the extent of soil and ground water
         contamination; submission of sample results from the monitoring wells
         and test pits to the Department; development and implementation of a
         ground water decontamination plan; and a determination of the direction
         of ground water flow. The Department acknowledges that the development
         and implementation of a plan for the removal of sediments in both the
         large unlined and small unlined lagoons; installation of eight (8)
         monitoring wells as well as eight (8) test pits to determine the extent
         of soil and ground water contamination; and development and
         implementation of a ground water decontamination plan have been
         completed and that the remaining remedial measures, namely the
         elimination of surface runoff and discharges to the ground water;
         submission of sample results from the monitoring wells and test pits to
         the Department; and determination of the direction of ground water flow
         have been undertaken and will be re-evaluated by C.P. Chemicals in the
         RI/FS, except as required by paragraph 23. C.P. Chemicals will continue
         to maintain its surface water control systems and ground water
         decontamination system in conjunction with paragraph 23.

23.      Within the time limits specified below, C.P. Chemicals shall implement
         additional interim remedial measures, including but not limited to the
         implementation of the following measures:

         a.   Immediately secure any spilled or damaged drums/containers that
              have discharged or threaten to discharge hazardous substances.

         b.   Manage drums in accordance with solid and hazardous waste
              regulations.

                                       11

<PAGE>

         c.   Within thirty (30) calendar days after the effective date of this
              ACO, C.P. Chemicals shalt submit all ground water quality
              monitoring data which it or its consultants possess. C.P.
              Chemicals shall submit additional data, within sixty (60) calendar
              days after the effective date of this ACO, including, but not
              limited to, water level elevations, ground water contour maps,
              sampling methodologies, and laboratory certification.

         d.   Within thirty (30) calendar days after the effective date of this
              ACO, C.P. Chemicals shall submit an engineering plan for revising
              the current pumping system for the interceptor drain system from
              the current manual operation to an automatic system so as to
              minimize the risk of overflow at the trench and/or sumps. Within
              ten (10) calendar days after the receipt of the Department's
              comments, C.P. Chemicals shall submit to the Department an
              engineering plan which conforms to the Department's comments. The
              determination as to whether or not the modified engineering plan,
              as resubmitted, conforms to the Department's comments and is
              otherwise acceptable by the Department shall be made solely by the
              Department in writing. The system is to be installed and
              operational within fifteen (15) calendar days of C.P. Chemicals'
              receipt of the approval of plans by the Department.

         e.   Within sixty (60) calendar days after the effective date of this
              ACO C.P. Chemicals shall submit to the Department a copy of those
              documents in its files regarding the construction, integrity and
              effectiveness of the ground water decontamination system. Within
              thirty (30) calendar days after the receipt of the Department's
              comments regarding such documents and decontamination system, C.P.
              Chemicals shall respond to such comments. The determination as to
              whether or not the response conforms to such comments and is
              otherwise acceptable by the Department shall be made solely by the
              Department in writing.

B.  Interim Hazardous Waste Activities

24.      C.P. Chemicals shall fully comply with the requirements of the December
         14, 1990 Technical Notice of Deficiency (Attachment V). C.P. Chemicals
         believes it has fully complied with this NOD at this time.

                                       12

<PAGE>

25.      C.P. Chemicals shall immediately cease all hazardous waste activities
         not authorized in, and shall fully comply with the terms of, the
         January 4, 1991 "Authorized Hazardous Waste Activities" letter from the
         Department (Attachment VI) and any modification thereto.

26.      Within fifteen (15) calendar days of the effective date of this ACO,
         C.P. Chemicals shall submit to the Department a plan for inspection and
         schedule for maintenance ("Plan"), of all equipment used in conjunction
         with C.P. Chemicals' hazardous waste activities at the Site, for all
         areas where such Plan will not require Department approval pursuant to
         the Part B permit process. Construction activities relating to
         treatment, storage and disposal activities shall be considered part of
         the Part B process and shall not be included in the Plan. C.P.
         Chemicals shall modify this Plan to conform to the Department's
         comments and shall submit the modified Plan to the Department. The
         determination as to whether or not the modified Plan, as resubmitted,
         conforms to the Department's comments and is otherwise acceptable to
         the Department shall be made solely by the Department in writing.

C.  Interim Storm Water Management

27.      On or before April 15, 1991, C.P. Chemicals shall submit an interim
         storm water management plan. Said plan shall consider the current Site
         conditions and shall remain in effect until such time as a long term
         storm water management plan is approved and implemented. The plan shall
         address measures that will eliminate the breaking of the berm at the
         Site and the associated discharge of storm water to the Woodbridge
         Creek. Within thirty (30) calendar days after the receipt of the
         Department's comments, C.P. Chemicals shall modify the interim storm
         water management plan to conform to the Department's comments and shall
         submit the modified interim storm water management plan to the
         Department. The determination as to whether or not the modified interim
         storm water management plan, as resubmitted, conforms to the
         Department's comments and is otherwise acceptable to the Department
         shall be made solely by the Department in writing. Upon receipt of the
         Department's written approval, C.P. Chemicals shall implement this
         interim storm water management plan pursuant to the deadlines included
         therein.

                                       13
<PAGE>

D.  Interim Enforcement Effluent Limits

28.      On the effective date of this ACO and until the final compliance date
         specified in paragraph 33(d), unless the final date is modified
         pursuant to the provisions of paragraph 72, C.P. Chemicals shall meet
         the interim enforcement effluent limits specified in Attachment VII,
         which is incorporated herein by reference. The Department shall use the
         interim effluent enforcement limits in determining C.P. Chemicals'
         compliance with the terms and conditions of the 1984 Permit. The
         Department's enforcement of violations of these interim effluent
         enforcement limits shall be based upon the stipulated penalties and the
         enforcement mechanisms set forth in this ACO.

                    III. Waste Water Treatment Plant Actions

A.  Middlesex County Utilities Authority ("MCUA")

29.      Pursuant to 33 USC 1314(1), and the Individual Control Strategy
         submitted by the Department and approved by the USEPA, C.P. Chemicals
         is required to discontinue Its discharge of treated ground water and
         process waste water to Woodbridge Creek no later than 6/4/92, and may
         discharge directly to MCUA's treatment plant subject to MCUA's
         approval. Should the June 4, 1992 date be changed legislatively,
         administratively, or judicially, the date in this paragraph shall be
         adjusted accordingly. In the event MCUA does not approve C.P.
         Chemical's discharge: (1) C.P. Chemicals shall immediately develop
         alternative strategies regarding such discharge; and (2) this ACO shall
         not preclude an application by C.P. Chemicals, as a new source, to
         discharge to the Woodbridge Creek. The execution of this ACO shall not
         constitute an approval or disapproval of such an application, and the
         parties reserve all rights regarding such application. These
         alternative strategies shall be subject to the Department's approval.
         Failure of MCUA to approve the discharge shall not constitute a Force
         Majeure event pursuant to paragraphs 75 and 76.

B.  Independent Waste Water Consultant

30.      Within thirty (30) calendar days of the completion of the Department's
         review of a list of consultants submitted by C.P.

