Document:

EXHIBIT 10.16

                           WAIVER AND AMENDMENT NO. 3

                                       TO

                           LOAN AND SECURITY AGREEMENT

      THIS WAIVER AND AMENDMENT NO. 3 ("Amendment") is entered into as of March
17, 2000, by and between MPD TECHNOLOGIES, INC., a New York corporation
("Borrower") having its principal place of business at 49 Wireless Boulevard,
Hauppauge, New York and IBJ WHITEHALL BUSINESS CREDIT CORPORATION (formerly
known as IBJ Schroder Business Credit Corporation) ("IBJ") having its principal
place of business at One State Street, New York, New York and each of the other
financial institutions named in or which hereafter become a party to the Loan
Agreement (as defined below) (IBJ and such other financial institutions, the
"Lenders") and IBJ as agent for the Lenders (IBJ in such capacity, the "Agent").

                                   BACKGROUND

      Borrower, Agent and Lenders are parties to a Loan and Security Agreement
dated as of February 13, 1997 (as amended, supplemented or otherwise modified
from time to time, the "Loan Agreement") pursuant to which Lenders provided
Borrower with certain financial accommodations.

      Borrower has requested that Lenders and Agent amend the Loan Agreement to,
among other things, (a) waive certain Events of Default and (b) amend certain
financial covenants, and Agent and Lenders are willing to do so on the terms and
conditions hereafter set forth.

      NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretofore or hereafter made to or for the account of Borrower by Agent and
Lenders, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

      1. Definitions. All capitalized terms not otherwise defined herein shall
have the meanings given to them in the Loan Agreement.

      2. Amendment to Loan Agreement. Subject to satisfaction of the conditions
precedent set forth in Section 4 below, the Loan Agreement is hereby amended as
follows:

      2.1. Section 1.2 of the Loan Agreement is hereby amended by inserting the
following defined terms in their appropriate alphabetical order:

            Amendment No. 3 - means Waiver and Amendment No. 3 to Loan and
            Security Agreement dated as of the Amendment No. 3 Effective Date
            among Borrower, Lenders and Agent.

            Amendment No. 3 Effective Date - means March 17, 2000.

            Maximum Additional Capex Amount - Two Million Two Hundred Sixty-Six

<PAGE>

            Thousand and 00/100 ($2,266,000), less principal payments of the
            Additional Capex Loans.

      2.2 Section 1.2 of the Loan Agreement is hereby amended by amending the
defined terms "Fixed Charge Coverage" and "Permitted Purchase Money
Indebtedness" in their entirety to provide as follows:

            "Fixed Charge Coverage - with respect to a particular period, the
            ratio of (a) EBITDA for such period minus non-financed Capital
            Expenditures during such period to (b) the sum of all amounts paid
            during such period with respect to (i) federal, state and local
            taxes, (ii) scheduled principal payments, (iii) interest on
            Indebtedness for borrowed money and (iv) Capitalized Lease
            Obligations."

            "Permitted Purchase Money Indebtedness - Purchase Money Indebtedness
            of Borrower incurred after the date hereof which is secured by a
            Purchase Money Lien and which, when aggregated with the principal
            amount of all other such Indebtedness and Capitalized Lease
            Obligations of Borrower at the time outstanding, does not exceed
            either (a) $2,500,000 in any fiscal year or (b) $5,000,000 in the
            aggregate during the Original Term. For the purposes of this
            definition, (i) the principal amount of any Purchase Money
            Indebtedness consisting of capitalized leases shall be computed as a
            Capitalized Lease Obligation, (ii) any renewals, extensions or
            refinancings of Purchase Money Indebtedness shall not be computed in
            the limitation set forth above and (iii) Indebtedness owing to Agent
            and Lenders under this Agreement shall not be computed in the
            limitations set forth above."

      2.3. Section 2.3 of the Loan Agreement is hereby amended by inserting a
new subsection "(D)" at the end thereof as follows:

                  "(D) Anything in Section 2.3(c) to the contrary
            notwithstanding, from and after the Amendment No. 3 Effective Date,
            (i) the maximum amount of new Additional Capex Loans shall be
            limited to $1,000,000, (ii) subject to the terms and conditions set
            forth in this Agreement including, without limitation, Sections 10.2
            and 10.4 hereof, Additional Capex Loans may be borrowed up to and
            including December 31, 2000."

      2.4. Section 3.1(A) of the Loan Agreement is hereby amended by (i)
deleting the reference in clause (a) to "Alternate Base Rate plus one-quarter of
one percent (.25%)" and inserting "Alternate Base Rate plus three-quarters of
one percent (.75%)" in its place and stead, (ii) deleting the reference in
clause (b) to "Alternate Base Rate" and inserting "Alternate Base Rate plus
one-half of one percent (.50%)" in its place and stead, and (iii) deleting the
last paragraph of Section 3.1(A).

