JLM INDUSTRIES INC, S-1/A, 1997-07-03

JLM INDUSTRIES INC
S-1/A, 1997-07-03
CHEMICALS & ALLIED PRODUCTS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 3, 1997

REGISTRATION STATEMENT NO. 333-27843

================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------

AMENDMENT NO. 1

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
JLM INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
---------------------

<TABLE>
<S> <C> <C>
DELAWARE 5169 06-1163710
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification Number)
organization)
</TABLE>

---------------------
8675 HIDDEN RIVER PARKWAY
TAMPA, FLORIDA 33637
(813) 632-3300
(Address, including zip code, and telephone number including area code, of
Registrant's principal executive offices)
---------------------
JOHN L. MACDONALD, PRESIDENT
JLM INDUSTRIES, INC.
8675 HIDDEN RIVER PARKWAY
TAMPA, FLORIDA 33637
(813) 632-3300
(Name, address, including zip code, and telephone number including area code, of
agent for service)

COPIES OF COMMUNICATIONS TO:

<TABLE>
<C> <C>
RICHARD M. LEISNER, ESQUIRE G. DAVID BRINTON, ESQUIRE
TRENAM, KEMKER, SCHARF, BARKIN ROGERS & WELLS
FRYE, O'NEILL & MULLIS 200 PARK AVENUE
2700 BARNETT PLAZA NEW YORK, NEW YORK 10166-0153
TAMPA, FLORIDA 33601-1102 (212) 878-8000
(813) 223-7474
</TABLE>

---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
---------------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED JULY 3, 1997

2,300,000 SHARES

JLM INDUSTRIES, INC.
JLM LOGO COMMON STOCK
---------------------

Of the 2,300,000 shares of common stock (the "Common Stock") offered
hereby, 2,156,000 shares are being sold by JLM Industries, Inc. ("JLM" or the
"Company"), and 144,000 shares are being sold by the Selling Stockholder (the
"Offering"). The Company will not receive any of the proceeds from the sale of
shares by the Selling Stockholder. See "Principal and Selling Stockholders."

Prior to the Offering, there has been no public market for the Common Stock
of the Company. It is currently anticipated that the initial public offering
price of the Common Stock will be between $12.00 and $14.00 per share. See
"Underwriting" for a discussion of the factors to be considered in determining
the initial public offering price. The Company has applied to have the Common
Stock approved for quotation on the Nasdaq National Market under the symbol
"JLMI".

THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 7.
---------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
=========================================================================================================================
PROCEEDS TO
PRICE TO UNDERWRITING PROCEEDS TO SELLING
PUBLIC(1) DISCOUNT(1) COMPANY(2) STOCKHOLDER
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share.................... $ $ $ $
Total(3)..................... $ $ $ $
========================================================================================================================
</TABLE>

(1) See "Underwriting" for information concerning indemnification of the
Underwriters and for other information.

(2) Before deducting expenses of the Offering payable by the Company estimated
at $600,000.

(3) The Company has granted an option to the Underwriters exercisable within
45-days of the date hereof, to purchase up to 345,000 additional shares of
Common Stock for the purpose of covering over-allotments, if any. If the
Underwriters exercise such option in full, the total Price to Public,
Underwriting Discount, Proceeds to Company and Proceeds to Selling
Stockholder will be $ , $ , $ and $ ,
respectively. See "Underwriting."

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

The shares of Common Stock offered hereby are offered severally by the
Underwriters when, as and if delivered to and accepted by them, subject to their
right to withdraw, cancel or reject orders in whole or in part and subject to
certain other conditions. It is expected that delivery of the certificates
representing the shares of Common Stock will be made against payment on or about
, 1997, at the office of Oppenheimer & Co., Inc.,
Oppenheimer Tower, World Financial Center, New York, NY 10281.
---------------------

OPPENHEIMER & CO., INC. A.G. EDWARDS & SONS, INC.

The date of this Prospectus is , 1997.
<PAGE> 3

[TWO-PAGE MAP OF THE WORLD]

JLM INDUSTRIES, INC

WORLDWIDE SUPPLIER OF COMMODITY CHEMICALS

LEGEND INDICATING HEADQUARTERS, CURRENT OWNED AND JOINT VENTURE
MANUFACTURING FACILITIES, PLANNED JOINT VENTURE MANUFACTURING FACILITY,
TERMINALING FACILITIES, PLANNED JOINT VENTURE TERMINALING FACILITY, SALES
OFFICES.

DISTRIBUTED TO MORE THAN 600 CUSTOMERS WORLDWIDE

[PHOTO OF PHENOL AND ACETONE MANUFACTURING FACILITY, BLUE ISLAND, ILLINOIS]

[PHOTO OF MANUFACTURING JOINT VENTURE, MOUNT VERNON, INDIANA]

[PHOTO OF TERMINALING FACILITY, WILMINGTON, NORTH CAROLINA]

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK. SUCH
TRANSACTIONS MAY INCLUDE THE PURCHASE OF SHARES OF COMMON STOCK FOLLOWING THE
PRICING OF THE OFFERING TO COVER A SYNDICATE SHORT POSITION IN THE COMMON STOCK,
OR FOR THE PURPOSE OF MAINTAINING THE PRICE OF THE COMMON STOCK, AND THE
IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."

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<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements and related notes appearing
elsewhere in this Prospectus. Unless otherwise indicated, all information
presented in this Prospectus (i) assumes an offering price of $13.00 and (ii)
assumes that the Underwriters' over-allotment option will not be exercised.
Unless the context indicates otherwise, all references in this Prospectus to
"JLM" or the "Company" include JLM Industries, Inc. and its consolidated
subsidiaries and references to the "Selling Stockholder" shall mean John L.
Macdonald. All references in this Prospectus to fiscal years are to the
Company's fiscal years ended on December 31.

THE COMPANY

JLM is a leading marketer and distributor of certain commodity chemicals,
principally acetone and phenol. The Company believes it is the second largest
marketer of acetone and the fifth largest marketer of phenol in North America.
JLM is also a global distributor of olefins, principally propylene, as well as a
variety of other commodity and specialty chemicals. In order to provide stable
and reliable sources of supply for its products, the Company (i) maintains
long-established supplier relationships with several major chemical companies,
(ii) manufactures phenol and acetone at its Blue Island Plant and (iii) sources
acetone from its joint venture manufacturing operation. The Company's principal
products are used in the production of adhesives, coatings, forest product
resins, paints, pharmaceuticals, plastics, solvents and synthetic rubbers. The
Company sells its products worldwide to over 600 customers including Ashland
Chemical, Inc., B.F. Goodrich Co., Borden, Inc., Hoechst Celanese Corporation,
E.I. DuPont de Nemours and Company, Eli Lilly & Co., Georgia Pacific
Corporation, ICI Acrylics Inc., Minnesota Mining and Manufacturing Company,
Neste Resins Corporation, Rohm & Haas Company and Shell Chemicals Canada, Inc.

Since its founding in 1986 as a distributor of excess co-product acetone,
JLM has grown rapidly by expanding its product sourcing arrangements and product
offerings, adding manufacturing capacity and providing superior customer service
and consistent product quality and availability. From 1992 to 1996, JLM's EBITDA
increased from $2.1 million to $13.5 million, a compound annual growth rate of
approximately 59.6% (see Footnote 2 to the Summary Consolidated Financial
Information.)

In order to support its worldwide marketing and distribution capabilities,
the Company continually seeks to acquire assets and establish relationships to
provide a consistent and reliable source of products. The Company acquired a
manufacturing facility in 1995 in Blue Island, Illinois (the "Blue Island
Plant") that produces phenol and acetone. In addition, in 1987, JLM entered into
a joint venture with General Electric Company and an affiliate of CITGO that
manufactures phenol and acetone in Mt. Vernon, Indiana (the "Mt. Vernon Plant").
In connection with the joint venture, the Company entered into a long-term
agreement to purchase all acetone produced at the Mt. Vernon Plant not used by
GE Petrochemicals, Inc. In 1996, the Blue Island Plant and the Mt. Vernon Plant
collectively supplied approximately 63.0% of the total acetone sold by JLM, and
the Blue Island Plant supplied approximately 74.0% of the total phenol sold by
JLM.

In addition to its manufacturing facility and joint venture, JLM sources
products through long-established supplier relationships with many of the
leaders in the worldwide chemical industry including ARCO Chemical Company,
Goodyear Tire & Rubber Co., Monsanto Company and Repsol, S.A. (Spain), one of
the largest chemical companies in Spain. The Company also has an exclusive
arrangement to distribute solvents in North America for Sasol Chemical
Industries (PTY) Ltd., one of the largest chemical companies in South Africa,
and recently entered into an agreement to become a U.S. distributor of styrene
for GE Petrochemicals, Inc.

To further enhance its product sourcing, marketing and distribution
capabilities, the Company has acquired terminaling and storage facilities in
Wilmington, North Carolina (the "JLM Terminal") and Bayport, Texas (the "OTC
Terminal"). The JLM Terminal consists of 10 storage tanks with a total capacity
of 15 million gallons and is capable of handling a broad range of products
including acetone, methanol, ethanol and propanol. The OTC Terminal is a joint
venture with an affiliate of Ultramar Diamond Shamrock that operates primarily
as an export facility for propylene manufactured in the U.S. The OTC Terminal
has an annual throughput capacity of approximately 900 million pounds and a
total storage capacity of approximately 22 million pounds. These terminaling and
storage facilities give the Company the ability to take immediate physical
delivery of a
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<PAGE> 5

substantial volume of product which is of value to the Company's suppliers and
ensures that the Company will have product available for its customers. These
facilities also give the Company the ability to offer chemical storage,
terminaling and logistics services, and have allowed the Company to capitalize
on a trend by many large chemical producers to outsource these operations. The
Company believes its ability to multi-source products through its manufacturing
facility, joint venture and supplier relationships, as well as its ownership of
terminaling and storage facilities distinguish it from its competitors and
enhance its ability to market significant volumes of products.