                                       14
<PAGE>

         Chemicals, CA'. Chemicals shall obtain the services of an independent
         consultant who shall be responsible to perform an independent
         evaluation of C.?. Chemicals" waste water treatment plant. The
         evaluation shall include, but not be limited to. an assessment of the
         performance of each of the treatment units in relation to their design'
         specifications and the adequacy of the current staffing levels and
         operation and maintenance procedures. The evaluation shall include a
         review of any treatability studies performed in conjunction with the
         projected sewer hookup to MCUA. A report, to include recommendations
         for improved operation at the facility, shall be submitted by the
         independent consultant directly to the Department within sixty (60)
         calendar days after C.P. Chemicals obtains the services of the
         consultant.

31.      C.P. Chemicals shall make all reasonable good faith efforts, to obtain,
         within sixty (60) calendar days after the effective date of this ACO,
         the services of a Compliance Officer ("CO") who shall be responsible
         for determining C.!'. Chemicals' compliance with the Water Pollution
         Control Act, N.J.S.A. 58:10A-1 et seq. The CO shall observe all
         sampling, subject to reasonable exception for sick leave, vacation,
         etc., and shall be employed for a period of not less than two (2)
         years. In order to allow the CO to determine compliance, the CO shall
         be given access to all documentation which relates to the operation of
         the waste water treatment plant, including, but not limited to,
         invoices, manifests, laboratory reports, chains of custody and sampling
         data. C.P.. Chemicals shall give the Department at least two (2) weeks
         notice of any of the CO's planned sick leave, vacation, etc. The
         individual to be employed as CO shall be subject to the approval by the
         Department. Upon the hiring of the CO, C.P. Chemicals shall place into
         escrow an amount equivalent to that individual's salary and maintain
         said escrow for a period of two years. The escrow shall serve as a
         guarantee of that individual's salary for the two-year period. The CO's
         function shall include all aspects of the Site's environmental
         compliance program. The CO shall not report to the plant manager but
         shall report to the Corporate Vice President for environmental affairs.
         The CO's employment shall not be terminated except upon the written
         approval by the Department, unless for cause, or resignation by the
         employee. Cause shall not include reporting of information or results
         unfavorable to C.P. Chemicals. In the event that the CO's employment is
         terminated, C.P. Chemicals shall, no

                                       15
<PAGE>

         later than thirty (30) calendar days thereafter, present to the
         Department a proposed CO candidate subject to the same conditions
         referenced above. If extensions are granted pursuant to paragraphs 75
         and 76, or if the final compliance date is modified pursuant to the
         revisions of paragraph 72, this shall automatically extend, for an
         equivalent time period, the term of employment of the CO. The CO shall,
         no later than the twenty-fifth (25) calendar day of each month,
         together with the DMR provide a written report which must include the
         CO's determination regarding C.P. Chemicals' compliance with all
         sampling, analysis, reporting, and waste water treatment plant
         operations. The Department shall have the authority to confer with the
         CO at any time.

C.       Significant Industrial User ("SIU") Application

32.      On or before May 1, 1991, C.P. Chemicals shall submit an application to
         the Department for a NJPDES Significant Industrial User (SIU) Permit to
         allow its present surface water discharge to be conveyed to the MCUA
         for subsequent treatment and discharge. The SIU application shall
         include the information generated during the treatability analysis
         performed by C.P. Chemicals to determine the effect of its treated
         waste water on MCUA's facility and operation. The treatability analysis
         shall have considered the following items:

a.       pass-through of pollutants, both chemical specific and whole effluent
         toxicity;

b.       interference with any of MCUA's unit operations;

c.       effect on MCUA's sludge quality; and

d.       any treatability resting required by MCUA;

C.P. Chemicals alleges that it is currently not discharging process waste water
to its waste water treatment plant. Therefore, in addition, the following
assessments may be required at such time that C.P. Chemicals begins discharging
process waste water to its waste water treatment plant:

e.       Inhibition tests using the Continuously Fed Batch Reactor (FBR)
         Procedure and Glucose Inhibition Test [see Larson, R.J. and Schaeffer,
         S.L., 1982, A Rapid Method for Determining the Toxicity of Chemicals to
         Activated Sludge. Water Research, 16 (675)];

f.       A Tier II Refractory Toxicity Assessment (RTA) as described in the U.S.
         Environmental Protection Agency document, "Toxicity Reduction
         Evaluation Protocol for Municipal Waste Water Treatment Plants."
         (EPA/600/2-88/062).

D.       Construction Compliance Schedule

13.      C.P. Chemicals shall provide for waste water treatment which is fully
         capable of complying

                                       16
<PAGE>

         with its final NJPDES SIU permit and sewer connection to MCUA, in
         accordance with the following schedule:

a.       On or before November 20, 1991, C.P. Chemicals shall submit to the
         Department a Stage 2 TWA application prepared in accordance with
         N.J.A.C. 7:14A-12.l et seq., including a detailed construction schedule
         consistent with this ACO.

b        On or before April 5, 1992, C.P. Chemicals shall award contracts and
         initiate construction as required in the approved Stage 2 TWA for the
         connection to MCUA, and any other separate Stage 2 TWA that may be
         necessary for the waste water treatment plant.

c.       On or before April 16, 1993, C.P. Chemicals shall complete all
         construction and apply for a Stage 3 TWA in accordance with N.J.A.C.
         7:14A-12.l et seq.

d.       On or before April 17, 1993, C.P. Chemicals shall cease its discharge
         to Woodbridge Creek, and shall discharge waste water only in compliance
         with the final effluent limitations set forth in the SIU permit and
         shall discharge only in compliance with said SIU permit.

The Department recognizes C.P. Chemicals' estimation of the Department's review
time for Stage 2 TWAs of 90 days and 180 days for the SIU application. The
Department shall extend the time for performance as necessary in accordance with
paragraphs 75 and 76 of this ACO. The Department has considered the proposed
construction schedule dated 2/8/91, referenced as Attachment X, in evaluating
C.P. Chemicals' commitment to cease its discharge to Woodbridge Creek.

                     IV. Remedial Investigation and Cleanup

34.      C.P. Chemicals shall select a consultant from the Department's approved
         Term Feasibility Study or Term Design Contract List, and such
         consultant shall conduct the Remedial Investigation, Feasibility Study
         and cleanup of the Site, as set forth in paragraphs 35 through 50
         below.

A.       Remedial Investigation

35.      On or before May 1, 1991, C.P. Chemicals shall submit to the Department
         a detailed draft Remedial Investigation Work Plan (hereinafter the "RI
         Work Plan") in accordance with the scope of work set forth in
         Appendices B, C and D, which are attached hereto and made a part
         hereof.

36.      Within thirty (30) calendar days after receipt of the Department's
         written comments on the draft RI Work Plan, C.P. Chemicals shall modify
         the draft RI Work Plan to conform to the Department's comments and
         shall submit the modified RI Work Plan to the Department. The
         determination as to whether or not the modified RI Work Plan, as
         resubmitted, conforms to

                                       17
<PAGE>

         the Department's comments and is otherwise acceptable to the Department
         shall be made solely by the Department in writing.

37.      Upon receipt of the Department's written final approval of the RI Work
         Plan, C.P. Chemicals shall conduct the remedial investigation in
         accordance with the approved RI Work Plan and the schedule therein.