      2.5. Section 3.3(C) of the Loan Agreement is hereby amended in its
entirety to provide as follows:

                  "(C) At the effective date of any such termination by Borrower
            (the "Prepayment Date"), Borrower shall pay to Agent (in addition to
            the then outstanding principal, accrued interest and other charges
            owing under the terms of

                                       2
<PAGE>

            this Agreement and any of the other Loan Documents), as liquidated
            damages for the loss of the bargain and not as a penalty, an amount
            equal to (x) one percent (1%) of the Maximum Revolving Amount plus
            the Maximum Capex Amount plus the Maximum Additional Capex Amount
            plus the outstanding principal balance of the Term Loan if the
            Prepayment Date occurs from the Amendment No. 3 Effective Date to
            and including the date immediately preceding the first anniversary
            of the Amendment No. 3 Effective Date, and (y) one-half of one
            percent (.50%) of the Maximum Revolving Amount plus the Maximum
            Capex Amount plus the Maximum Additional Capex Amount plus the
            outstanding principal balance of the Term Loan if the Prepayment
            Date occurs on or after the first anniversary of the Amendment No. 3
            Effective Date to and including February 11, 2002."

      2.6. Section 9.3 of the Loan Agreement is hereby amended in its entirety
to provide as follows:

                  "9.3 Specific Financial Covenants. Borrower covenants that,
            unless otherwise consented to by Agent in writing, it shall:

                  (a) maintain a Fixed Charge Ratio of not less than (i) (1.70)
            to 1.00 for the three month period ending March 31, 2000, (ii) (.50)
            to 1.00 for the six month period ending June 30, 2000, (iii) .50 to
            1.00 for the nine month period ending September 30, 2000, (iv) 1.00
            to 1.00 for the twelve month period ending December 31, 2000, (v)
            1.10 to 1.00 for the twelve month period ending March 31, 2001 and
            as at the end of each fiscal quarter thereafter for the twelve month
            period then ended.

                  (b) until it has maintained a Fixed Charge Ratio of not less
            than 1.10 to 1.00 as at the end of any fiscal quarter for the twelve
            month period then ended commencing with the fiscal quarter ending
            December 31, 2000, maintain an Excess Availability at all times of
            not less than $900,000."

      2.7. Section 10.4 of the Loan Agreement is hereby amended to include the
following new clause (d) at the end thereof:

                  "(d) and Borrower shall have been in compliance with Section
            9.3(b) of the Loan Agreement at all times since the Amendment No. 3
            Effective Date."

      2.8. Section 11.1 of the Loan Agreement is hereby amended to include the
following new clause (S) at the end thereof:

                  (S) Borrower shall fail to provide Agent with an appraisal of
            Equipment from Daley-Hodkin Corporation (i) on or before May 15,
            2000, and (ii) which sets forth an orderly liquidation value of
            Equipment of at least $4,800,000.

      3. Waiver. Subject to the satisfaction of the conditions precedent set
forth in Section 5 below, Agent and Lenders hereby waive the requirement that
Borrower maintain a Fixed Charge Ratio of not less than 1.00 to 1.00 for the
twelve month period ended December 31, 1999.

                                       3
<PAGE>

      4. Credit Limit. The maximum credit limit for SAMM for purposes of clause
(xiii) of the defined term "Eligible Account" shall be $3,529,412.

      5. Conditions of Effectiveness. This Amendment shall become effective upon
satisfaction of the following conditions precedent: Agent shall have received
(i) four (4) copies of this Amendment executed by Borrower and consented and
agreed to by Microwave Power Devices, Inc., as guarantor, (ii) an amendment fee
equal to $50,000, (iii) evidence in the form of corporate resolutions
demonstrating that Borrower shall have taken all necessary corporate action for
the authorization, execution, delivery and performance of this amendment, (iv) a
Second Amended and Restated Revolving Credit Note to replace the original Second
Amended and Restated Revolving Credit Note which, if delivered to Agent, is no
longer in Agent's possession, (v) an Amended and Restated Additional Capex Note
reflecting the new Maximum Additional Capex Amount, (vi) UCC-1 Financing
Statements to be filed in all necessary jurisdictions to perfect Agent's lien in
Inventory kept at Lucent Technology locations in Ohio and New Jersey and (vii)
such other certificates (including an updated Incumbency Certificate),
instruments, documents, agreements and opinions of counsel as may be required by
Agent or its counsel, each of which shall be in form and substance satisfactory
to Agent and its counsel.

      6. Representations and Warranties. Borrower hereby represents and warrants
as follows:

                  (a) This Amendment and the Loan Agreement, as amended hereby,
            constitute legal, valid and binding obligations of Borrower and are
            enforceable against Borrower in accordance with their respective
            terms.

                  (b) Upon the effectiveness of this Amendment, Borrower hereby
            reaffirms all covenants, representations and warranties made in the
            Loan Agreement to the extent the same are not amended hereby and
            agree that all such covenants, representations and warranties shall
            be deemed to have been remade as of the effective date of this
            Amendment.

                  (c) No Event of Default or Default has occurred and is
            continuing or would exist after giving effect to this Amendment.

                  (d) Borrower has no defense, counterclaim or offset with
            respect to the Loan Agreement.

      7. Effect on the Loan Agreement.

            (a) Upon the effectiveness of this Amendment, each reference in the
Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of
like import shall mean and be a reference to the Loan Agreement as amended
hereby.

            (b) Except as specifically amended herein, the Loan Agreement, and
all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.

            (c) Except as specifically provided in Section 3 hereof, the
execution, delivery

                                       4
<PAGE>

and effectiveness of this Amendment shall not operate as a waiver of any right,
power or remedy of Agent, nor constitute a waiver of any provision of the Loan
Agreement, or any other documents, instruments or agreements executed and/or
delivered under or in connection therewith.