Product sourcing and marketing efforts are handled principally by the
Company's sales team of 33 full time employees. JLM maintains offices in the
U.S., Canada, the Netherlands, Venezuela and Thailand and recently opened two
affiliate offices in India and an office in Colombia. JLM has also established
sales arrangements with companies in Spain, Italy, Brazil, Peru and Taiwan. In
addition, the Company recently purchased a 25.0% interest in SK Chemicals Asia
Pte. Ltd., a Singapore-based company ("SK Asia"), and has agreed to purchase a
12.7% interest in SK Chemical Trading Pte. Ltd., another Singapore-based company
("SK Trading"), both of which are participating in a Vietnamese joint venture
that intends to construct a chemical plant in Vietnam that will produce dioctyl
phthalate, a chemical used in the production of plastics such as poly vinyl
chloride ("PVC"). The Vietnamese joint venture also intends to construct
terminaling and storage facilities in Vietnam and Malaysia. See "Business
Strategy."

BUSINESS STRATEGY

The Company's principal objective is to continue to expand the number of
sources and breadth of its chemical products and the markets in which it
distributes these products to enhance its position as a leading supplier in the
worldwide chemical industry. Key elements of the Company's business strategy
include:

- Expand Sources of Supply through Joint Ventures, Acquisitions and
Strategic Relationships. The Company will continue to seek to identify
and pursue domestic and international opportunities to expand its sources
of supply for products in or consistent with its core business. These
opportunities may include additional joint ventures, acquisitions and
strategic relationships. Consistent with this strategy, the Company formed
the Mt. Vernon joint venture with General Electric Company and an
affiliate of CITGO in 1987, acquired the Blue Island Plant in 1995 and
established a long-term supplier relationship with Sasol Chemical
Industries (PTY), Ltd., a South African Company, in 1988. Certain phenol
producers have recently announced their intentions to add approximately 3
billion pounds of annual production capacity starting in the year 2000.
JLM currently is exploring opportunities to participate in certain of
these expansions in order to secure additional sources of phenol and
acetone.

- Increase Sales of Existing Products; Add New Products. The Company will
continue to develop its existing relationships and establish new
relationships to increase the overall volume and types of products it
distributes by (i) increasing the amount distributed by the Company of an
existing supplier's output of a given chemical, (ii) distributing
additional products for existing suppliers and (iii) adding new chemical
producers to its supplier base. During 1996, the Company entered into
agreements to distribute approximately 70 million additional pounds of
chemicals for both existing and new suppliers in 1997, including ARCO
Chemical Company, Goodyear Tire & Rubber Co. and Monsanto Company. In
addition, the Company recently expanded the product line it distributes
for Sasol Chemical Industries (PTY) Ltd. In 1997, the Company has entered
into new agreements with CONDEA Vista Company to distribute butanol and
with GE Petrochemicals, Inc. to become a distributor of styrene in the
U.S.

- Continue International Expansion. The Company currently has
international operations in South America, Europe and Asia. JLM intends to
continue to utilize its chemical market experience, distribution and
logistics capabilities and industry relationships to increase its
international presence, particularly in the growing chemical markets of
Asia and South America. The Company recently opened two affiliate offices
in India and one in Colombia. In addition, JLM recently purchased a
minority interest in SK Asia and has agreed to purchase a minority
interest in SK Trading, both of which are participating in a Vietnamese
joint venture that intends to construct a dioctyl phthalate chemical plant
in Vietnam and

4
<PAGE> 6

terminaling and storage facilities in Vietnam and Malaysia. The Company
believes its indirect participation in the Vietnamese joint venture will
provide it with increased access to the Asian market.

- Continue to Provide Superior Customer Service. JLM believes that its
continued success will be in large part due to its emphasis on providing
superior customer service. The Company believes it is well positioned to
take advantage of current trends within the chemical industry as chemical
producers continue to outsource their terminaling and logistics operations
and reduce the number of outside distributors used. The Company focuses on
providing sourcing, inventory and logistics solutions for its customers
and endeavors to provide both its customers and suppliers with a level of
service that is unmatched in the industry.

The Company was incorporated in 1986 as a Delaware corporation. Its
principal executive offices are located at 8675 Hidden River Parkway, Tampa,
Florida 33637, and its telephone number is (813) 632-3300.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company................. 2,156,000 shares
Common Stock offered by the Selling Stockholder..... 144,000 shares
Common Stock to be outstanding after the Offering... 6,899,936 shares(1)
Use of proceeds..................................... To repay approximately $17.0 million in
long-term debt, to fund working capital
and for general corporate purposes. See
"Use of Proceeds."
Proposed Nasdaq National Market symbol.............. "JLMI"
</TABLE>

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

(1) Excludes 464,200 shares of Common Stock issuable upon the exercise of stock
options or upon the vesting of shares of restricted stock which are to be
granted effective upon completion of the offering. See "Management -- Equity
Based Compensation Plans."

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<PAGE> 7

SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
----------------------------------------------------- -------------------------
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- -------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues........................ $199,751 $174,322 $218,570 $289,371 $ 236,521 $ 57,861 $ 80,518
Gross profit.................. 9,092 9,132 11,663 23,910 28,239 6,690 6,847
Operating income................ 1,764 1,956 2,383 8,734 11,001 2,675 2,929
Income from continuing
operations before discontinued
operations and extraordinary
item.......................... $ 1,397 $ 1,157 $ 1,109 $ 3,629 $ 4,357 $ 322 $ 1,560
INCOME PER SHARE:
Income from continuing
operations before discontinued
operations and extraordinary
item.......................... $ 0.28 $ 0.23 $ 0.22 $ 0.72 $ 0.89 $ 0.06 $ 0.33
Discontinued operations......... (0.05) (0.06) (0.05) (0.09) (0.09) (0.02) (0.02)
Extraordinary item.............. -- -- 0.03 -- -- -- --
-------- -------- -------- -------- --------- -------- ---------
Net income per share............ $ 0.23 $ 0.17 $ 0.20 $ 0.63 $ 0.80 $ 0.04 $ 0.31
======== ======== ======== ======== ========= ======== =========
Weighted average number of
shares outstanding............ 5,011 5,011 5,011 5,011 4,878 5,011 4,744
Pro forma income per share from
continuing operations before
discontinued operations and
extraordinary item(1)......... $ 0.76 $ 0.26
Pro forma shares
outstanding(1)................ 7,034 6,900
OTHER FINANCIAL DATA:
Depreciation and amortization
expense....................... $ 322 $ 352 $ 572 $ 1,522 $ 2,524 $ 532 $ 678

EBITDA(2)....................... 2,086 2,308 2,955 10,256 13,525 3,207 3,607
</TABLE>

<TABLE>
<CAPTION>
MARCH 31, 1997
-------------------------
ACTUAL AS ADJUSTED(1)
-------- --------------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)................................... $ (825) $ 11,475
Total assets................................................ 108,745 117,199
Total debt.................................................. 38,602 22,562
Total stockholders' equity.................................. 14,736 40,021
</TABLE>

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

(1) Adjusted to give effect to the issuance of 2,156,000 shares of Common Stock
by the Company at an assumed initial public offering price of $13.00 per
share and the application of a portion of the estimated net proceeds as of
the beginning of the period to repay certain indebtedness as described under
"Use of Proceeds."

(2) EBITDA represents the operating income of the Company plus depreciation and
amortization. EBITDA is not a measure of financial performance under
generally accepted accounting principles ("GAAP") and may not be comparable
to other similarly titled measures by other companies. EBITDA does not
represent net income or cash flows from operations as defined by GAAP and
does not necessarily indicate that cash flows will be sufficient to fund
cash needs. As a result, EBITDA should not be considered an alternative to
net income as an indicator of operating performance or to cash flows as a
measure of liquidity. EBITDA is included in this Prospectus because it is a
basis upon which the Company assesses its financial performance, and certain
covenants in the Company's borrowing arrangements are tied to similar
measures. Supplemental selected consolidated cash flow information is
included below:

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<PAGE> 8

RISK FACTORS

In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating the Company and its
business before purchasing the Common Stock offered by this Prospectus. The
following is not intended as, and should not be considered, an exhaustive list
of relevant factors. This Prospectus contains forward-looking statements. All
forward-looking statements included in this Prospectus are based on current
expectations and information available to the Company on the date hereof, and
the Company assumes no obligation to update any such forward-looking statements.
These forward-looking statements involve risks and uncertainties, including,
among others, those set forth below. The Company's actual results could differ
materially from those anticipated in such forward-looking statements.

CYCLICALITY OF THE WORLDWIDE CHEMICAL MARKETS; POSSIBLE EXCESS PRODUCTION
CAPACITY

The Company's activities include the manufacture and sale of phenol and
acetone and the marketing of propylene. In 1996, sales of acetone, phenol and
propylene accounted for approximately 39.0%, 18.0% and 8.0%, respectively, of
the Company's total revenues. The markets for acetone, phenol and propylene are
cyclical. This cyclicality primarily results from changes in the balance between
supply and demand, the price of feedstocks and the level of general economic
activity. Historically, these markets have experienced alternating periods of
tight supply resulting in generally rising prices and profit margins, followed
by periods of large capacity additions resulting in oversupply and generally
declining prices and profit margins. Although the markets for acetone, phenol
and propylene were favorable to the Company in 1996, there can be no assurance
that this will continue to be the case or that the Company would remain
profitable if a shift in the market was to cause prices to decline and profit
margins to shrink for these products.