38.      C.P. Chemicals shall submit to the Department a draft Remedial
         Investigation Report (hereinafter "RI Report") in accordance with
         Appendix B and the RI Work Plan and the schedule therein.

39.      If upon review of the draft RI Report the Department determines that
         additional remedial investigation is required, C.P. Chemicals shall
         conduct additional remedial investigation as directed by the Department
         and submit a second draft RI Report.

40.      Within thirty (30) calendar days after receipt of the Department's
         written comments on the draft RI Report, C.P. Chemicals shall modify
         the draft RI Report to conform to the Department's comments and shall
         submit the modified RI Report to the Department. The determination as
         to whether or not the modified RI Report, as resubmitted, conforms with
         the Department's comments and is otherwise acceptable to the Department
         shall be made solely by the Department in writing.

B.       Feasibility Study

41.      Within thirty (30) calendar days after receipt of the Department's
         written final approval of the RI Report, or as otherwise directed by
         the Department, C.P. Chemicals shall submit to the Department a
         detailed draft Feasibility Study Work Plan (hereinafter, "FS Work
         Plan") in accordance with the scope of work set forth in Appendix E,
         which is attached hereto and made a part hereof, and which shall also
         address the final storm water management plan for the Site.

42.      Within thirty (30) calendar days after receipt of the Department's
         written comments on the draft FS Work Plan, C.P. Chemicals shall modify
         the draft FS Work Plan to conform to the Department's comments and
         shall submit the modified FS Work Plan to the Department. The
         determination as to whether or not the modified FS Work Plan, as
         resubmitted, conforms to the Department's comments and is otherwise
         acceptable to the Department shall be made solely by the Department in
         writing.

43.      Upon receipt of the Department's written final approval of the FS Work
         Plan, C.P. Chemicals shall conduct the feasibility study in accordance
         with the approved FS Work Plan and the schedule therein.

44.      C.P. Chemicals shall submit to the Department a draft Feasibility Study
         Report (hereinafter

                                       18
<PAGE>

         "FS Report") in accordance with Appendix E and the approved FS Work
         Plan and the schedule therein.

45.      Within thirty (30) calendar days after receipt of the Department's
         written comments on the draft FS Report, C.P. Chemicals shall modify
         the draft FS Report to conform to the Department's comments and shall
         submit the modified FS Report to the Department. The determination as
         to whether or not the modified FS Report, as resubmitted, conforms the
         Department's comments and is otherwise acceptable to the Department
         shall be made solely by the Department in writing.

C.       Remedial Action

46.      The Department will make the selection of the remedial action
         alternative based on the criteria set forth in Appendix E, Section I.D.

47.      Within sixty (60) calendar days after receipt of the Department's
         written notification of selection of a remedial action alternative,
         C.P. Chemicals shall submit to the Department a detailed draft Remedial
         Action Plan, which shall include the final Storm water management plan,
         in accordance with the scope of work set forth in Appendix V, which is
         attached hereto and made a part hereof.

48.      Within thirty (30) calendar days after receipt of. the Department's
         written comments on the draft Remedial Action Plan, C.P. Chemicals
         shall modify the draft Remedial Action Plan to conform to the
         Department's comments and shall submit the modified Remedial Action
         Plan to the Department. The determination as to whether or not the
         modified Remedial Action Plan, as resubmitted, conforms to the
         Department's comments and is otherwise acceptable to the Department
         shall be made solely by the Department in writing.

49.      Upon receipt of the Department's written final approval of the Remedial
         Action Plan, C.P. Chemicals shall implement the approved Remedial
         Action Plan in accordance with the schedule therein.

D.       Additional Remedial Investigation and Remedial Action

50.      If at any time prior to C.P. Chemicals' receipt of written notice from
         the Department pursuant to paragraph 109, the Department determines
         that the criteria set forth in Appendix E (Section I.D.) are not being
         achieved or that additional remedial investigation and/or remedial
         action is required to protect human health or the environment, C.P.
         Chemicals shall conduct such additional activities as directed by the
         Department and in accordance with this ACO.

E.       Progress Reports

                                       19
<PAGE>

51.      C.P. Chemicals shall submit to the Department quarterly progress
         reports; the first progress report shall be submitted on or before the
         30th calendar day of the month following the first full quarter after
         the effective date of this ACO. Each progress report thereafter shall
         be submitted on or before the 30th calendar day of the month following
         the quarter being reported. Each progress report shall detail the
         status of C.P. Chemicals' compliance with this ACO and shall include
         the following:

a.       Identification of the Site and reference to this ACO;

b.       Identify specific requirements of this ACO (including the corresponding
         paragraph number or schedule) which were initiated during the reporting
         period;

c.       Identify specific requirements of this ACO (including the corresponding
         paragraph number or schedule) which were initiated in a previous
         reporting period, which are still in progress and which will continue
         to be carried out during the next reporting period;

d.       Identify specific requirements of this ACO (including the corresponding
         paragraph number or schedule) which were completed during this
         reporting period;

e.       Identify specific requirements of this ACO (including the corresponding
         paragraph numbers or schedule) which should have been completed during
         the reporting period and were not;

f.       An explanation of any non-compliance with any approved work plan(s),
         schedule(s) or Remedial Action Plan, and actions taken or to be taken
         to rectify non-compliance;

g.       Identify the specific requirements of this ACO (including the
         corresponding paragraph number or schedule) that will be initiated
         during the upcoming reporting period;

h.       C.P. Chemicals and the Department agree to meet quarterly, if
         necessary, in order to review the progress reports, as well as any
         other issues the parties deem to be appropriate.

                             V. Operational Records

52.      Immediately upon the execution of this ACO by C.P. Chemicals, C.P.
         Chemicals shall, upon reasonable notice, make available, for inspection
         and copying, all operational records associated with the Site,
         including, but not limited to, documents relating to the waste water
         treatment plant operations, effluent discharges, hazardous waste
         documents relating to the shipments and receipts of hazardous waste,
         documents relating to the treatment, storage and/or disposal of
         hazardous wastes, hazardous substances, hazardous pollutants and
         pollutants, as well as any other documents deemed necessary by the
         Department. Production information not directly related to state
         environmental law (for example, quantity of virgin raw materials,
         commercial products, cost information and the like) is confidential and
         may

                                       20
<PAGE>

         be reviewed by the Department on a confidential basis. No copies of
         such information will be retained by the Department, the Department
         shall not treat such copies as public records, and all such copies will
         be returned to C.P. Chemicals, unless these copies provide a basis for
         any subsequent enforcement action. The determination as to whether or
         not this information could possibly provide a basis for a subsequent
         enforcement action shall be made solely by the Department.

                                   VI. Permits

53.      This ACO shall not be construed to be a permit or in lieu of a permit
         for existing or former activities which require permits and it shall
         not relieve C.P. Chemicals from obtaining and complying with all
         applicable Federal, State and local permits necessary for any future
         activities which C.P. Chemicals must perform in order to carry out the
         obligations of this ACO. The interim enforcement effluent limitations
         set forth in Attachment VII will be deemed to be the effluent
         limitations for determining compliance with the Water Pollution Control
         Act, N.J.S.A. 58:10A-l et seq., as amended by P.L. 1990, c.28, and any
         regulations -- --- promulgated pursuant thereto, including but not
         limited to: whether there is a serious violation; whether and by how
         much an effluent limitation has been exceeded; and whether C.P.
         Chemicals is a significant non-complier. This ACO precludes the use of
         a more stringent frequency or factor of exceedance than those set forth
         in the Water Pollution Control Act, as amended, to determine if a
         serious violation has occurred or if C.P. Chemicals is a significant
         non-complier.