      8. Governing Law. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.

      9. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.

      10. Counterparts; Telecopied Signatures. This Amendment may be executed in
any number of and by different parties hereto on separate counterparts, all of
which, when so executed, shall be deemed an original, but all such counterparts
shall constitute one and the same agreement. Any signature delivered by a party
by facsimile transmission shall be deemed to be an original signature hereto.

                                       5
<PAGE>

            IN WITNESS WHEREOF, this Amendment has been duly executed as of the
day and year first written above.

                                            MPD TECHNOLOGIES, INC.

                                            By: /s/ A. Weber
                                                --------------------------------
                                            Name: A. Weber
                                            Title: Chairman, President/CEO

                                            IBJ WHITEHALL BUSINESS CREDIT
                                            CORPORATION, as Agent and a Lender

                                            By: /s/ Joseph J. Zautra
                                                --------------------------------
                                            Name: Joseph J. Zautra
                                            Title: Vice President

CONSENTED AND AGREED TO:

MICROWAVE POWER DEVICES, INC.

By: /s/ A. Weber
   ---------------------------
Name: A. Weber
Title: Chairman, President/CEO

                                       6
<PAGE>

                           SECOND AMENDED AND RESTATED
                              REVOLVING CREDIT NOTE

$13,750,000.00                                                New York, New York
                                                              as of May 19, 1999

            This Second Amended and Restated Revolving Credit Note is executed
and delivered under and pursuant to the terms of that certain Loan and Security
Agreement dated as of February 13, 1997 (as the same has been and may be further
amended, supplemented or modified from time to time, the "Loan Agreement") by
and among MPD TECHNOLOGIES, INC., a New York corporation having its chief
executive office at 49 Wireless Boulevard, Hauppauge, New York 11788
("Borrower"), IBJ WHITEHALL BUSINESS CREDIT CORPORATION (formerly known as IBJ
Schroder Business Credit Corporation) ("IBJ"), each of the other financial
institutions named in or which hereafter become parties to the Loan Agreement
(IBJ and such other financial institutions, the "Lenders") and IBJ as agent for
the Lenders (IBJ in such capacity, "Agent"). Capitalized terms not otherwise
defined herein shall have the meanings as provided in the Loan Agreement.

            FOR VALUE RECEIVED, Borrower hereby promises to pay to the order of
Agent for the ratable benefit of Lenders at Agent's offices located at One State
Street, New York, New York 10004 or at such other place as Agent may from time
to time designate in writing to Borrower:

            (i) the principal sum of THIRTEEN MILLION SEVEN HUNDRED FIFTY
THOUSAND AND 00/100 DOLLARS ($13,750,000.00) or, if different from such amount,
such amount of Revolving Advances as may be due and owing under the Loan
Agreement, payable in accordance with the provisions of the Loan Agreement and
subject to acceleration upon the occurrence of an Event of Default under the
Loan Agreement, earlier termination of the Loan Agreement or earlier prepayment
as required pursuant to the terms thereof; and

            (ii) interest on the principal amount of this Note from time to time
outstanding until such principal amount is paid in full, at such interest rates
and at such times as are provided in the Loan Agreement. Upon and after the
occurrence of an Event of Default, and during the continuation thereof, interest
shall be payable at the Default Rate. In no event, however, shall interest
hereunder exceed the maximum interest rate permitted by law.

            This Second Amended and Restated Revolving Credit Note amends and
restates in its entirety and is given in substitution for, but not in
satisfaction of, that certain Amended and Restated Revolving Credit Note dated
as of February 13, 1998 issued by Borrower in favor of Agent for the ratable
benefit of Lenders in the original principal amount of $12,000,000 and replaces
an identical Second Amended and Restated Revolving Credit Note which Agent
cannot locate in its files.

            This Note is the Revolving Credit Note referred to in the Loan
Agreement and is secured, inter alia, by the liens granted pursuant to the Loan
Agreement and the Other Agreements, is entitled to the benefits of the Loan
Agreement and the Other Agreements and is subject to all of the agreements,
terms and conditions therein contained.

                                       7
<PAGE>

            This Note is subject to mandatory prepayment and may be voluntarily
prepaid, in whole or in part, on the terms and conditions set forth in the Loan
Agreement.

            If an Event of Default under Sections 11.1(J) or 11.1(K) of the Loan
Agreement shall occur, then this Note shall immediately become due and payable,
without notice, together with reasonable attorneys' fees if the collection
hereof is placed in the hands of an attorney to obtain or enforce payment
hereof. If any other Event of Default shall occur under the Loan Agreement or
any of the Other Agreements which is not cured within any applicable grace
period, then this Note may, as provided in the Loan Agreement, be declared to be
immediately due and payable, without notice, together with reasonable attorneys'
fees, if the collection hereof is placed in the hands of an attorney to obtain
or enforce payment hereof.

            This Note is being delivered in the State of New York, and shall be
construed and enforced in accordance with the laws of such State.

            Borrower expressly waives any presentment, demand, protest, notice
of protest, or notice of any kind except as expressly provided in the Loan
Agreement.

                                    MPD TECHNOLOGIES, INC.