According to industry sources, current world phenol and acetone capacity is
approximately 13.8 billion pounds and 8.5 billion pounds, respectively.
Approximately 80.0% of global acetone production is as a co-product in the
manufacture of phenol, and, as a result, phenol demand largely determines
acetone production levels. Certain phenol producers have announced their
intentions to add approximately 3 billion pounds of annual production capacity
starting in the year 2000. In the event that each of the announced capacity
additions is completed, the resulting increase in levels of phenol and acetone
production could exceed anticipated demand for such chemicals, resulting in
declining prices which could have a material adverse effect on the Company's
results of operations and financial condition. However, the Company believes
that some of the announced capacity additions may not be completed as scheduled
because estimated world demand would not justify such an increase in the level
of phenol and acetone production.

FLUCTUATIONS IN THE COST AND AVAILABILITY OF RAW MATERIALS

In 1996, approximately 12.5% of the Company's revenues and 62.0% of the
Company's operating income were derived from the sale of products manufactured
at the Blue Island Plant. An adequate supply of raw materials at competitive
prices is critical to the economic success of the Company's manufacturing
operations. JLM does not produce propylene and benzene, the key raw materials
used for the production of cumene, the primary feedstock for the production of
acetone and phenol. The Company generally obtains propylene via direct pipeline
from a single supplier under a long-term contract. The Company currently obtains
benzene from three suppliers under supply contracts at market rates. The Company
believes that there are a number of alternative sources of supply for propylene
and benzene. However, if the Company's current propylene supplier was unable to
meet its obligations or if the Company's propylene supply agreement could not be
renewed on terms substantially similar to those under the current agreement, the
Company would be required to incur increased costs for propylene which would
have a material adverse effect on the Company's results of operations and
financial condition.

The ability to pass on increases in raw material prices to the Company's
customers is, to a large extent, dependent on market conditions. There may be
periods of time in which increases in raw material prices are not recovered by
the Company due to an inability to increase the selling prices of its products
because of weakness in demand for, or oversupply of, such products. Therefore,
increases in raw material prices could have a material

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<PAGE> 9

adverse effect on the Company's results of operations and financial condition.
See "Business -- Manufacturing and Product Sourcing."

RISKS ASSOCIATED WITH DISTRIBUTION SUPPLY CONTRACTS

Certain products distributed by the Company are obtained through supply
relationships with other chemical producers. Typically, the Company's supply
contracts have one-year terms with evergreen provisions that automatically renew
the contracts for additional one year terms unless notice of termination is
provided (which notice may be, under certain agreements, as short as 30 days).
The Company has long-established relationships with many of its suppliers. There
can be no assurance, however, that the Company's relationships or agreements
with such suppliers will not be terminated and, if terminated, can be replaced.

Since 1994, the Company has sourced on average approximately 250 million
pounds of acetone annually from the Mt. Vernon Plant. In 1996, the amount of
acetone made available to JLM was reduced by approximately 15 million pounds and
it is anticipated that over the next four years the amount of acetone made
available to JLM will be further reduced by approximately 35 to 40 million
pounds. This reduction is the result of increased consumption of acetone by GE
Petrochemicals, Inc. See"Business -- Manufacturing and Sourcing."

Due to the cyclical nature of the prices of many of the commodity chemical
products the Company distributes, the Company endeavors to enter into
distribution agreements with its external suppliers that provide the Company a
fixed percentage profit per unit volume of product or otherwise reduce the
Company's exposure to fluctuations in the selling price of the products it
distributes for other manufacturers. There can be no assurance that in the
future the Company will be able to enter into contracts that provide it with
similar protection against price volatility. The inability to do so could have a
material adverse effect on the Company's results of operations and financial
condition. See "Business -- Sales and Marketing."

In addition, certain of the Company's agreements with its suppliers require
the Company to purchase a minimum amount of chemical product or to pay certain
agreed upon amounts for such minimum quantities if not taken by the Company.
These agreements involve financial risk to the Company and could require the
Company to expend significant amounts of capital without receiving corresponding
revenues which could have a material adverse effect on the Company's results of
operations and financial condition.

RISKS OF INTERNATIONAL SALES

In 1996, approximately 33.0% of the Company's revenues were attributable to
operations conducted abroad and to export sales. As part of its business
strategy, JLM intends to selectively pursue international expansion. In certain
countries where JLM currently operates or intends to expand its operations, the
Company could be subject to certain political and economic uncertainties,
including labor unrest, political instability, restrictions on transfers of
funds, high export duties and quotas, domestic and international customs and
tariffs, unexpected changes in regulatory environments and potentially adverse
tax consequences. There can be no assurance that these factors will not have a
material adverse effect on the Company's ability to increase or maintain its
international sales or on its results of operations and financial condition.

FOREIGN EXCHANGE FLUCTUATIONS

A portion of the Company's revenues is denominated in currencies other than
the U.S. dollar. Accordingly, the Company's results of operations and financial
condition may be effected by fluctuations in the rate of exchange between such
currencies and the U.S. dollar. Moreover, the Company may incur costs in
connection with conversions between currencies. Although the Company attempts to
monitor its exposure to currency fluctuations by continuously reviewing actual
and anticipated changes in exchange rates and general economic conditions in the
countries in which the Company operates, as well as its actual and anticipated
sources and uses of various foreign currencies, there can be no assurance that
exchange rate fluctuations will not have a material adverse effect on the
Company's results of operations and financial condition. For a further
discussion of the effect of foreign currency exchange fluctuations on the
Company's operations, see "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Effects of Inflation; Foreign Currency
Exchange Rates."

8
<PAGE> 10

DEPENDENCE ON KEY CUSTOMERS

A small number of the Company's customers historically have accounted for a
significant percentage of the Company's sales of acetone and phenol. Loss of one
or more of these significant customers could have a material adverse effect on
the Company's results of operations and financial condition. In the past, the
Company has not experienced significant difficulties in replacing the sales
volumes accounted for by the periodic loss of significant customers. However,
there can be no assurance that the historic levels of business from current
customers will be maintained in the future or that such customers could be
replaced quickly enough to avoid adversely impacting revenues and profitability.

IMPLEMENTATION OF BUSINESS STRATEGY

The Company has experienced rapid growth since its inception. JLM's
continued growth is largely dependent on the successful implementation of its
business strategy. There can be no assurance that the Company will be able to
successfully implement its business strategy or that if implemented, such
strategy will be successful. If the Company is unable to implement its business
strategy, the Company's results of operations and financial condition could be
adversely affected. See "Business -- Business Strategy."

POTENTIAL COSTS OF ENVIRONMENTAL COMPLIANCE

The Company is subject to federal, state, local and foreign environmental
laws, rules, regulations, and ordinances concerning emissions and discharges,
and the generation, handling, storage, transportation, treatment, disposal and
import and export of hazardous materials ("Environmental Laws"). The operation
of chemical manufacturing and storage facilities and the distribution of
chemical products entail risks under Environmental Laws, many of which provide
for substantial remediation costs in the event of discharges of contaminants and
fines and criminal sanctions for violations. In addition, compliance with
existing and future Environmental Laws may require significant capital
expenditures by the Company. Although it is the Company's policy to comply with
all Environmental Laws and the Company believes that it is currently in material
compliance with all Environmental Laws, there can be no assurance that material
environmental liabilities will not be incurred by the Company or that compliance
with Environmental Laws will not require material capital expenditures by the
Company, each of which could have a material adverse effect on the Company's
results of operations and financial condition.

Elevated levels of contaminants, which may be the result of historical use
and/or migration from neighboring properties, have been detected at the JLM
Terminal and at the Blue Island Plant. Under the terms of the purchase of the
JLM Terminal, the Company is indemnified by Unocal, the prior owner of the
property, for up to $7.5 million in environmental liabilities which it will seek
to enforce if any liabilities for violating Environmental Laws arise at the JLM
Terminal. There can be no assurance, however, that a claim for indemnification
will be successful. The Company has no right to indemnification from the prior
owner of the Blue Island Plant. If the Company is required to conduct a
remediation of the Blue Island Plant or remediation for which it is not
indemnified at the JLM Terminal, the level of expenditure that may be required
to satisfy the Company's environmental liabilities could have a material adverse
effect on its financial condition or results of operations.

Levels of organic compounds slightly in excess of regulatory reporting
thresholds were detected in the ground water at the Company's Polychem facility.
The Company has been addressing the issues and the analytical data most recently
collected indicate very low levels of target contaminants. Accordingly, the
Company is presently investigating whether the site was initially properly
listed on the Hazardous Sites Inventory or whether the site can be removed from
the list. Costs for completion of any required remediation have not been
determined and there can be no assurance that if the Company is required to
complete further remediation at the Polychem facility that the costs would not
have a material adverse effect on the Company's financial condition or results
of operations. See "Business -- Environmental Regulation."

COMPETITION

The worldwide chemical market is intensely competitive. The Company faces
competition from a substantial number of global and regional competitors, many
of which have greater financial, production and other resources

9
<PAGE> 11

than the Company. Among the Company's competitors are some of the world's
largest chemical companies and major integrated petroleum companies that have
their own raw material resources. Barriers to entry in the industry, apart from
capital availability, may be low, particularly with respect to commodity
products. The entrance of new competitors in the industry, including companies
who currently serve as suppliers to the Company, may reduce the Company's
ability to maintain current sales or price levels. The Company's competitive
position is based principally on customer service and support, breadth of
product line, product quality, facility location and the selling prices of its
products. There can be no assurance that the Company will have sufficient
resources to maintain its current competitive position or market share. See
"Business -- Competition."