54.      No provisions of the 1984 NJPDES Permit are modified by this ACO. The
         enforcement construction compliance schedule set forth above in
         paragraph 33 and the interim enforcement effluent limits set forth in
         Attachment VII are enforcement compliance requirements that C.P.
         Chemicals shall meet until C.P. Chemicals begins discharging to the
         MCUA, or until implementation of the approved alternative strategy
         referenced in paragraph 29.

55.      C.P. Chemicals shall submit applications for all Federal, State and
         local permits required to carry out the obligations of this ACO in
         accordance with the approved time schedules.

56.      Within thirty (30) calendar days after receipt of written comments
         concerning any permit application to a Federal, State or local agency,
         or sooner if required by the permitting agency, C.P. Chemicals shall
         modify the permit application to conform to the agency's comments
         and resubmit the permit application to the agency. The determinations
         as to whether or not the permit application, as resubmitted, conforms
         with the Department's comments or is otherwise acceptable to the
         Department shall be made

                                       21

<PAGE>

         solely by the Department in writing. To the extent that the terms and
         conditions of any such permit or permit modifications are substantially
         equivalent with the terms and conditions agreed to under this ACO, C.P.
         Chemicals waives any rights it may have to a hearing on such terms and
         conditions during any such permit process. To the extent that such
         terms and conditions are not substantially equivalent, C.P. Chemicals
         reserves any rights it may have.

57.      This ACO shall not preclude the Department from requiring that C.P.
         Chemicals apply for any permit or permit modification issued by the
         Department under the authority of the Water Pollution Control Act,
         N.J.S.A. 58:10A-l et seq., the Solid Waste Management Act, N.J.S.A.
         13:1E-l et seq. and/or any other statutory authority for the matters
         covered herein. The terms and conditions of any such permit or permit
         modification shall not be preempted by the terms and conditions of this
         ACO even if the terms and conditions of any such permit or permit
         modification are more stringent than the terms and conditions to this
         ACO.

                            VII. Project Coordination

58.      C.P. Chemicals shall submit to the Department all documents required by
         this ACO, including correspondence relating to Force Majeure issues, by
         certified mail, return receipt requested, or by Federal Express, or by
         hand delivery with an acknowledgment of receipt form for the
         Department's signature. The date that the Department executes the
         receipt or acknowledgment will be the date the Department uses to
         determine C.P. Chemicals' compliance with the requirements of this ACO
         and the applicability of stipulated penalties and any other remedies
         available to the Department.

59.      The individual identified in this paragraph shall be the Department's
         contact for C.P. Chemicals for all matters concerning this ACO. C.P.
         Chemicals' contact for the Department for all matters concerning this
         ACO shall be Mr. Thomas L. Moran, C.P. Chemicals, Inc., One Parker
         Plaza, Fort Lee, New Jersey 07024, and the Department will copy George
         J. Tyler, Esq., Giordano, Halleran & Ciesla, 270 State Highway #35 P.O.
         Box 190, Middletown, NJ 07048, on all correspondence submitted to C.P.
         Chemicals pursuant to this ACO.

60.      C.P. Chemicals shall submit four (4) or more copies, as advised, of all
         documents required by this ACO, unless otherwise directed in writing by
         the Department, to:

                  Ian R. Curtis, Case Manager
                  New Jersey Department of Environmental Protection
                  Division of Hazardous Waste Management
                  Bureau of Federal Case Management
                  401 East State Street, CN 028
                  Trenton, NJ 08625

Also, C.P. Chemicals, unless otherwise directed by the Department in writing,
shall submit three (3) copies of all documents required by this ACO to:

                                       22

<PAGE>

                  Ellen Doering, Chief
                  New Jersey Facility Section
                  USEPA  - Region II
                  Room 1138
                  26 Federal Plaza
                  New York, NY 10278

61.      C.P. Chemicals shall notify, in writing, and shall attempt to contact
         telephonically the contact persons listed in paragraph 60, above, at
         least two weeks prior to the initiation of any field activities.

                          VIII. Financial Requirements

A.       Financial Assurance

62.      Within ninety (90) calendar days after the effective date of this ACO,
         C.P. Chemicals shall obtain and provide to the Department financial
         assurance in the form of either an irrevocable letter of credit or a
         performance bond or other form of acceptable financial assurance, for
         example an insurance policy, in the amount of $500,000.00. C.P.
         Chemicals hereby agrees to adjust such financial assurance at the end
         of the RI/FS to reflect the estimated cost of an engineering design.
         C.P. Chemicals further agrees to adjust said financial assurance at the
         end of the engineering design to reflect the estimated cost of the
         remedial program. However, at no time shall the financial assurance be
         allowed to drop below $500,000.00. C.P. Chemicals shall also establish
         an irrevocable standby trust fund, with an initial deposit of One
         Thousand dollars ($1,000.00). The irrevocable letter of credit, the
         performance bond and the irrevocable trust fund agreement shall meet
         the following requirements:

i.       Letter of Credit

         a.   Is identical to the wording specified in Appendix G for the letter
              of credit, which is attached hereto and made a part hereof;

         b.   Is issued by a New Jersey State or Federally chartered bank,
              savings bank, or savings and loan association which has its
              principal office in New Jersey or New York City, unless otherwise
              approved by the Department; and

         c.   Is accompanied by a letter from C.P. Chemicals referring to the
              Letter of Credit by number, issuing institution and date and
              providing the following information: the name and address of the
              facility and/or Site which is the subject of the ACO and the
              amount of funds securing the C.P. Chemicals' performance of all
              its obligations under the ACO.

                                       23

<PAGE>

ii.      Performance Bond

         a.   Is identical to the wording specified in Appendix I for
              performance bonds, which is attached hereto and made a part
              hereof;

         b.   The surety company issuing the performance bond shall, at a
              minimum, be among those listed as acceptable sureties on Federal
              bonds in the most recent version of Circular 570 issued by the
              U.S. Department of the Treasury, which is published annually on
              July 1 in the Federal Register; and

         c.   Is accompanied by a letter from C.P. Chemicals referring to the
              Performance Bond by number, issuing institution and date and
              providing the following information: the name and address of the
              facility and/or site which is the subject of the ACO and the
              amount of fund securing the company's performance of all its
              obligations under the ACO.

iii.     Standby Trust.

         a.   Is identical to the wording specified in Appendix H, which is
              attached hereto and made a part hereof;

         b.   The irrevocable standby trust fund shall be the depository for all
              funds paid pursuant to a draft by the Department against the
              letter of credit or payments made under the performance bond as
              directed by the Department;

         c.   The trustee shall be an entity which has the authority to act as a
              trustee and whose trust operations are regulated and examined by a
              Federal or New Jersey agency;

         d.   Is accompanied by an executed certification of acknowledgment that
              is identical to the wording specified in Appendix H.