                                    By: /s/ A. Weber
                                        ----------------------------------------
                                    Name:  A. Weber
                                    Title: Chairman, President/CEO

STATE OF NEW YORK          )
                           :  ss.:
SUFFOLK COUNTY OF NEW YORK )

            On the 17 day of March, 2000, before me personally came A. Weber, to
me known, who being by me duly sworn, did depose and say that he is the
Chairman, President/CEO of MPD Technologies, Inc., the corporation described in
and which executed the foregoing instrument; and that he was authorized to sign
his name thereto.

                                    /s/ Concetta Ombrellino
                                    --------------------------------------------
                                           Notary Public

                                           CONCETTA OMBRELLINO
                                           Notary Public, State of New York
                                           Suffolk County No. 01OM6015966
                                           Commission Expires November 09, 2000

                                       8
<PAGE>

                              AMENDED AND RESTATED
                              ADDITIONAL CAPEX NOTE

$2,266,000.00                                                 New York, New York
                                                            as of March 17, 2000

            This Amended and Restated Additional Capex Note is executed and
delivered under and pursuant to the terms of that certain Loan and Security
Agreement dated as of February 13, 1997 (as the same has been and may be further
amended, supplemented or modified from time to time, the "Loan Agreement") by
and among MPD TECHNOLOGIES, INC., a New York corporation having its chief
executive office at 49 Wireless Boulevard, Hauppauge, New York 11788
("Borrower"), IBJ WHITEHALL BUSINESS CREDIT CORPORATION (formerly known as IBJ
Schroder Business Credit Corporation) ("IBJ"), each of the other financial
institutions named in or which hereafter become parties to the Loan Agreement
(IBJ and such other financial institutions, the "Lenders") and IBJ as agent for
the Lenders (IBJ in such capacity, "Agent"). Capitalized terms not otherwise
defined herein shall have the meanings as provided in the Loan Agreement.

            FOR VALUE RECEIVED, Borrower hereby promises to pay to the order of
Agent for the ratable benefit of Lenders at Agent's offices located at One State
Street, New York, New York 10004 or at such other place as Agent may from time
to time designate to Borrower in writing:

            (i) the principal sum of TWO MILLION TWO HUNDRED SIXTY-SIX THOUSAND
AND 00/100 DOLLARS ($2,266,000.00) or such lesser amount as shall be advanced by
Lender on or before December 31, 2000, payable in consecutive monthly
installments each in an amount equal to the applicable monthly payment on
Additional Capex Loans as set forth in the Loan Agreement, subject to
acceleration upon the occurrence of an Event of Default under the Loan
Agreement, earlier termination of the Loan Agreement or earlier prepayment as
required pursuant to the terms of the Loan Agreement; and

            (ii) interest on the principal amount of this Note from time to time
outstanding until such principal amount is paid in full, at such interest rates
and at such times as are provided in the Loan Agreement. Upon and after the
occurrence of an Event of Default, and during the continuation thereof, interest
shall be payable at the Default Rate. In no event, however, shall interest
hereunder exceed the maximum interest rate permitted by law.

            This Amended and Restated Additional Capex Note amends and restates
in its entirety and is given in substitution for, but not in satisfaction of,
that certain Additional Capex Note dated as of May 19, 1999 issued by Borrower
in favor of Agent for the ratable benefit of Lenders in the original principal
amount of $3,000,000.

            This Note is the Additional Capex Note referred to in the Loan
Agreement and is secured, inter alia, by the liens granted pursuant to the Loan
Agreement and the Other Agreements, is entitled to the benefits of the Loan
Agreement and the Other Agreements and is subject to all of the agreements,
terms and conditions therein contained.

                                       9
<PAGE>

            This Note is subject to mandatory prepayment and may be voluntarily
prepaid, in whole or in part, on the terms and conditions set forth in the Loan
Agreement.

            If an Event of Default under Sections 11.1(J) or 11.1(K) of the Loan
Agreement shall occur, then this Note shall immediately become due and payable,
without notice, together with reasonable attorneys' fees if the collection
hereof is placed in the hands of an attorney to obtain or enforce payment
hereof. If any other Event of Default shall occur under the Loan Agreement or
any of the Other Agreements, which is not cured within any applicable grace
period, then this Note may, as provided in the Loan Agreement, be declared to be
immediately due and payable, without notice, together with reasonable attorneys'
fees, if the collection hereof is placed in the hands of an attorney to obtain
or enforce payment hereof.

            This Note is being delivered in the State of New York, and shall be
construed and enforced in accordance with the laws of such State.

            Borrower expressly waives any presentment, demand, protest, notice
of protest, or notice of any kind except as expressly provided in the Loan
Agreement.

                                   MPD TECHNOLOGIES, INC.

                                   By: /s/ A. Weber
                                       -----------------------------------------
                                   Name: A. Weber
                                   Title: Chairman, President/CEO

STATE OF NEW YORK          )
                           :  ss.:
SUFFOLK COUNTY OF NEW YORK )

            On the 17 day of March, 2000, before me personally came A. Weber, to
me known, who being by me duly sworn, did depose and say that he is the
Chairman, President/CEO of MPD Technologies, Inc., the corporation described in
and which executed the foregoing instrument; and that he signed his name thereto
by order of the board of directors of said corporation.