DEPENDENCE ON KEY PERSONNEL; ABILITY TO RECRUIT PERSONNEL

The future success of the Company is largely dependent on the efforts and
abilities of its senior management and certain other key personnel, particularly
John L. Macdonald, the Company's founder, President and Chief Executive Officer.
The Company's success will depend in large part on its ability to retain these
individuals and other current members of its senior management team and to
attract and retain qualified personnel in the future. All members of the
Company's senior management are employed by the Company on an "at-will" basis
and the Company has not entered into any employment agreement with any member of
its senior management. The Company does maintain a "key-person" life insurance
policy on Mr. Macdonald in the amount of $850,000. However, the loss of Mr.
Macdonald or other members of senior management or of certain other key
employees or the Company's inability to retain other qualified employees could
have an adverse impact on the Company's results of operations and financial
condition. See "Management."

VOTING CONTROL BY PRINCIPAL STOCKHOLDER

Immediately following completion of the Offering, John L. Macdonald,
President and Chief Executive Officer of the Company, will be the beneficial
owner of 4,371,648 shares of Common Stock, which represents approximately 63.4%
of the issued and outstanding shares of Common Stock (approximately 60.3% of the
issued and outstanding shares of Common Stock if the Underwriters'
over-allotment option is exercised in full). Mr. Macdonald has, and will
continue to have, sufficient voting power to elect the entire Board of Directors
of the Company and, in general, to determine (without the consent of the
Company's other stockholders) the outcome of any corporate transaction or other
matters submitted to the stockholders for approval. See "Management" and
"Principal and Selling Stockholders."

BROAD MANAGEMENT DISCRETION IN USE OF PROCEEDS; RISKS ASSOCIATED WITH POTENTIAL
ACQUISITIONS

Except for the repayment of approximately $17.0 million of outstanding
indebtedness (see "Use of Proceeds"), the Company currently has no specific
plans for use of a significant portion of the net proceeds of the Offering.
Accordingly, management of the Company will have broad discretion with respect
to the use of these funds. In particular, the Company could use a portion of
these funds to acquire or invest in complementary businesses, products and
assets. Future acquisitions or joint venture investments by the Company may
result in potentially dilutive issuances of equity securities, the incurrence of
additional debt and amortization expenses related to goodwill and other
intangible assets, which could materially adversely affect the Company's
business and results of operations. In addition, acquisitions and joint ventures
involve numerous risks, including difficulties in the assimilation of the
operations, products and personnel of the acquired company, the diversion of
management's attention from other business concerns, risks of entering markets
in which the Company has no direct prior experience and the potential loss of
key employees. There can be no assurance that the Company will be able to
identify attractive or willing acquisition or joint venture candidates, or that
the Company will be able to complete an acquisition or joint venture investment
if such candidates are identified. The Company has no present agreements or
commitments with respect to any material acquisitions of other businesses,
products or assets, except for its commitment to acquire a 12.7% interest in SK
Trading. The Company is also investigating opportunities to participate in
certain recently announced phenol capacity expansions, although, it has not
reached any agreement or understanding with respect to any such participation.
See "Use of Proceeds."

10
<PAGE> 12

ABSENCE OF DIVIDENDS; RESTRICTIONS ON DIVIDENDS

The Company has never paid any cash dividends on the Common Stock and does
not anticipate cash dividends on the Common Stock at any time in the foreseeable
future. See "Dividend Policy." In addition, pursuant to certain of the Company's
credit agreements, the Company and its subsidiaries are restricted from paying
dividends. The Company has pledged its interests in certain of its subsidiaries
as security for certain of the Company's obligations.

NO PRIOR MARKET FOR COMMON STOCK; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering there has been no public market for the Common Stock
and there can be no assurance that an active market will develop or be sustained
after the consummation of the Offering. Consequently, the initial public
offering price of the Common Stock offered hereby was determined by negotiations
among the Company, the Selling Stockholder and the Underwriters and may not be
indicative of future prices. See "Underwriting" for information relating to the
method of determining the initial public offering price.

The market price for the Common Stock may be significantly affected by such
factors as the Company's operating results, changes in any earnings estimates
publicly announced by the Company or by analysts, announcements of significant
business developments by the Company or its competitors and various factors
affecting the overall economic environment. In addition, the stock market has
experienced a high level of price and volume volatility, and market prices for
the stock of many companies, especially newly public companies, have experienced
wide price fluctuations not necessarily related to the fundamentals or operating
performance of such companies. These broad market fluctuations may adversely
affect the market price of the Company's Common Stock. See "Underwriting."

SHARES ELIGIBLE FOR FUTURE SALE

Future sales of a substantial number of shares of the Company's Common
Stock in the public market could adversely affect the market price of the Common
Stock and could impair the Company's ability to raise capital through the sale
of equity or equity-related securities. Upon completion of the Offering, the
Company will have 6,899,936 shares of Common Stock outstanding. Of such shares,
2,300,000 shares of Common Stock, representing approximately 33.3% of the issued
and outstanding shares of Common Stock (2,645,000 shares of Common Stock
representing 36.5% of the issued and outstanding shares of Common Stock if the
Underwriters' over-allotment option is exercised in full) will be freely
tradeable without restriction or further registration under the Securities Act,
unless purchased by "affiliates" of the Company as that term is defined in Rule
144 under the Securities Act ("Rule 144"). The remaining 4,599,936 shares of
Common Stock representing approximately 66.7% of the issued and outstanding
shares of Common Stock (approximately 63.5% of the issued and outstanding shares
of Common Stock if the Underwriters' over-allotment option is exercised in full)
are beneficially owned by affiliates of the Company and are therefore
"restricted securities" as that term is defined in Rule 144 and as such are
subject to certain holding period, volume limitations and other restrictions
prescribed by Rule 144. The Company, its officers, directors and certain
stockholders, who collectively hold all of such "restricted securities," have
agreed that they will not dispose of any shares of Common Stock for a period of
180 days after the date of the Underwriting Agreement relating to the Offering
without the written consent of the representatives of the Underwriters. Upon
expiration of such 180 day period, an aggregate of 228,288 shares will become
eligible for sale without restriction pursuant to Rule 144(k) or Rule 701 under
the Securities Act and approximately 4,371,648 additional shares will be
eligible for sale subject to the timing, volume and manner of sale restrictions
of Rule 144. See "Shares Eligible for Future Sale" and "Underwriting."

ANTI-TAKEOVER MEASURES

Certain provisions of the Company's Certificate of Incorporation and Bylaws
may be deemed to have anti-takeover effects and may delay, deter or prevent a
change in control of the Company that stockholders might otherwise consider in
their best interests. These provisions (i) allow only the Board of Directors,
the Chairman of the Board of Directors or the Chief Executive Officer of the
Company to call special meetings of the stockholders, (ii) establish certain
advance notice procedures for nomination of candidates for election as

11
<PAGE> 13

directors and for stockholder proposals to be considered at stockholders'
meetings, (iii) generally authorize the issuance of one or more classes of
"blank check" preferred stock, with such designations, rights and preferences as
may be determined from time to time by the Board of Directors and (iv) require
approval of holders of 80.0% of the outstanding voting power to amend or repeal
items (i), (ii) and (iv) above. See "Description of Capital Stock."

IMMEDIATE AND SUBSTANTIAL DILUTION

The amount by which the initial public offering price per share of Common
Stock exceeds the pro forma net tangible book value per share of Common Stock
after the Offering constitutes dilution to investors in the Offering. Persons
purchasing in the Offering will experience an immediate dilution of net tangible
book value of $7.39 per share. See "Dilution."

USE OF PROCEEDS

The net proceeds to the Company from its sale of 2,156,000 shares of Common
Stock offered hereby, based on an assumed initial public offering price of
$13.00 per share (the midpoint of the range of prices set forth on the cover of
this Prospectus), after deducting estimated offering expenses and underwriting
discounts, are estimated to be approximately $25.5 million ($29.6 million if the
Underwriters' over-allotment option is exercised in full). The Company will use
approximately $17.0 million of the net proceeds to repay certain long-term debt
and will have the remaining $8.5 million available to use for working capital
and general corporate purposes. A portion of the net proceeds may also be used
to acquire or invest in complementary businesses or products. Except for its
commitment of $500,000 to acquire a 12.7% interest in SK Trading the Company has
no present agreements or commitments and is not currently engaged in any
definitive negotiations with respect to any such transactions. In addition,
while JLM is investigating opportunities to participate in certain recently
announced phenol capacity expansions, it has not reached any agreement or
understanding with respect to any such participation and any discussions, to
date, have been merely exploratory in nature.

The indebtedness expected to be repaid as of March 31, 1997, consists of
(i) approximately $14.4 million incurred to finance the acquisition of the Blue
Island Plant and related capital expenditures, which accrues interest on the
unpaid principal balance at LIBOR plus 3.5% (9.2% per annum as of March 31,
1997) and matures in June 2002, (ii) approximately $1.7 million used to finance
the construction of the Company's headquarters in Tampa, which accrues interest
on the unpaid principal balance at 9.59% per annum and matures in June 2004 and
(iii) approximately $0.9 million incurred to finance the acquisition of the JLM
Terminal which accrues interest on the unpaid principal balance at 10.9% per
annum and matures in June 2000. The above amounts include prepayment penalties
and accrued interest totaling $1.1 million as of March 31, 1997.

Pending use of the net proceeds for the above purposes, the Company intends
to invest such funds in short-term, interest-bearing, investment grade
obligations.

The Company will not receive any proceeds from the sale of shares by the
Selling Stockholder.

DIVIDEND POLICY

The Company has never declared or paid cash dividends on its Common Stock
and does not anticipate that it will pay dividends in the foreseeable future.
The Company currently intends to retain future earnings, if any, for the future
operation and expansion of the Company's business. Any determination to pay
dividends in the future will be at the discretion of the Company's Board of
Directors and will be dependent upon the Company's results of operations,
financial restrictions, restrictions imposed by applicable law and other factors
deemed relevant by the Board of Directors. Furthermore, the Company and its
subsidiaries are restricted from paying dividends under certain credit
agreements to which they are a party. See "Risk Factors -- Absence of Dividends;
Restrictions on Dividends."