63.      C.P. Chemicals shall establish and maintain the standby trust fund
         until terminated by the written agreement of the Department, the
         trustee and C.P. Chemicals, or of the trustee and the Department if
         C.P. Chemicals ceases to exist. C.P. Chemicals shall maintain the
         letter of credit, performance bond, or other form of acceptable
         financial assurance until the Department provides written notification
         to C.P. Chemicals that the financial assurance is no longer required
         for compliance with this ACO. In the event that the Department
         determines that C.P. Chemicals has failed to perform any of its
         obligations under this ACO, the Department may proceed to have the
         financial assurance deposited into the standby trust; provided,
         however, that before the Department draws on the letter of credit or
         makes a claim against the performance bond or other financial
         assurance, the Department shall notify C.P. Chemicals in writing of the
         obligation(s) which it has not performed, and C.P. Chemicals

                                       24
<PAGE>

         shall have a reasonable time, not to exceed thirty (30) calendar days,
         unless approved in writing by the Department, to perform such
         obligation(s).

64.      At any time, C.P. Chemicals may apply to the Department to substitute
         other financial assurances in a form, manner and amount acceptable to
         the Department.

B.       Project Cost Review

65.      Beginning three hundred sixty-five (365) calendar days after the
         effective date of this ACO and annually thereafter on that same
         calendar day, C.P. Chemicals shall submit to the Department a detailed
         review of all costs required for C.P. Chemicals' compliance with this
         ACO. This cost review shall include a detailed summary of all monies
         spent pursuant to this ACO up to thirty (30) days prior to the
         submission, the estimated cost of all known future expenditures
         required to comply with this ACO (including any operation and
         maintenance costs), and the reason for any changes from the previous
         cost review submitted by C.P. Chemicals. These cost reviews are in
         addition to the adjustments in the financial assurance called for in
         paragraph 67.

66.      At any time after C.P. Chemicals submits the first cost review pursuant
         to the preceding paragraph, C.P. Chemicals may request the Department's
         approval to reduce the amount of the financial assurance to reflect the
         remaining costs of performing its obligations under this ACO. If the
         Department grants written approval of the request, C.P. Chemicals may
         amend the amount of the then existing letter of credit, performance
         bond, or other form of acceptable financial assurance.

67.      If the estimated cost of meeting C.P. Chemicals' obligations in this
         ACO at any time increases to an amount greater than the financial
         assurance, C.P. Chemicals shall, within forty-five (45) calendar days
         after receipt of written notice of the Department's determination,
         increase the amount of the then existing letter of credit, performance
         bond, or other form of financial assurance, so that it is equal to the
         estimated cost as determined by the Department. C.P. Chemicals shall
         provide the amended financial assurance to the Department within seven
         (7) calendar days after it has been obtained.

C.       Oversight Cost Reimbursement

68.      Within thirty (30) calendar days after receipt from the Department of a
         written summary of all costs incurred in connection with its oversight
         functions of this ACO for a fiscal year, or any part thereof, C.P.
         Chemicals shall submit to the Department a cashier's or certified check
         payable to the "Treasurer, State of New Jersey" for the full amount of
         the Department's oversight costs.

D.       Stipulated Penalties and Cessation of Operations

                                       25
<PAGE>

69.      Except as provided in paragraphs 75 and 76 below, upon a demand made
         the Department, C.P. Chemicals shall pay stipulated penalties to the
         Department for its failure to comply with any of the deadlines,
         schedules, or limits contained in, or any other requirements of, this
         ACO, including those established and approved hy the Department in
         writing pursuant to this ACO. Each deadline, schedule, limit or other
         requirement not complied with shall be considered a separate violation.
         The Department agrees to use its best efforts to respond, within ten
         (10) calendar days, to any request by C.P. Chemicals regarding
         clarification of any such deadline, schedule, limit or other
         requirements. Failure by the Department to respond within such time
         period shall not preclude the assessment of stipulated penalties for
         any violations. Payment of stipulated penalties shall be made according
         to the following schedule, unless the Department has modified the
         compliance date pursuant to the Force Majeure provisions
         hereinbelow:

         Calendar Days After Due Date             Stipulated Penalties
         or for construction or operation         --------------------
         without a TWA
         --------------------------------
                1 - 7                             $ 500 per calendar day
                8 - 14                            $ 1,000 per calendar day
                15 - 21                           $ 1,500 per calendar day
                22 - 28                           $ 2,500 per calendar day
                29 - over                         $ 5,000 per calendar day

         For violations of any interim enforcement effluent limits contained in
         this ACO or for any reporting, monitoring or sampling violations, C.P.
         Chemicals shall pay a stipulated penalty of $5,000 per violation which
         shall be included in any penalty mandated under the Water Pollution
         Control Act, N.J.S.A. 58:10A-1 et seq., as amended by P.L. 1990, c.28.
         These stipulated penalties do not apply to the construction and
         compliance schedule, or the completion date, with respect to the tie-in
         to the MCUA.

70.      Any such penalty shall be due and payable no later than fourteen (14)
         calendar days following receipt of a written demand by the Department.
         Payment of stipulated penalties shall be made by a cashier's or
         certified check payable to the "Treasurer, State of New Jersey".

71.      C.P. Chemicals shall pay a stipulated penalty of $10,000.00 per month
         for its failure to meet the deadline set forth in paragraph 29, above.
         C.P. Chemicals agrees to cease its discharge of treated ground water
         and process waste water to Woodbridge Creek no later than April 17,
         1993, unless such date is extended pursuant to the provisions of
         paragraph 72, or pursuant to the provisions of paragraphs 75 and 76
         (Force Majeure). In the event that C.P. Chemicals continues to
         discharge storm water to the Woodbridge Creek, such storm water shall
         be treated prior to discharge. The $10,000.00 per month stipulated
         penalty shall not apply to the extent compliance dates are extended
         beyond the April 17, 1993 deadline pursuant to

                                       26
<PAGE>

         paragraphs 75 and 76.

72.      C.P. Chemicals agrees that if the date for connection to the MCUA
         (April 17, 1993) is not met, it will pay an additional penalty with a
         principal amount of $1,000,000.00. Alternatively, C.P. Chemicals may
         cease, on April 17, 1993, discharge of treated process and ground water
         effluent to the Woodbridge Creek and pay a penalty with a principal
         amount of $500,000.00. The Department reserves the right to seek
         enforcement of the April 17, 1993 date in Superior Court,
         notwithstanding payment of the higher penalty, unless the Department
         determines that C.P. Chemicals is diligently continuing to pursue its
         connection to the MCUA. However, if the Department determines that the
         continuation of C.P. Chemicals' discharge poses an immediate risk to
         public health or an immediate risk to the environment, the Department
         reserves the right to seek injunctive relief against C.P. Chemicals to
         cease its discharge. C.P. Chemicals further agrees to cease the process
         and ground water discharged to Woodbridge Creek no later than 12/31/93.
         In the event C.P. Chemicals elects to continue the process and ground
         water discharge beyond 4/17/93, C.P. Chemicals shall, on 4/17/93, file
         an amended interim storm water management plan including an appropriate
         NJPDES-DSW permit application. C.P. Chemicals also agrees not to
         discharge storm water to Woodbridge Creek after 12/31/93 except in
         conformity with a final NJPDES-DSW permit, which permit shall take into
         account, if appropriate, the remedial action plan and the final storm
         water management plan. Nothing in this ACO shall be construed to set a
         specific date for completion of the remedial action plan and the final
         storm water management plan, as such a specific date will be
         established as part of the implementation of paragraphs 35 through 50
         above. The Department anticipates that a final NJPDES-DSW permit may be
         issued within 8 months from its date of receipt of a completed permit
         application. The execution of this ACO shall not constitute approval or
         disapproval of such application, and the parties reserve all rights
         regarding such application. The Department may extend the time for
         performance as necessary in accordance with paragraphs 75 and 76 of
         this ACO. All payments pursuant to this paragraph shall be made in
         accordance with the attached schedule (Attachment XI), with no penalty
         for prepayment, and with interest calculated at 8.57% per annum. The
         first payment shall be due with the next annual payment pursuant to
         paragraph 20. In the event C.P. Chemicals elects to pay the
         $1,000,000.00 penalty pursuant to this paragraph, the final installment
         shall be due on the same date as the last scheduled payment pursuant to
         paragraph 20.