                                   /s/ Concetta Ombrellino
                                   ---------------------------------------------
                                            Notary Public

                                            CONCETTA OMBRELLINO
                                            Notary Public, State of New York
                                            Suffolk County No. 01OM6015966
                                            Commission Expires November 09, 2000

                                       10Exhibit 10(k)

                            INDEMNIFICATION AGREEMENT

      This Agreement made and entered into effective the ____day of _____, ____,
by and between CHEMFIRST INC., a Mississippi corporation, (hereinafter "the
COMPANY"), and ___________________________, (hereinafter "the INDEMNITEE").

      WHEREAS, competent and experienced persons are becoming more reluctant to
serve as directors or officers of publicly-held corporations, or as directors or
officers of their subsidiaries or affiliates, unless they are provided with
adequate protection against claims asserted against them for their activities on
behalf of such corporations, generally through insurance and indemnification;
and

      WHEREAS, uncertainty in the interpretation of statutes, regulations, case
law and public policies relating to indemnification of corporate directors and
officers makes difficult an adequate and reliable assessment of the risks to
which such directors and officers may be exposed particularly in light of the
proliferation of lawsuits against directors and officers; and

      WHEREAS, the Board of Directors of the COMPANY, based upon its business
experience, has concluded that the continuation of present trends in litigation
against corporate directors and officers inevitably makes it more difficult for
the COMPANY to attract and retain directors and officers of the highest degree
of competence committed to the active and effective direction and supervision of
the business of the COMPANY, its subsidiaries, or affiliates, and the Board
deems such consequences to be so detrimental to the best interests of the
COMPANY's stockholders that it has concluded that the COMPANY should act to
provide its directors, officers and certain officers of its subsidiaries with
enhanced protection against inordinate risks attendant with their positions to
assure that the most capable persons otherwise available will be attracted to
such positions and, in such connection, said Board of Directors has further
concluded that it is reasonable, prudent and necessary for the COMPANY to
obligate itself contractually to indemnify its directors, officers, and certain
officers of its subsidiaries to the maximum extent permitted by applicable law,
for expenses and liabilities that might be incurred by such directors and
officers in connection with claims lodged against them for their decisions and
actions as directors or officers; and

      WHEREAS, the Mississippi Business Corporation Act authorizes a corporation
to indemnify any director or officer or former director or officer or any person
who may have served at its request as a director or officer in another
corporation in which it owns shares of capital stock against expenses actually
and reasonably incurred by him in connection with any defense of any action,
suit or proceeding, civil, criminal, administrative, arbitrative or
investigative, in which he is made a party by reason of having been such a
director or officer, with certain exceptions set forth therein; and

<PAGE>

      WHEREAS, the Mississippi Business Corporation Act also authorizes the
corporation to obligate itself in advance to provide indemnification to the
fullest extent permitted by law by a provision in its Articles of Incorporation
or by any Bylaw or resolution adopted or contract approved by its Board of
Directors or by its stockholders after notice; and

      WHEREAS, Article XI of the COMPANY's Amended and Restated Articles of
Incorporation limits certain personal liabilities of directors, and further,
Article VII "Indemnification" of the COMPANY's Bylaws provide for indemnifying
directors, officers and employees (such provisions attached hereto as Exhibit A
(hereinafter, the "Indemnification Policy")); and

      WHEREAS, the COMPANY desires INDEMNITEE to serve or continue to serve as a
director or officer of the COMPANY or as a director or officer of a subsidiary,
of which he has been or is serving, or will serve, at the request of the
COMPANY, free from undue concern for unpredictable, inappropriate or
unreasonable claims for damages by reason of his being a director or officer of
the COMPANY or of a subsidiary; and

      WHEREAS, INDEMNITEE is willing to serve, or to continue to serve, or to
take on additional service for, the COMPANY or its subsidiaries in such
capacities if he be indemnified as provided for herein;

      NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the COMPANY and INDEMNITEE do hereby covenant and agree that
the INDEMNITEE shall be indemnified to the fullest extent permitted by
applicable law and the Indemnification Policy as follows:

      1.    Agreement to Serve. INDEMNITEE will serve and continue to serve at
            the will of the COMPANY as a director or officer of the COMPANY or
            any other company, partnership, joint venture, trust, employee
            benefit plan at the request of the COMPANY, faithfully and to the
            best of his ability so long as he is duly elected and qualified in
            accordance with the provisions of the Bylaws; provided that
            INDEMNITEE may at any time and for any reason resign from such
            position (subject to any contractual obligations which INDEMNITEE
            shall have assumed apart from this Agreement) and provided further
            that the COMPANY shall have no obligation to continue the INDEMNITEE
            in any such position.