12
<PAGE> 14

CAPITALIZATION

The following table sets forth (i) the actual capitalization of the Company
as of March 31, 1997 and (ii) the capitalization of the Company as adjusted to
give effect to the Offering after deducting the estimated underwriting discount
and estimated offering expenses payable by the Company and the anticipated
application by the Company of the estimated net proceeds therefrom. See "Use of
Proceeds." The table should be read in conjunction with the Selected
Consolidated Financial Data and Consolidated Financial Statements of the Company
and Notes thereto included elsewhere herein.

<TABLE>
<CAPTION>
MARCH 31, 1997
---------------------
AS
ACTUAL ADJUSTED(2)
------- -----------
(IN THOUSANDS)
<S> <C> <C>
Total short-term debt(1).................................... $22,276 $19,001
======= =======
Long-term debt, excluding current maturities:
Bank debt................................................. $15,421 $ 2,657
Loan payable to stockholder............................... 905 905
------- -------
Total long-term debt.............................. 16,326 3,562
Stockholders' equity:
Common stock.............................................. 50 69
Additional paid-in capital................................ 490 25,415
Retained earnings......................................... 14,870 14,689
Foreign currency translation adjustment................... (152) (152)
Treasury stock............................................ (522) --
------- -------
Total stockholders' equity........................ 14,736 40,021
------- -------
Total capitalization........................................ $31,062 $43,583
======= =======
</TABLE>

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

(1) Consists of the current portion of long-term debt and loans payable.

(2) Adjusted to give effect to the issuance of 2,156,000 shares of Common Stock
by the Company at an assumed initial public offering price of $13.00 per
share and the application of a portion of the estimated net proceeds as of
the beginning of the period to repay certain indebtedness as described under
"Use of Proceeds."

13
<PAGE> 15

DILUTION

As of March 31, 1997, the net tangible book value of the Company was
approximately $13.2 million, or $2.79 per share of outstanding Common Stock.
"Net tangible book value per share" represents the total amount of tangible
assets of the Company reduced by the amount of total liabilities and divided by
the number of shares of Common Stock outstanding after giving effect to the
stock split described in Note 18 of Notes to Consolidated Financial Statements.
After giving effect to the sale by the Company of the 2,156,000 shares of Common
Stock in the Offering at an assumed initial public offering price of $13.00 per
share and after deducting estimated underwriting discounts and offering
expenses, the net tangible book value of the Company at March 31, 1997 would
have been approximately $38.7 million or $5.61 per share of Common Stock,
representing an immediate increase in net tangible book value of approximately
$2.82 per share of Common Stock to existing stockholders and an immediate
dilution of approximately $7.39 per share of Common Stock to new investors in
the Offering. Dilution per share represents the difference between the price per
share paid by new investors and the net tangible book value per share
immediately after the Offering. The following table illustrates the per share
dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share...................... $ 13.00
Net tangible book value per share at March 31, 1997....... $ 2.79
Increase in net tangible book value per share attributable
to new investors in the Offering....................... 2.82
-------
Net tangible book value per share after the Offering................. 5.61
-------
Net tangible book value per share dilution to new investors in the
Offering........................................................... $ 7.39
=======
</TABLE>

The following table sets forth the number of shares of Common Stock
purchased from the Company, the total consideration paid to the Company and the
average price per share of Common Stock paid by existing stockholders and by new
investors purchasing shares of Common Stock in the Offering:

<TABLE>
<CAPTION>
CONSIDERATION PAID
SHARES PURCHASED TO THE COMPANY AVERAGE
------------------- --------------------- PRICE PER
NUMBER(1) PERCENT AMOUNT PERCENT SHARE
--------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders................ 4,743,936 68.8% $ 540,000 1.9% $ 0.11
New investors........................ 2,156,000 31.2 28,028,000 98.1 13.00
--------- ----- ----------- -----
Total...................... 6,899,936 100.0% $28,568,000 100.0%
========= ===== =========== =====
</TABLE>

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

(1) Based on 6,899,936 shares of Common Stock outstanding as of March 31, 1997,
after giving effect to the Offering. Excludes 464,200 shares of Common Stock
issuable upon the exercise of outstanding stock options or upon the vesting
of shares of restricted stock which are to be granted effective upon
completion of the Offering.

14
<PAGE> 16

SELECTED CONSOLIDATED FINANCIAL DATA

Set forth below is certain selected consolidated historical financial
information of the Company and its subsidiaries as of December 31, 1992, 1993,
1994, 1995 and 1996 and for the years then ended and for the three months ended
March 31, 1996 and 1997. Such information has been derived from the Company's
Consolidated Financial Statements and related Notes thereto as of such dates and
with respect to such periods, which Consolidated Financial Statements have been
audited by Deloitte & Touche LLP, independent auditors. Such firm's report on
the Company's Consolidated Financial Statements as of December 31, 1995 and 1996
and for each of the three years ended December 31, 1994, 1995 and 1996, is
included elsewhere in this Prospectus. See the Consolidated Financial Statements
and related Notes included elsewhere in this Prospectus and "Management's
Discussion and Analysis of Financial Condition and Results of Operations." The
selected consolidated financial data presented below as of and for the three
months ended March 31, 1996 and 1997 is unaudited and was prepared by management
of the Company on the same basis as the audited Consolidated Financial
Statements included elsewhere in this Prospectus and, in the opinion of
management of the Company, includes all adjustments necessary to present fairly
the information set forth therein.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
--------------------------------------------------------- --------------------
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- -------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues......................... $ 199,751 $ 174,322 $ 218,570 $ 289,371 $ 236,521 $ 57,861 $ 80,518
Cost of sales.................... 190,659 165,190 206,907 265,461 208,282 51,171 73,671
--------- --------- --------- --------- --------- -------- ---------
Gross profit................... 9,092 9,132 11,663 23,910 28,239 6,690 6,847
Selling, general and
administrative expenses........ 7,328 7,176 9,280 15,176 17,238 4,015 3,918
--------- --------- --------- --------- --------- -------- ---------
Operating income............... 1,764 1,956 2,383 8,734 11,001 2,675 2,929
Interest income
(expense) -- net............... 246 (128) (371) (1,757) (2,815) (641) (628)
Other income -- net.............. 126 318 453 152 197 64 41
Foreign currency exchange (loss)
gain -- net.................... -- -- (319) (1,075) (527) (799) 63
--------- --------- --------- --------- --------- -------- ---------
Income before minority interest
and income taxes............. 2,136 2,146 2,146 6,054 7,856 1,299 2,405
Minority interest in (loss)
income of subsidiaries......... (3) (20) (64) 5 (82) (7) (9)
--------- --------- --------- --------- --------- -------- ---------
Income from continuing
operations before income
taxes, discontinued
operations and extraordinary
item......................... 2,133 2,126 2,082 6,059 7,774 1,292 2,396
Income tax provision............. 736 969 973 2,430 3,417 970 836
--------- --------- --------- --------- --------- -------- ---------
Income from continuing
operations before
discontinued operations and
extraordinary item........... $ 1,397 $ 1,157 $ 1,109 $ 3,629 $ 4,357 $ 322 $ 1,560
========= ========= ========= ========= ========= ======== =========
Net income..................... $ 1,134 $ 858 $ 1,049 $ 3,182 $ 3,929 $ 239 $ 1,476
========= ========= ========= ========= ========= ======== =========
INCOME PER SHARE:
Income from continuing operations
before discontinued operations
and extraordinary item......... $ 0.28 $ 0.23 $ 0.22 $ 0.72 $ 0.89 $ 0.06 $ 0.33
Discontinued operations.......... (0.05) (0.06) (0.05) (0.09) (0.09) (0.02) (0.02)
Extraordinary item............... -- -- 0.03 -- -- -- --
--------- --------- --------- --------- --------- -------- ---------
Net income per share............. $ 0.23 $ 0.17 $ 0.20 $ 0.63 $ 0.80 $ 0.04 $ 0.31
========= ========= ========= ========= ========= ======== =========
Weighted average number of shares
outstanding.................... 5,011 5,011 5,011 5,011 4,878 5,011 4,744
Pro forma income per share from
continuing operations before
discontinued operations and
extraordinary item(1).......... $ 0.76 $ 0.26
Pro forma shares
outstanding(1)................. 7,034 6,900

OTHER FINANCIAL DATA:
Depreciation and amortization
expense........................ $ 322 $ 352 $ 572 $ 1,522 $ 2,524 $ 532 $ 678
EBITDA(2)........................ 2,086 2,308 2,955 10,256 13,525 3,207 3,607

</TABLE>

15
<PAGE> 17

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
---------------------------------------------------- ------------------
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- -------- -------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)........... $ 1,843 $ 1,047 $ 1,498 $ (274) $ (61) $ 5,119 $ (825)
Total assets........................ 37,642 35,945 55,031 86,498 87,292 81,455 108,745
Total debt.......................... 6,353 5,182 6,561 23,204 31,043 27,350 38,602
Total stockholders' equity.......... 6,295 6,462 7,411 10,519 13,444 10,618 14,736
</TABLE>

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

(1) Adjusted to give effect to the issuance of 2,156,000 shares of common stock
by the Company at an assumed initial public offering price of $13.00 per
share and the application of a portion of the estimated net proceeds as of
the beginning of the period to repay certain indebtedness as described under
"Use of Proceeds."