73.      All penalties paid pursuant to this ACO shall be considered civil
         and/or civil administrative penalties.

74.      Payment of stipulated penalties does not alter C.P. Chemicals'
         responsibility to complete any requirements of this ACO.

                                IX. Force Majeure

75.      If any event as specified in the following paragraph occurs which C.P.
         Chemicals believes

                                       27

<PAGE>

         will or may cause delay in the compliance or non-compliance with any
         provision of this ACO, C.P. Chemicals shall notify the Department in
         writing within ten (10) calendar days of becoming aware of the delay,
         or anticipated delay, as appropriate, referencing this paragraph and
         describing, to the extent practicable, the anticipated length of the
         delay, the precise cause or causes of the delay, any measures taken or
         to be taken to minimize the delay, and the time required to take any
         such measures to minimize the delay. C.P. Chemicals shall take all
         reasonably necessary actions within its control to prevent or minimize
         any such delay.

         76. If the Department finds that: (a) C.P. Chemicals has complied with
         the notice requirements of the preceding paragraph; (b) that any delay
         or anticipated delay has been or will be caused by fire, flood, riot,
         strike or other circumstances beyond the reasonable control of C.P.
         Chemicals, including delay by the Department or other governmental
         agency; and (c) C.P. Chemicals has taken all reasonably necessary
         action within its control, to prevent or minimize any such delay, the
         Department shall extend the time for performance hereunder for a period
         no longer than the delay resulting from such circumstances. If the
         Department determines that: (i) C.P. Chemicals has not complied with
         the notice requirements of the preceding paragraph, or (ii) the event
         causing the delay is not beyond the control of C.P. Chemicals, or (iii)
         C.P. Chemicals has not taken all necessary action to prevent or
         minimize the delay, this paragraph shall not be applicable and failu re
         to comply with the provisions of this ACO shall constitute a breach of
         the requirements of this ACO. The burden of proving that the existence
         of any delay is caused by circumstances beyond the control of C.P.
         Chemicals and the length of any such delay attributable to those
         circumstances shall rest with C.P. Chemicals. Increases in the costs or
         expenses incurred by C.P. Chemicals which do not create an inability to
         fulfill the requirements of this ACO shall not constitute inability the
         Department shall have the right to draw upon the financial assurance as
         provided in paragraph 62. Delay in the attainment of an interim
         requirement shall not automatically justify or excuse delay in the
         attainment of subsequent requirements. Force Majeures hall not include
         non-attainment of the goals, standards, guidelines and requirements set
         forth in the appendices attached hereto. Force Majeure shall not
         include contractor's breach unless such breach falls under (a), (b) and
         (c) of this paragraph.

                            X. Reservation of Rights

77.      The Department reserves the right, in appropriate circumstances, to
         unilaterally terminate this ACO in the event C.P. Chemicals violates
         the terms of this ACO.

78.      a.   With respect to the Solid Waste Management Act ("SWMA") nothing in
              this ACO shall preclude the Department from seeking civil or civil
              administrative penalties or any other legal or equitable relief
              against C.P. Chemicals for matters not set forth in the FINDINGS
              of this ACO. However, for matters which could have been
              encompassed in the Department's investigation described in this
              ACO, the

                                       28
<PAGE>

              Department agrees not to take such action unless the Department
              finds that C.P. Chemicals' representation set forth in paragraph 7
              of this ACO is incorrect. If the Department's investigation
              conducted pursuant to paragraph 52 reveals violations which could
              not have been encompassed in the Department's investigation
              described in this ACO, the Department reserves the right to take
              enforcement action regarding any of such violations. This
              paragraph relates to all SWMA matters arising up to the effective
              date of this ACO.

         b.   Except as otherwise provided in paragraphs 69 and 72, with respect
              to the Water Pollution Control Act, as amended, nothing in this
              ACO shall preclude the Department from seeking civil or civil
              administrative penalties or any other legal or equitable relief
              against C.P. Chemicals for matters not encompassed in the DMRs
              filed by C.P. Chemicals through the date of final compliance with
              this ACO. Further, this ACO governs any and all matters that have
              arisen or may arise under said Act with respect to the discharge
              to Woodbridge Creek and the compliance schedule, up to the date of
              final compliance.

         c.   With respect to the Spill Compensation and Control Act nothing in
              this ACO shall preclude the Department from seeking civil or civil
              administrative penalties or any other legal or equitable relief
              against C.P. Chemicals for matters not covered by the FINDINGS of
              this ACO. This ACO relates to any and all matters covered by the
              FINDINGS that have arisen or the underlying facts known to the
              Department which may arise up to the date of execution of this
              ACO.

79.      In the event of a termination or cessation of operations, or any other
         event which triggers the applicability of the Environmental Cleanup
         Responsibility Act, N.J.S.A. 13:lK-6 et seq. (ECRA), C.P. Chemicals
         agrees to comply with all the requirements of ECRA. Prior to the
         completion of the Remedial Action Plan, the Department agrees that the
         approved sampling, cleanup, and other technical activities required by
         the terms of this ACO shall satisfy the ECRA technical requirements for
         these areas of environmental concern which have been addressed under
         this ACO.

80.      This ACO shall not be construed to affect or waive the claims of
         Federal or State natural resource trustees against any party for
         damages for injury to, destruction of, or loss of natural resources.

81.      The Department reserves the right to require C.P. Chemicals to take or
         arrange for the taking of, any and all additional measures should the
         Department determine that such actions are necessary to protect human
         health or the environment. Nothing in this ACO shall constitute a
         waiver of any statutory right of the Department to require C.P.
         Chemicals to undertake such additional measures should the Department
         determine that such measures are necessary.