      2.    Indemnification.

                  (a) The COMPANY shall, as promptly as practicable, indemnify
            to the fullest extent permitted by applicable law the INDEMNITEE as
            a director or officer of the COMPANY or any other company,
            partnership, joint venture, trust, employee benefit plan or other
            enterprise for which INDEMNITEE is or was serving at the request of
            the COMPANY, against any and all liabilities, expenses (including
            attorney's fees), judgments,

                                       2
<PAGE>

            fines, penalties and amounts paid in settlement (including all
            interest, assessments and other charges paid or payable in
            connection with the foregoing), that may actually and reasonably be
            incurred by the INDEMNITEE in connection with or resulting from or
            arising out of any claim, action, suit or proceeding (actual or
            threatened), in which the INDEMNITEE may be involved as a party or
            otherwise, by reason of serving in his capacity as a director or
            officer whether before or after adoption of this Agreement provided
            that such INDEMNITEE (i) in the case of a former or present director
            (A) is wholly successful, on the merits or otherwise, with respect
            thereto, or (B) acted in good faith and, in the case of conduct in
            his official capacity with the COMPANY, in a manner that such
            INDEMNITEE reasonably believed to be in the best interests of the
            COMPANY, or, in all other cases, not opposed to, the best interests
            of the COMPANY, and, with respect to any criminal action or
            proceeding, had no reasonable cause to believe that such conduct was
            unlawful or (ii) in the case of a former or present officer who is
            not also a director or is also a director but is involved in the
            proceeding only in his capacity as an officer, (A) meets the
            standards of clause (i)(A) or (B) above and (B) has not been found
            liable for (I) receipt of a financial benefit to which he is not
            entitled, (II) an intentional infliction of harm on the COMPANY or
            its shareholders, or (III) an intentional violation of criminal law.
            The termination of any action, suit or proceeding by judgment,
            order, settlement, conviction, or upon a plea of nolo contendere or
            its equivalent, shall not, in itself, create a presumption that the
            INDEMNITEE did not meet the standard of conduct described above.

                  (b) With respect to any completed action or suit by or in the
            right of the COMPANY to procure a judgment in its favor, any
            INDEMNITEE otherwise entitled to indemnification shall not be
            entitled to indemnification, except for reasonable expenses incurred
            in connection with the proceeding if it is determined in accordance
            with Paragraphs 2(d), 2(e) or 2(h), as applicable, that the
            INDEMNITEE has met the relevant standard of conduct in Paragraph
            (a), unless and only to the extent that the court in which the
            action or suit was brought, or another court of competent
            jurisdiction, shall determine upon application that either the
            INDEMNITEE is entitled to indemnification or an advance of expenses
            pursuant to applicable law or, in view of all circumstances of the
            case, such INDEMNITEE is fairly and reasonably entitled to indemnity
            for such liabilities and expenses which such court shall deem to be
            proper.

                  (c) To the extent that the INDEMNITEE has been successful on
            the merits or otherwise in the defense of any action, suit or
            proceeding, or any claim, issue or matter therein, such INDEMNITEE
            shall be indemnified against expenses (including attorneys' fees)
            actually and reasonably incurred by such person in connection
            therewith.

                                       3
<PAGE>

                  (d) Indemnification hereunder shall be made by the COMPANY
            only after a determination that it is proper in the circumstances
            because the INDEMNITEE met the applicable standard of conduct in
            Paragraph (a) above. That determination, subject to Paragraphs 2(e)
            and 2(h) below, shall be made (i) by the Board of Directors by a
            majority vote of a quorum consisting of directors not at the time
            parties to or otherwise a subject of the proceeding or having a
            familial, financial, professional or employment relationship with
            the director whose indemnification or advance for expenses is the
            subject of the decision being made, which relationship would, in the
            circumstances, reasonably be expected to exert an influence on the
            director's judgment when voting on the decision being made (each
            such director meeting the foregoing criteria, a "Disinterested
            Director"), or by a duly authorized committee thereof consisting of
            two or more Disinterested Directors, (ii) by special legal counsel
            selected in the manner prescribed in clause (i) or if such counsel
            cannot be so selected, by special counsel selected by a majority
            vote of the entire Board of Directors, or (iii) by the stockholders,
            but shares owned by or voted under the control of directors who at
            the time do not qualify as a Disinterested Director, may not be
            voted in the determination.

                  (e) The COMPANY agrees that if there is a Change in Control
            (as defined below) of the COMPANY then with respect to all matters
            thereafter arising concerning the rights of the INDEMNITEE to
            indemnity payments, including the advancement of expenses, under
            this Agreement or any other agreement or COMPANY Bylaws now or
            hereafter in effect, the COMPANY shall seek legal advice only from
            independent legal counsel selected by INDEMNITEE and approved by the
            COMPANY (which approval shall not be unreasonably withheld). Such
            counsel, among other things, shall render its written opinion to the
            COMPANY and INDEMNITEE as to whether and to what extent the
            INDEMNITEE would be permitted to be indemnified under applicable
            law. The COMPANY agrees to pay the reasonable fees and expenses of
            the independent legal counsel referred to above and to indemnify
            fully such counsel against any and all expenses (including
            attorneys' fees), claims, liabilities and damages arising out of or
            relating to this Agreement or its engagement pursuant hereto. A
            "Change in Control" shall be deemed to have occurred if (i) any
            "person" (as such term is used in Sections 13(d) and 14(d) of the
            Securities Exchange Act of 1934, as amended), other than a trustee
            or other fiduciary holding securities under an employee benefit plan
            of the COMPANY or a corporation owned directly or indirectly by the
            stockholders of the COMPANY in substantially the same proportions as
            their ownership of stock of the COMPANY, is or becomes the
            "beneficial owner" (as defined in Rule 13d-3 under said Act),
            directly or indirectly, of securities of the COMPANY representing
            45% or more of the total voting power represented by the COMPANY's
            then outstanding securities which vote generally in the election of
            directors (the "Voting Securities"), (ii)