(2) EBITDA represents the operating income of the Company plus depreciation and
amortization. EBITDA is not a measure of financial performance under
generally accepted accounting principles ("GAAP") and may not be comparable
to other similarly titled measures by other companies. EBITDA does not
represent net income or cash flows from operations as defined by GAAP and
does not necessarily indicate that cash flows will be sufficient to fund
cash needs. As a result, EBITDA should not be considered an alternative to
net income as an indicator of operating performance or to cash flows as a
measure of liquidity. EBITDA is included in this Prospectus because it is a
basis upon which the Company assesses its financial performance, and certain
covenants of the Company's borrowing agreements are tied to similar
measures. Supplemental selected consolidated cash flow information is
included below:

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
---------------------------------------------------- ------------------
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- -------- -------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Net cash provided by (used in):
Operating activities................... $ (1,244) $ 3,487 $ 6,064 $ 2,746 $ 26 $(3,565) $ (5,894)
Investing activities................... (2,687) (3,229) (1,218) (4,661) (6,631) (1,480) (443)
Financing activities................... 4,900 (2,086) 85 (469) 6,705 4,411 7,485
Capital expenditures..................... 2,513 3,161 1,221 2,320 7,347 1,445 371
</TABLE>

16
<PAGE> 18

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with "Selected
Consolidated Financial Data" and the Consolidated Financial Statements of the
Company and the Notes thereto included in this Prospectus. In particular, for
information regarding the Company's operations in different industry segments
and geographic locations see Note 17 of Notes to Consolidated Financial
Statements.

This Prospectus contains forward-looking statements. All forward-looking
statements included in this Prospectus are based on current expectations and
information available to the Company on the date hereof, and the Company assumes
no obligation to update any such forward-looking statements. These
forward-looking statements involve risks and uncertainties including, among
others: (i) the cyclical nature of the worldwide chemical market, (ii) the
possibility of excess production capacity, (iii) fluctuations in the cost and
availability of raw material prices, (iv) the political and economic
uncertainties associated with international operations, (v) fluctuations in
foreign exchange, (vi) the risks associated with potential acquisitions and
(vii) the ability to successfully implement other features of the Company's
business strategy. See "Risk Factors." The Company's actual results could differ
materially from those anticipated in such forward-looking statements.

GENERAL

JLM is a leading marketer and distributor of certain commodity chemicals,
principally acetone and phenol. The Company believes it is the second largest
marketer of acetone and the fifth largest marketer of phenol in North America.
JLM is also a global distributor of olefins, principally propylene, as well as a
variety of other commodity and specialty chemicals. In order to provide stable
and reliable sources of supply for its products, the Company (i) maintains
long-established supplier relationships with several major chemical companies,
(ii) manufactures phenol and acetone and (iii) sources acetone from its joint
venture manufacturing operation. JLM's operating income has grown from $2.4
million in 1994 to $11.0 million in 1996, a compound annual growth rate of
114.9%. This growth was achieved primarily as a result of the acquisition and
successful integration of the Blue Island Plant, increased sales of existing
products and the addition of new products.

A majority of the Company's revenue is derived from the sale of commodity
chemicals, prices for which are subject to cyclical fluctuations. The Company
endeavors to enter into supply contracts that provide a fixed percentage profit
per unit of product sold. As a result, the Company believes that revenues may
not be an accurate indicator of the Company's overall financial performance.
Rather, revenues should be considered along with operating income and net income
to accurately measure the Company's financial performance. For example as
average acetone, phenol and propylene selling prices declined from 1995 to 1996,
the Company's revenues declined by approximately 18.3% over the same period.
However, in 1996 operating income and net income increased 26.0% and 23.5%,
respectively, in comparison to the prior year's results.

The Company's business consists of a manufacturing and a marketing segment.
The Company's manufacturing segment includes the operations of the Blue Island
Plant and the sale of acetone manufactured at the Mt. Vernon Plant. The
Company's marketing segment includes its distribution, storage and terminaling
operations and all other sourcing operations.

17
<PAGE> 19

Set forth below, for the periods indicated, is certain information
regarding the contributions by the manufacturing and marketing segments to the
Company's revenues, gross profit, operating income, gross margin and operating
margin. The marketing segment revenues include an assumed selling commission
determined in accordance with industry standards for the sale of products that
are manufactured at the Blue Island Plant. In addition, the marketing segment
operating income reflects the expenses associated with the sale of such
products. The marketing segment also includes an assumed allocation of revenues,
costs of goods sold and expenses associated with the sale of products sourced
from the Mt. Vernon Plant, which allocation has been determined on a basis
consistent with the assumed commission for sale of products manufactured at the
Blue Island Plant. Results for any one or more periods are not necessarily
indicative of annual results or continuing trends.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------------------------------ ---------------------------------
1994 1995 1996 1996 1997
---------------- ---------------- ---------------- --------------- ---------------
(IN THOUSANDS, EXCEPT PERCENTAGES)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Marketing............. $193,836 88.7% $229,505 79.3% $176,274 74.5% $39,983 69.1% $64,186 79.7%
Manufacturing......... 24,734 11.3 59,866 20.7 60,247 25.5 17,878 30.9 16,332 20.3
-------- ----- -------- ----- -------- ----- ------- ----- ------- -----
Total revenues.......... $218,570 100.0% $289,371 100.0% $236,521 100.0% $57,861 100.0% $80,518 100.0%

Gross profit:
Marketing............. $ 8,919 76.5% $ 14,154 59.2% $ 15,241 54.0% $ 3,053 45.6% $ 3,265 47.7%
Manufacturing......... 2,744 23.5 9,756 40.8 12,998 46.0 3,637 54.4 3,582 52.3
-------- ----- -------- ----- -------- ----- ------- ----- ------- -----
Total gross profit...... $ 11,663 100.0% $ 23,910 100.0% $ 28,239 100.0% $ 6,690 100.0% $ 6,847 100.0%
Segment operating
income:
Marketing............. $ 4,045 86.7% $ 5,186 45.7% $ 5,011 39.8% $ 959 30.5% $ 1,367 39.0%
Manufacturing......... 621 13.3 6,164 54.3 7,586 60.2 2,186 69.5 2,137 61.0
-------- ----- -------- ----- -------- ----- ------- ----- ------- -----
Total segment operating
income................ $ 4,666 100.0% $ 11,350 100.0% $ 12,597 100.0% $ 3,145 100.0% $ 3,504 100.0%
Corporate expense....... (2,283) -- (2,616) -- (1,596) -- (470) -- (575) --
-------- ----- -------- ----- -------- ----- ------- ----- ------- -----
Total operating
income................ $ 2,383 100.0% $ 8,734 100.0% $ 11,001 100.0% $ 2,675 100.0% $ 2,929 100.0%
</TABLE>

<TABLE>
<CAPTION>
AS A PERCENTAGE OF SEGMENT REVENUES
--------------------------------------------------------------------------------
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------------------------ -----------------------------
1994 1995 1996 1996 1997
-------------- -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross margin:
Marketing.................... 4.6% 6.2% 8.6% 7.6% 5.1%
Manufacturing................ 11.1 16.3 21.6 20.3 21.9
---- ---- ---- ---- ----
Total gross margin........... 5.3% 8.3% 11.9% 11.6% 8.5%
Segment operating margin:
Marketing.................... 2.1% 2.3% 2.8% 2.4% 2.1%
Manufacturing................ 2.5 10.3 12.6 12.2 13.1
---- ---- ---- ---- ----
Total segment operating
margin....................... 2.1% 3.9% 5.3% 5.4% 4.4%
</TABLE>

Marketing Segment

The marketing segment revenues are influenced largely by the volume of new
and existing products sold by the Company. The volume of products sold depends
on a number of factors, including growth in the homebuilding and automobile
sectors and the overall economic environment. The Company's supply agreements,
primarily relating to acetone, frequently contain a term providing for a fixed
percentage profit per unit of product sold. In addition, the Company's supplier
and customer contracts have a provision permitting the Company to purchase or
sell additional product at the Company's option, typically plus or minus 5.0% of
the contractual volume amount. As a result, during a period of pricing
volatility, the Company has the opportunity to improve its profitability by
exercising the appropriate option to either build inventory in a rising price
environment or to sell product for future delivery in a declining price
environment.

18
<PAGE> 20

In 1995, the Company instituted changes in its shipping and handling of
olefins in order to increase its olefins marketing gross profit margins.
Specifically, the Company now attempts to secure free on board ("FOB") shipping
terms for its bulk commodity sales and, when unable to do so, attempts to
negotiate extended free time for unloading vessels at the port of destination.
By doing so, the Company has reduced the risks of incurring charges for delays
in unloading vessels at the port of destination. In 1995, as a result of the
implementation of these changes, the Company experienced lower revenues, but
improved gross margins, from its olefins marketing activities.

In May 1997, the Company and its joint venture partners agreed to
restructure their investments in Olefins Terminal Corporation ("OTC"). As a
result, the Company and Ultramar Diamond Shamrock ("UDS") bought out the
interest of a third joint venture partner and each became a 50% owner of OTC.
The Company accounts for its investment in OTC through the equity method of
accounting. (See Note 5 of Notes to Consolidated Financial Statements). As part
of the restructuring, OTC's $3.6 million of existing indebtedness was refinanced
and the take-or-pay terminaling agreement between OTC and the Company's olefins
marketing operations was cancelled and a new terminaling arrangement
implemented. The original take-or-pay terminaling agreement resulted in charges
to JLM's pre-tax income of $1.3 million in 1994, $1.3 million in 1995, and $1.4
million in 1996, and the Company did not generate significant revenues at the
terminaling facility to offset these charges. Under the new arrangement,
effective as of January 1, 1997, the Company will pay terminal throughput fees
only when it utilizes the terminaling facility thus generating offsetting
revenues. The Company expects that this arrangement should improve the Company's
gross profit potential (as compared to historical results) since the Company
will no longer incur terminal fees without accompanying revenues.