82.      Nothing in this ACO, including the Department's assessment of
         stipulated penalties, shall

                                       29
<PAGE>

         preclude the Department from seeking maximum civil or civil
         administrative penalties or any other legal or equitable relief against
         C.P. Chemicals, for violations of this ACO. In any such action brought
         by the Department under this ACO for injunctive relief, or civil, civil
         administrative or stipulated penalties, C.P. Chemicals may raise, among
         other defenses, a defense that C.P. Chemicals failed to comply with a
         decision of the Department, made pursuant to this ACO, on the basis
         that the Department's decision was arbitrary, capricious or
         unreasonable. If C.P. Chemicals is successful in establishing such a
         defense, C.P. Chemicals shall not be liable for stipulated penalties
         for failure to comply with that particular requirement of the ACO.
         Although C.P. Chemicals may raise such defenses in any action initiated
         by the Department for injunctive relief, termination of this ACO, or
         stipulated penalties, C.P. Chemicals shall not otherwise seek review of
         any decision made or to be made by the Department pursuant to this ACO
         and under no circumstances shall C.P. Chemicals initiate any action or
         proceeding challenging any decision made or to be made by the
         Department pursuant to this ACO.

83.      Paragraphs 77, 78, 79, 80, 81 and 82 notwithstanding, C.P. Chemicals
         reserves whatever rights it has to contest, after implementation of the
         remediation for which the financial assurance was used by the
         Department, that the Department's use of the financial assurance
         provided pursuant to this ACO was arbitrary, capricious or
         unreasonable. The Department reserves its rights to contest any such
         action.

                             XI. General Provisions

84.      By its execution of this ACO, C.P. Chemicals hereby withdraws all
         requests for administrative hearings regarding the Administrative
         Orders and Notices of Civil Administrative Penalty Assessment
         referenced in the FINDINGS above. All such AO and NOCAPA actions are
         retained within the jurisdiction of the Department, and the stay issued
         by the Department on August 28, 1989 and revised on September 22, 1989,
         remains in effect while this ACO remains in effect. Additionally, upon
         execution of this ACO, C.P. Chemicals shall immediately, voluntarily,
         dismiss, with prejudice, the action captioned: "C.P. Chemicals, Inc. v.
         N.J. Department of Environmental Protection", Docket No. AM-280- 90T3,
         Motion No. M-1323-90. The Department and C.P. Chemicals agree that this
         ACO shall be the basis for the settlement of the State of New Jersey v.
         C.P. Chemicals, Inc., Docket No. C-3916-89E pending before the
         Honorable Erminie L. Conley, J.S.C. (the "Chancery Action") and that
         this ACO shall be incorporated by reference in the Settlement and
         Dismissal with Prejudice in that matter. Settlement of that matter is
         predicated on the comprehensive nature of this ACO. The Department and
         C.P. Chemicals further agree that the Department has the primary, but
         not exclusive, jurisdiction to enforce the environmental laws of the
         State of New Jersey at their discretion, and that the Chancery Action
         sought to, and did, enforce the NJPDES Permit issued to C.P. Chemicals.

85.      This ACO shall be binding on C.P. Chemicals, its agents, successors,
         assignees and any trustee in bankruptcy or receiver appointed pursuant
         to a proceeding in law or equity.

                                       30
<PAGE>

86.      C.P. Chemicals shall perform all work conducted pursuant to this ACO in
         accordance with prevailing professional standards.

87.      C.P. Chemicals shall require that the independent waste water
         consultant referred to in this ACO submit simultaneously to the
         Department all data, information, or any other materials, that it
         submits to C.P. Chemicals or its agents. Failure of the consultant to
         submit simultaneously shall be considered a violation of this ACO by
         C.P. Chemicals. Regarding all other deliverables under this ACO, C.P.
         Chemicals shall require that all independent consultants submit such
         deliverables to the Department simultaneously with the submission of
         such deliverables to C.P. Chemicals.

88.      C.P. Chemicals shall conduct all Site operations in accordance with
         the Health and Safety plan developed for this Site (as set forth in
         Appendix B). All Site activities shall be conducted in accordance with
         all general industry (29 CFR 1910) and construction (29 CFR 1926)
         standards of the federal Occupational Safety and Health Administration
         (OSHA), U.S. Department of Labor, as well as any other State or
         municipal codes or ordinances that may apply. Special attention shall
         be given to compliance with those requirements set forth in OSHA's
         final rule entitled "Hazardous Waste Operations and Emergency
         Response", Section 1910.120 of Subpart H of 29 CFR (published March 6,
         1989, Volume 54, Number 42, Federal Register).

89.      In accordance with N.J.S.A. 45:8-45, all plans or specifications
         involving professional engineering, submitted pursuant to this ACO,
         shall be submitted affixed with the seal of a professional engineer
         licensed pursuant to the provisions of N.J.S.A. 45:8-1 et seq.

90.      C.P. Chemicals shall conform all actions pursuant to this ACO with all
         applicable Federal, State, and local laws and regulations.

91.      All appendices referenced in this ACO, as well as all reports, work
         plans and documents required under the terms of this ACO are, upon
         approval by the Department, incorporated into this ACO by reference and
         made a part hereof.

92.      Each field activity to be conducted pursuant to this ACO shall be
         coordinated by an on-site professional(s) with experience relative to
         the particular activity being conducted at the Site each day, such as
         experience in the area of hydrogeology, geology, environmental
         controls, risk analysis, health and safety or soils.

93.      Upon the receipt of a written request from the Department, C.P.
         Chemicals shall submit to the Department all data and information,
         including technical records and contractual documents, concerning
         pollution at and/or emanating from the Site, or which has emanated
         from the Site, including raw sampling and monitor data, whether or not
         such data and information, including technical records and contractual
         documents, was developed pursuant to this ACO. By signing this ACO,
         C.P. Chemicals does not waive the right to assert any

                                       31
<PAGE>

         attorney-client privilege regarding the information requested pursuant
         to this paragraph, but agrees not to assert any attorney-client
         privilege regarding data, technical records and contractual documents
         requested pursuant to this paragraph.

94.      C.P. Chemicals shall preserve, during the pendency of this ACO and for
         a minimum of six (6) years after its termination, all data, records and
         documents in its possession or in the possession of its divisions,
         employees, or agents (except for data, records and documents also in
         the possession of C.P. Chemicals), which relate in any way to the
         implementation of work under this ACO, despite any document retention
         policy to the contrary. After this six year period, C.P. Chemicals
         shall notify the Department no later than thirty (30) calendar days
         prior to the destruction of any such documents. If the Department
         requests in writing that some or all of the documents be preserved for
         a longer time period, C.P. Chemicals shall comply with that request.
         Upon receipt of a written request by the Department, C.P. Chemicals
         shall submit to the Department all non-privileged records or copies of
         any such records.

95.      Obligations and penalties of the Order are imposed pursuant to the
         police powers of the State of New Jersey for the enforcement of the law
         and the protection of the public health, safety and welfare and are not
         intended to constitute debt or debts which may be limited or discharged
         in a bankruptcy proceeding.

96.      In addition to the Department's statutory and regulatory rights to
         enter and inspect, C.P. Chemicals shall allow the Department and its
         authorized representatives access to the Site during reasonable
         business hours, unless cause exists justifying access at other times
         for the purpose of monitoring, without unreasonable interference with
         business operations, C.P. Chemicals' compliance with this ACO and/or to
         perform any remedial activities C.P. Chemicals fails to perform as
         required by this ACO.

97.      C.P. Chemicals shall not construe any informal advice, guidance,
         suggestions, or comments by the Department, or by persons acting on
         behalf of the Department, as relieving C.P. Chemicals of its obligation
         to obtain written approvals as required herein, unless the Department
         specifically relieves C.P. Chemicals of such obligations, in writing in
         accordance with the following paragraph.