                                       4
<PAGE>

            during any period of two consecutive years, individuals who at the
            beginning of such period constitute the Board of Directors of the
            COMPANY and any new director whose election by the Board of
            Directors or nomination for election by the COMPANY's stockholders
            was approved by a vote of at least two-thirds (2/3) of the directors
            then still in office who either were directors at the beginning of
            the period or whose election or nomination for election was
            previously so approved, cease for any reason to constitute a
            majority thereof, or (iii) the stockholders of the COMPANY approve a
            merger or consolidation of the COMPANY with any other corporation,
            other than a merger or consolidation which would result in the
            Voting Securities of the COMPANY outstanding immediately prior
            thereto continuing to represent (either by remaining outstanding or
            by being converted into Voting Securities of the surviving entity)
            at least 50% of the total voting power represented by the Voting
            Securities of the COMPANY or such surviving entity outstanding
            immediately after such merger or consolidation, or the stockholders
            of the COMPANY approve a plan of complete liquidation of the COMPANY
            or an agreement for the sale or disposition by the COMPANY of (in
            one transaction or a series of transactions) all or substantially
            all the COMPANY's assets.

                  (f) The INDEMNITEE seeking indemnity hereunder must promptly
            notify the Board of Directors of the COMPANY of all relevant facts
            after becoming aware of a claim or potential claim, and except in
            the case of a claim by or on behalf of the COMPANY, must permit the
            COMPANY, at its option, to participate in and jointly control the
            defense of such claim and any resulting suit or action.

                  (g) Expenses incurred in connection with any claim, action,
            suit or proceeding, actual or threatened, other than a direct action
            by the COMPANY against the INDEMNITEE (1) may, prior to a Change in
            Control, be paid by the COMPANY in advance of the final disposition
            of such claim, action, suit or proceeding if authorized by (i) the
            Board of Directors by a majority vote of a quorum consisting of
            Disinterested Directors or by a duly authorized committee thereof
            consisting of two or more Disinterested Directors, (ii) special
            legal counsel selected in the manner prescribed in (i) above or if
            such counsel cannot be so selected, by special counsel selected by a
            majority vote of the entire Board of Directors or (iii) by the
            stockholders, but shares owned by or voted under the control of
            directors who at the time do not qualify as a Disinterested Director
            may not be voted on the determination and upon receipt of (i) a
            written affirmation by the INDEMNITEE of his good faith belief that
            he has met the relevant standard of conduct described in Paragraph
            2(a) above or that the proceeding involves conduct for which
            liability has been eliminated under a provision of the COMPANY's
            Amended and Restated Articles of Incorporation and (ii) a written
            undertaking by or on behalf of the

                                       5
<PAGE>

            INDEMNITEE to repay such amount if he is not wholly successful on
            the merits or otherwise in his defense which would entitle him to
            mandatory indemnification under Paragraph 2(c) hereof and unless it
            shall ultimately be determined in accordance with Paragraphs 2(d) or
            2(h) that INDEMNITEE has not met the applicable standard of conduct
            described in Paragraph 2(a) hereof or (2) shall, after a Change in
            Control, be paid by the COMPANY in advance of the final disposition
            of such claim, action, suit or proceeding upon receipt of (i) a
            written affirmation by the INDEMNITEE of his good faith belief that
            he has met the relevant standard of conduct described in Paragraph
            2(a) above or that the proceeding involves conduct for which
            liability has been eliminated under a provision of the COMPANY's
            Amended and Restated Articles of Incorporation and (ii) a written
            undertaking by or on behalf of the INDEMNITEE to repay such amounts
            if he is not wholly successful on the merits or otherwise in his
            defense which would entitle him to mandatory indemnification under
            Paragraph 2(c) hereof and unless it shall ultimately be determinated
            in accordance with Paragraphs 2(e) or 2(h) that INDEMNITEE has not
            met the applicable standard of conduct described in Paragraph 2(a)
            hereof.

                  (h) The applicable party reviewing the claim for
            indemnification pursuant to Paragraph 2(d)(i), (ii) or (iii) or,
            pursuant to Paragraph 2(e) or pursuant to Paragraph 2(g)(1) shall be
            referred to herein as the "Reviewing Party." Any determination by
            the applicable Reviewing Party that the INDEMNITEE is not (i)
            entitled to an advancement of expenses pursuant to Paragraph 2(g) or
            (ii) entitled to indemnification pursuant to Paragraph 2(d) shall
            not become binding until a final judicial determination is made with
            respect thereto (as to which all rights of appeal therefrom have
            been exhausted or lapsed). If there has been no determination by the
            applicable Reviewing Party or if the Reviewing Party determines that
            the INDEMNITEE substantively would not be permitted to be
            indemnified in whole or in part under applicable law or would not be
            entitled to the advancement of expenses, the INDEMNITEE shall have
            the right to commence litigation in any court in the State of
            Mississippi having subject matter jurisdiction thereof and in which
            venue is proper seeking an initial determination by the court or
            challenging any such determination by the Reviewing Party or any
            aspect thereof, including the legal or factual bases therefor, and
            the COMPANY hereby consents to service of process and to appear in
            any such proceeding.