The Company's Venezuelan operations, which accounted for 4.3% of 1996 total
revenues, expose it to the risk of hyperinflation and currency devaluation. In
accordance with Statement of Financial Accounting Standards ("SFAS") No. 52,
Foreign Currency Translation, the effects of fluctuations in exchange rates in
translating the net assets of the financial statements in a hyperinflationary
economy require any gains or losses to be included in current net income. During
the period 1994 through April 1996, exchange controls, followed by rapid
devaluation, created translation losses which were charged against earnings in
each of the respective accounting periods. In April 1996, exchange controls were
lifted and have contributed to stabilizing the currency. See "Effect of
Inflation; Foreign Currency Exchange Rates" below for a further discussion of
the impact of exchange rates on the Company's results of operations.

Manufacturing Segment

The results of operations of the Company's manufacturing segment are
influenced by a number of factors, including economic conditions, competition
and the cost of raw materials, principally propylene and benzene. The Company's
ability to pass along raw material price increases to its customers is limited
because the commodity nature of the chemicals manufactured at the Blue Island
Plant restricts the Company's ability to increase prices.

As a result of an anticipated propylene price increase, in 1996 the Company
entered into a financial hedging contract in order to minimize its exposure in
the first quarter of 1997 to fluctuations in the price of propylene. Gains and
losses for such contracts are recognized as an adjustment of cost of sales at
the time the finished products are sold. As a result, in the first quarter of
1997 the Company had a gain on the hedging contract of approximately $0.5
million, which reduced cost of sales for this period by a corresponding amount.

The development of financial instruments to hedge against changes in the
prices of propylene and benzene has only recently occurred and the Company has
just begun using such instruments. The Company may seek periodically in the
future, to the extent available, to enter into financial hedging contracts for
the purchase of propylene and benzene in an effort to manage its raw material
purchase costs (see Note 2 of Notes to Consolidated Financial Statements). There
can be no assurance that the use of such instruments by the Company will be
successful. The Company can be exposed to losses in connection with such
contracts equal to the amount by which the fixed hedge price on the contract is
above the market price for such chemicals at the time of purchase.

19
<PAGE> 21

Since its acquisition in 1995, the Blue Island Plant has operated at or
near full capacity and, in order to economically expand its production capacity,
it would be necessary to increase its capacity to that of a worldscale facility.
However, physical limitations at the Blue Island Plant prohibit such an increase
and, as a result, the Company has no plans to expand the Blue Island Plant. In
1996, the first full year of ownership of the Blue Island Plant, approximately
60.2% of the Company's total segment operating income was derived from the
manufacturing segment.

Since 1994, the Company has sourced, on average, approximately 250 million
pounds annually of acetone from the Mt. Vernon Plant. The Company is required to
purchase all of the acetone produced at the Mt. Vernon Plant and not consumed by
GE Plastics. In 1996, the amount of acetone available to JLM was reduced by
approximately 15 million pounds and it is anticipated that over the next four
years the amount of acetone available to JLM will be further reduced by
approximately 35 to 40 million pounds. The reduction in the amount of acetone
sourced from the Mt. Vernon Plant is the result of increased consumption by GE
Plastics. In view of capacity limitations affecting the Blue Island Plant and
the anticipated reduction in product sourced from the Mt. Vernon Plant, the
Company anticipates any growth in the manufacturing segment will come as a
result of additional acquisitions or joint ventures.

Tax Matters

JLM accounts for income taxes on a consolidated basis and accrues for tax
liabilities based on its U.S. earnings. The Company's foreign subsidiaries file
tax returns in the country where incorporated. To the extent these subsidiaries
are profitable, taxes are payable based on that country's prevailing tax rate.
Upon repatriation of non-U.S. earnings, the U.S. allows a foreign tax credit to
be applied against the Company's U.S. consolidated return for the foreign taxes
paid by the Company's foreign subsidiaries. If losses are incurred, countries in
which the Company's foreign subsidiaries are incorporated generally allow the
losses to be carried forward and applied against income earned in subsequent
years. The Company's Venezuelan operation has incurred losses which have
generated net operating loss carryforwards ("NOL's") and, based on Venezuelan
tax guidelines, these NOL's may be carried forward for three years. However,
these losses are not deductible for U.S. federal income tax purposes and as a
result cannot be offset against U.S. pre-tax profits.

In an effort to reduce its U.S. federal and state income tax liability, in
1994 the Company established a foreign sales corporation ("FSC"). Under the
Internal Revenue Code, FSCs are granted tax incentives for exporting U.S.
produced goods overseas, and as such, there are specific tax benefits to the
Company for the products it exports. If specific conditions are met under the
Internal Revenue Code, up to 65.0% of the commission income earned by the FSC
from these export transactions may be exempted from U.S. taxation. Since the
formation of the FSC, the Company has met these requirements, thereby reducing
its taxable income.

Phenol, Acetone and Propylene Pricing and Volumes

Phenol, acetone and propylene are the principal commodity chemicals sold by
JLM and together accounted for approximately 65.0% of revenues in 1996. Set
forth below, for the periods indicated, is certain information regarding the
Company's quarterly average selling prices and volumes for acetone, phenol and
propylene. The Company believes that, for the periods indicated, its average
selling prices have generally followed market prices, which are driven by
changes in the balance between supply and demand, the price of feedstocks and
the level of general economic activity. Results for any one or more periods are
not necessarily indicative of annual results or continuing trends.

20
<PAGE> 22

QUARTERLY SALES PRICE PER POUND AND VOLUME OF PRODUCT SOLD

<TABLE>
<CAPTION>
ACETONE PHENOL PROPYLENE
--------------- -------------- --------------
$ LBS $ LBS $ LBS
---- ----- ---- ---- ---- ----
(POUNDS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
1994
First quarter................................... 0.12 97.8 0.21 31.1 0.14 71.2
Second quarter.................................. 0.14 97.9 0.28 10.9 0.16 85.4
Third quarter................................... 0.16 97.6 0.27 9.8 0.24 38.9
Fourth quarter.................................. 0.24 77.6 0.31 8.1 0.30 56.6
1995
First quarter................................... 0.25 92.1 0.42 8.4 0.29 13.9
Second quarter.................................. 0.27 100.8 0.36 16.9 -- --
Third quarter................................... 0.30 93.6 0.33 30.3 0.20 5.5
Fourth quarter.................................. 0.30 101.7 0.30 33.6 0.13 9.2
1996
First quarter................................... 0.25 115.5 0.30 29.9 0.12 9.0
Second quarter.................................. 0.23 106.3 0.28 38.1 0.23 34.2
Third quarter................................... 0.20 110.0 0.34 30.1 0.22 12.4
Fourth quarter.................................. 0.19 92.1 0.36 31.9 0.20 42.1
1997
First quarter................................... 0.18 114.2 0.35 30.4 0.25 90.4
</TABLE>

Based upon information currently available to the Company, it is believed
that prices for acetone and phenol will strengthen during the remainder of 1997
and that propylene prices will show continued volatility. See
"Business -- Industry Overview."

RESULTS OF OPERATION

Three Months Ended March 31, 1997 Compared to Three Months Ended March 31,
1996

Revenues. Revenues increased $22.6 million to $80.5 million for the three
months ended March 31, 1997 from $57.9 million for the comparable period in
1996, an increase of 39.2%. Revenues for the marketing segment increased $24.2
million to $64.2 million for the three months ended March 31, 1997 from $40.0
million for the comparable period in 1996, an increase of 60.5%. The increase in
marketing segment revenues was principally the result of increased sales of
propylene, principally in Asia. Revenues for the manufacturing segment decreased
by $1.6 million to $16.3 million for the three months ended March 31, 1997 from
$17.9 million for the comparable period in 1996, a decrease of 8.6%. The
decrease in manufacturing segment revenues was principally the result of a
decline in selling prices for acetone, which was only partially offset by an
increase in selling prices for phenol. Sales volumes of acetone from the Mt.
Vernon Plant and acetone and phenol from the Blue Island Plant were
substantially the same for the three months ended March 31, 1997 and 1996.

Gross Profit. Gross profit increased $0.1 million to $6.8 million for the
three months ended March 31, 1997 from $6.7 million for the comparable period in
1996, an increase of 2.3%. As a percentage of revenues, gross profit decreased
to 8.5% for the three months ended March 31, 1997 from 11.6% for the comparable
period in 1996. Gross profit for the marketing segment increased $0.2 million to
$3.3 million for the three months ended March 31, 1997 from $3.1 million for the
comparable period in 1996, an increase of 6.9%, principally as a result of the
new terminaling arrangement with OTC (See Note 18 of Notes to Consolidated
Financial Statements). Gross profit for the manufacturing segment decreased by
$0.1 million to $3.6 million for the three months ended March 31, 1997 from $3.7
million for the comparable period in 1996, a decrease of 1.5%. The increase in
total gross profit was principally the result of increases in the selling prices
for phenol in the first quarter of 1997, reductions in manufacturing costs
associated with the successful implementation of a new manufacturing technique
in the production of cumene at the Blue Island Plant and a reduction in raw
material costs resulting from a successful hedge of its propylene purchases.
During the three months ended March 31, 1997, approximately 13 million pounds of
propylene purchases were covered by a fixed financial hedge for which the
Company had a gain of $492,970, which reduced its cost of sales for this period
by a corresponding amount. The reduction in cost of sales resulting from the
propylene hedge was partially offset by an increase in the cost of

21
<PAGE> 23

benzene, which the Company elected not to hedge. Gross profit in both the
manufacturing and marketing segments was also adversely impacted by decreases in
acetone selling prices.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased $0.1 million to $3.9 million for the three
months ended March 31, 1997 from $4.0 million for the comparable period in 1996,
a decrease of 2.4%. This decrease was principally as a result of reduced
compensation cost associated with a reduction in sales personnel.