98.      No modification or waiver of this ACO shall be valid except by written
         amendment to this ACO duly executed by C.P. Chemicals and the
         Department.

99.      C.P. Chemicals hereby consents to and agrees to comply with this ACO
         which shall be fully enforceable as an Order in the New Jersey Superior
         Court upon the filing of a summary action for compliance pursuant to
         N.J.S.A. 13:ID-1 et seq., the Water Pollution Control Act, N.J.S.A.
         58:10A-1 et seq ., the Solid Waste Management Act, N.J.S.A. 13:1E-1
         et seq., and/or the Spill Compensation and Control Act, N.J.S.A.
         58:10-23.11 et seq.

                                       32

<PAGE>

100.     In the event that the Department determines that a public meeting
         concerning the cleanup of the Site is necessary at any rime, C.P.
         Chemicals shall ensure that the C.P. Chemicals' appropriate
         representative is prepared, available, and participates in such a
         meeting upon notification from the Department of the date, time and
         place of such meeting.

101.     C.P. Chemicals waives its rights to an administrative hearing
         concerning the entry of this ACO pursuant to N.J.S.A. 52:14B-1 et seq.
         and N.J.S.A. 58:10A-l et seq., N.J.S.A. 58:10- 23.11 et seq., and
         N.J.S.A. 13:lE-l et seq.

102.     C.P. Chemicals agrees not to contest the authority or jurisdiction of
         the Department to issue this ACO; C.P. Chemicals further agrees not to
         contest the terms or conditions of this ACO, except as to
         interpretation or application of such terms and conditions in any
         action brought by the Department to enforce the provisions of this ACO.

103.     C.P. Chemicals shall provide a copy of this ACO to each contractor and
         subcontractor retained to perform the work required by this ACO and
         shall condition all contracts and subcontracts entered for the
         performance of such work upon compliance with the terms and conditions
         of this ACO. C.P. Chemicals shall be responsible to the Department for
         ensuring that their contractors and subcontractors perform the work
         herein in accordance with this ACO.

104.     C.P. Chemicals shall give written notice of this ACO to any successor
         in interest no later than 90 calendar days prior to transfer of
         ownership of C.P. Chemicals' facilities which are the subject of this
         ACO, and shall simultaneously verify to the Department that such notice
         has been given. This requirement shall be in addition to any other
         statutory or regulatory requirements arising from the transfer of
         ownership of C.P. Chemicals' facilities.

105.     C.P. Chemicals agrees not to bring an action or maintain any existing
         or future claim or demand upon any State funds, including the New
         Jersey Spill Compensation Fund, N.J.S.A. 58:10-23.11i and the Sanitary
         Landfill Closure Fund, for the cost of investigation and remediation or
         any other actions required by this ACO and for damages sustained by
         C.P. Chemicals or its successors and assignees as a result at
         contamination attributable to C.P. Chemicals or its predecessor's
         ownership and/or operations at the Site. This provision shall be
         construed as a covenant not to sue or make any claim or demand;
         provided, however, C.P. Chemicals does not release or waive any right
         it may have to seek damages from a third party for such costs or
         damages.

106.     No later than sixty (60) calendar days after the effective date of this
         ACO, C.P. Chemicals shall record a copy of this ACO with the County
         Clerk, Middlesex County, State of New Jersey and submit a letter to the
         Department which shall include the deed book and page number on which
         the ACO was recorded.

107.     The Site that is the subject of this ACO may be freely alienated
         provided that:

                                       33

<PAGE>

         a.   No later than ninety (90) calendar days prior to the date of such
              alienation, C.P. Chemicals shall notify the Department in writing
              of the proposed alienation, the name of the grantee, and a
              description of the grantor's obligations, if any, proposed to be
              performed by such grantee.

         b.   Any contract to alienate the Site shall require the grantee to
              allow and provide access for the implementation, continuation and
              oversight of all activities and obligations pursuant to this ACO.
              C.P. Chemicals' obligations under this ACO shall continue unless
              the grantee agrees to assume C.P. Chemicals' obligations and
              unless the Department in its sole discretion agrees to permit the
              grantee to assume the obligations of C.P. Chemicals.

         c.   Any deed, title or other instrument of conveyance regarding the
              Site shall contain a notice that the Site is the subject of this
              ACO. Any such deed, title or other instrument of conveyance shall
              be subject to the requirements set forth in paragraph 108 below
              regarding the use of the Site and deed restrictions.

         d.   Nothing herein shall relieve C.P. Chemicals of the obligation to
              comply with all applicable statutes and rules relating to the
              alienation of the Site.

108.     C.P. Chemicals agrees not to make any use of the Site or take any
         actions inconsistent with this ACO. C.P. Chemicals agrees to impose
         such reasonable use and/or access restrictions regarding the Site as
         may be deemed necessary. The use and access restrictions shall run with
         the land, shall be for the benefit of and enforceable by the Department
         and the citizens of the State of New Jersey and shall provide actual
         and constructive notice of such restrictions to any subsequent grantee.
         C.P. Chemicals shall record the restrictions with the Middlesex County
         Clerk immediately upon request of the Department that C.F. Chemicals do
         so.

109.     The requirements of this ACO shall be deemed satisfied upon the receipt
         by C.P. Chemicals of written notice from the Department that C.P.
         Chemicals has demonstrated, to the satisfaction of the Department, that
         the obligations imposed by this ACO have been completed by C.P.
         Chemicals. Upon satisfaction of the terms of this ACO, all obligations
         and provisions contained therein shall cease and shall not survive the
         receipt by C.P. Chemicals of written notice from the Department, unless
         otherwise expressly indicated.

110.     C.P. Chemicals shall submit to the Department, along with the executed
         original ACO, the appropriate documentary evidence (such as a corporate
         resolution) that the signatory for C.P. Chemicals has the authority to
         bind C.P. Chemicals to the terms of this ACO.

111.     In the event that the day on which a submission is due falls on a
         weekend or holiday, the due date will be on the next business day.

                                       34

<PAGE>

112.     This Administrative Consent Order shall become effective upon the
         execution by all parties.

                                DEPARTMENT OF ENVIRONMENTAL PROTECTION

Date: 3/8/96                    By: /s/ Dennis Hart
     ----------------------         ------------------------------------------
                                    Dennis Hart, Acting Assistant Director
                                    Responsible Party Cleanup Element
                                    Division of Hazardous Waste Management

Date: 3/7/91                    By: /s/ James K. Hamilton
     ----------------------         ------------------------------------------
                                    James K. Hamilton, Assistant Director
                                    Enforcement Element
                                    Division of Water Resources

                                    Robert J. Del Tufo
                                    Attorney General of New Jersey
                                    Attorney for the State of New Jersey
                                    Department of Environmental Protection

Date: 3/11/91                   By: /s/ Craig S. Provorny
     ----------------------         ------------------------------------------
                                    Craig S. Provorny
                                    Deputy Attorney General

                                C.P. Chemicals Incorporated

Date: 3/7/91                    By: /s/ Jack C. Bendheim
     ----------------------         ------------------------------------------
                                    Name: Jack C. Bendheim
                                    Title:   Chairman

                                       35

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