      3.    Enforcement.

                  (a) The COMPANY expressly confirms and agrees that it has
            entered into this Agreement and assumed the obligations imposed on
            the COMPANY to induce the INDEMNITEE to continue as a director or
            officer of the COMPANY or of any other corporation, company,

                                       6
<PAGE>

            partnership, joint venture, trust, employee benefit plan, or other
            enterprise for which INDEMNITEE was or is serving at the request of
            the COMPANY, and acknowledges that the INDEMNITEE is relying upon
            this Agreement in continuing in such capacity or capacities.

                  (b) The COMPANY shall reimburse the INDEMNITEE for all the
            INDEMNITEE's costs and expenses incurred in connection with
            successfully establishing his right to indemnification under this
            Agreement in whole and in part.

      4.    Exclusivity. The indemnification provided hereunder shall not be
            deemed exclusive of, or diminish or otherwise restrict, any other
            rights to which those indemnified may be entitled under any
            provision of law, the Articles of Incorporation or Bylaws of the
            COMPANY, this Agreement, vote of stockholders or disinterested
            directors or otherwise, both as to action in his official capacity
            and as to action in another capacity referred to in Paragraph 2 of
            this Agreement and shall continue after INDEMNITEE has ceased to
            occupy such position or positions.

      5.    Multiplicity of Claims. If several claims, issues or courses of
            action are involved, the INDEMNITEE may be entitled to
            indemnification as to some matters even though such INDEMNITEE is
            not entitled to indemnification as to other matters.

      6.    Purchase of Insurance. The COMPANY may purchase and maintain
            insurance on behalf of any INDEMNITEE covered hereunder where
            insurance is obtainable, against any liability, or part thereof,
            asserted against such INDEMNITEE and incurred by such INDEMNITEE in
            any capacity or arising out of such INDEMNITEE's status as such,
            whether or not the COMPANY would have the power to indemnify
            INDEMNITEE against such liability hereunder or otherwise.

      7.    Severability. If any of the provisions of this Agreement shall be
            held to be invalid, illegal or unenforceable for any reason
            whatsoever, the validity, legality or enforceability of the
            remaining provisions of this Agreement (including without
            limitation, all portions of any paragraph of this Agreement
            containing any such provision held to be invalid, illegal or
            unenforceable) shall not in anyway be affected or impaired thereby,
            and to the fullest extent possible, the provisions of this Agreement
            (including, without limitation, all portions of any paragraph of
            this Agreement containing such provision to be invalid, illegal or
            unenforceable, that are not themselves invalid, illegal or
            unenforceable) shall be construed so as to give effect the intent
            manifested by the provision held invalid, illegal or unenforceable.

                                       7
<PAGE>

      8.    Binding Effect. This Agreement shall be binding upon the INDEMNITEE
            and the COMPANY, its successors and assigns, (including any
            transferees of all or substantially all of its assets and any
            successor by merger or operation of law), and shall inure to the
            benefit of the INDEMNITEE, his heirs, personal representatives,
            estate or assigns.

      9.    Amendment and Termination. No amendments, modifications,
            terminations or cancellations of this Agreement shall be effective
            unless signed in writing by both the INDEMNITEE and the COMPANY.

      10.   Headings. The headings of the paragraphs of this Agreement are
            inserted for convenience only and shall not be deemed to constitute
            a part of this Agreement or to affect the construction thereof.

      11.   Change in Law. To the extent that a change in the Mississippi
            Business Corporation Act (whether by statute or judicial decision)
            permits greater indemnification by agreement than would be afforded
            currently under the COMPANY's Bylaws and this Agreement, it is the
            intent of the parties hereto that the INDEMNITEE shall enjoy by this
            Agreement the greater benefits so afforded by such change.

      12.   Governing Law. This Agreement shall be governed by and construed and
            enforced in accordance with the laws of the State of Mississippi
            applicable to contracts made and to be performed in such state
            without giving effect to the principles of conflicts of laws.

      13.   Disputes. All claims and controversies arising out of or in
            connection with this Agreement shall be subject to binding
            arbitration by a single arbitrator in accordance with the commercial
            arbitration rules of the American Arbitration Association ("AAA") or
            the existing Rules of Practice and Procedures of the Judicial
            Arbitration and Mediation Services, Inc. ("JAMS"). Any arbitration
            shall occur in Jackson, Mississippi and any judgment on the award
            rendered in such arbitration shall be entered in any state or
            federal court having jurisdiction. The party filing the arbitration
            shall have the right to select either AAA or JAMS.

      14.   Notification. The INDEMNITEE agrees to notify the COMPANY promptly
            in writing upon being served any citation, complaint, indictment or
            other document covered hereunder, either civil or criminal.

      15.   Notices. All notices, requests, demand and other communication
            hereunder shall be in writing and shall be deemed to have been duly
            given if delivered by hand and receipted for by the party to whom
            said notice or other communication shall be directed, or by mail
            certified or registered with postage prepaid on the third business
            day after which so is mailed.

                                       8
<PAGE>

                  If to INDEMNITEE:       ___________________________

                                          ___________________________

                                          ___________________________

                  If to COMPANY:          J. Steve Chustz, General Counsel
                                          ChemFirst Inc.
                                          Post Office Box 1249
                                          Jackson, MS  39215-1249

      IN WITNESS WHEREOF, the parties have caused this Agreement to be entered
into on the day and year first above written.

      CHEMFIRST INC.                            INDEMNITEE

      By:________________________               _______________________

                                       9

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