Operating Income. Operating income increased $0.2 million to $2.9 million
for the three months ended March 31, 1997 from $2.7 million for the comparable
period in 1996, an increase of 9.5%. This increase was principally the result of
the factors that increased gross profit discussed above together with the
reduction in selling, general and administrative expenses achieved in the first
three months of 1997.

Interest Expense -- Net. Interest expense decreased slightly by $13,000 to
$628,000 for the three months ended March 31, 1997 from $641,000 for the
comparable period in 1996, a decrease of 2.0%.

Foreign Currency Exchange (Loss) Gain. Foreign currency exchange increased
$862,000 to a gain of $63,000 for the three months ended March 31, 1997 from a
loss of $799,000 for the comparable period in 1996. This gain was principally
the result of the Company's activities in Venezuela.

Income Tax Provision. The Company's provision for income taxes decreased
$0.2 million to $0.8 million for the three months ended March 31, 1997 from $1.0
million for the comparable period in 1996, a decrease of 13.8%. The Company's
effective tax rate for the three months ended March 31, 1997 was 36.0% as
compared to 99.5% for the comparable period of 1996. The rate for 1997 was
significantly lower than that of prior periods due to the increased proportion
of international sales associated with the Company's foreign sales corporation.
Excluding Venezuelan operations, the effective tax rate for the three months
ended March 31, 1997 would have been approximately 35.3% compared to the
effective tax rate for the three months ended March 31, 1996 of 46.9%.

Net Income. Net income increased $1.3 million to $1.5 million for the
three months ended March 31, 1997 from $0.2 million for the comparable period in
1996. The increase in net income was due to the factors stated above.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Revenues. Revenues decreased $52.9 million to $236.5 million for the year
ended December 31, 1996 from $289.4 million for the prior year, a decrease of
18.3%. Revenues for the marketing segment decreased $53.2 million to $176.3
million for the year ended December 31, 1996 from $229.5 million for the prior
year, a decrease of 23.2%. Substantially all of the decrease was a result of
changes made by the Company in its olefins marketing strategy to reduce its
exposure to shipping and handling charges. To a lesser extent, the decrease was
also attributable to a decrease of $12.9 million in opportunistic sales of
certain products in 1995 that did not recur in 1996 and a decrease in revenues
of $6.8 million from Venezuelan operations primarily as a result of the
devaluation of the local currency. These decreases more than offset the increase
in revenues of $9.0 million from a full year of the Company's European
operations in 1996 as compared to nine months in 1995. Revenues for the
manufacturing segment increased $0.3 million to $60.2 million for the year ended
December 31, 1996, from $59.9 million for the prior year, an increase of 0.6%.
This increase was principally the result of a decline in sale of acetone from
the Mt. Vernon Plant which was offset by the $17.8 million increase in sales
resulting from a full year of the Blue Island Plant's operations in 1996
compared to seven months in 1995.

Gross Profit. Gross profit increased $4.3 million to $28.2 million for the
year ended December 31, 1996 from $23.9 million for the prior year, an increase
of 18.1%. As a percentage of revenues, total gross profit increased to 11.9% in
1996 compared to 8.3% for the prior year, primarily due to the full-year
contribution of higher gross margin products from the Blue Island Plant and
higher distribution margins. Gross profit for the marketing segment increased
$1.0 million to $15.2 million for the year ended December 31, 1996, from $14.2
million for the prior year, an increase of 7.7%. Despite generally lower selling
prices on many products, margins were significantly higher in 1996 as compared
to the prior year principally as a result of the exercise by the Company of its
options on certain acetone sales contracts. Gross profit for the manufacturing
segment increased

22
<PAGE> 24

$3.2 million to $13.0 million for the year ended December 31, 1996 from $9.8
million for the prior year, an increase of 33.2%, primarily as a result of
including a full year of operations of the Blue Island Plant which generally
carry higher gross margins.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $2.0 million to $17.2 million for the year
ended December 31, 1996 from $15.2 million for the prior year, an increase of
13.6%. The increase was primarily the result of including a full year of
operations of the Blue Island Plant. To a lesser extent, the marketing segment
experienced increased distribution costs in 1996 as compared to 1995, which more
than offset reduced compensation costs for this period.

Operating Income. Operating income increased $2.3 million to $11.0 million
for the year ended December 31, 1996 from $8.7 million for the prior year an
increase of 26.0%. The increase was principally the result of the increase in
gross profit, which was partially offset by the increase in selling, general and
administrative expenses.

Interest Expense -- Net. Interest expense increased $1.0 million to $2.8
million for the year ended December 31, 1996 from $1.8 million for the prior
year principally due to the additional interest expense associated with the
inclusion of the Blue Island Plant for the full year and to a lesser extent to
increased borrowings used to fund working capital requirements associated with
the Company's marketing segment.

Foreign Currency Exchange (Loss) Gain. Foreign currency exchange decreased
$0.6 million to a loss of $0.5 million for the year ended December 31, 1996 from
a loss of $1.1 million for the prior year. Substantially all of these losses
were the result of the Company's activities in Venezuela. In December 1995, the
Company began using the market rate, in accordance with SFAS No. 52, to
recognize foreign currency exchange gains and losses for its Venezuelan
subsidiary rather than using the official Venezuelan rate. The effect of using
the market rate resulted in an additional $0.4 million foreign exchange loss
during 1995. During the first quarter of 1996, the market rate for U.S. dollars
rose from 350 to 470 bolivars per dollar, at which time it stabilized for the
remainder of 1996. See "Effect of Inflation; Foreign Currency Exchange Rates"
discussed below.

Income Tax Provision. The Company's provision for income taxes increased
$1.0 million to $3.4 million for the year ended December 31, 1996 from $2.4
million for the prior year, an increase of 40.6%, principally as a result of the
Company's inability to apply $1.2 million of pre-tax losses from its Venezuelan
operations to reduce its U.S. taxable income. The Company's effective income tax
rate increased to 44.4% for 1996 as compared to 40.1% for 1995.

Net Income. Net income increased $0.7 million to $3.9 million for the year
ended December 31, 1996 from $3.2 million for the prior year, an increase of
23.5%, principally as a result of the factors discussed above.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Revenues. Revenues increased $70.8 million to $289.4 million for the year
ended December 31, 1995 from $218.6 million for the prior year, an increase of
32.4%. Revenues for the marketing segment increased $35.7 million to $229.5
million for the year ended December 31, 1995 from $193.8 million for the prior
year, an increase of 18.4%. The increase in the marketing segment's revenues
resulted primarily from the start-up of the Company's European subsidiary in
April 1995, and from the expansion of the Company's Venezuelan operations. In
addition, the marketing segment benefitted from higher sales volumes and selling
prices of its two largest products, acetone and phenol. Revenues for the
manufacturing segment increased $35.2 million to $59.9 million for the year
ended December 31, 1995 from $24.7 million for the prior year, an increase of
142.0%. The increase in manufacturing segment revenues was principally the
result of increased selling prices for acetone from the Mt. Vernon Plant and the
inclusion of seven months of operations of the Blue Island Plant after its
acquisition in June 1995.

Gross Profit. Gross profit increased $12.2 million to $23.9 million for
the year ended December 31, 1995 from $11.7 million for the prior year, an
increase of 105.0%. The marketing segment's gross profit increased $5.2 million
to $14.2 million for the year ended December 31, 1995 from $8.9 million for the
prior year, an increase of 58.7% as a result of increased revenues as explained
above and higher margins. As a percentage of revenues, total gross profit
increased to 8.3% in 1995 as compared to 5.3% for 1994 primarily as a result of
the higher gross

23
<PAGE> 25

margins of the Company's manufacturing segment and Venezuelan operations. The
manufacturing segment's gross profit increased $7.1 million to $9.8 million for
the year ended December 31, 1995 from $2.7 million for the prior year, an
increase of 255.5%, primarily resulting from including operations of the Blue
Island Plant for a portion of the year.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $5.9 million to $15.2 million for the year
ended December 31, 1995 from $9.3 million for the prior year, an increase of
63.5%, primarily as a result of including the expenses associated with the Blue
Island Plant and the expansion of JLM's international operations, principally in
Venezuela as described above.

Operating Income. Operating income increased $6.3 million to $8.7 million
for the year ended December 31, 1995 from $2.4 million for the prior year, an
increase of 266.5%. The increase was primarily due to including the operations
of the Blue Island Plant which more than offset the increase in selling, general
and administrative expenses.

Interest Expense -- Net. Interest expense increased $1.4 million to $1.8
million for the year ended December 31, 1995 from $0.4 million for the prior
year. The increase was principally the result of the borrowings made to effect
the acquisition of the Blue Island Plant and to a lesser extent the result of
increased borrowings used to fund working capital requirements associated with
the expanded marketing segment.

Foreign Currency Exchange (Loss) Gain. Foreign currency exchange increased
$0.8 million to a loss of $1.1 million for the year ended December 31, 1995 from
a loss of $0.3 million for the prior year. The loss was primarily due to
Venezuelan operations.

Income Taxes. The Company's provision for income taxes increased $1.4
million to $2.4 million for the year ended December 31, 1995 from $1.0 million
for the prior year, an increase of 149.7%, principally due to the increase in
income. The Company's effective income tax rate decreased to 40.1% in 1995 as
compared to 45.1% in 1994, as a result of the increase in foreign currency loss
which is not deductible for tax purposes.

Net Income. Net income increased $2.1 million to $3.2 million for the year
ended December 31, 1995 from $1.1 million for the prior year, an increase of
203.3%. The increase in net income was due to the factors stated above.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities increased $2.3 million to $5.9
million for the period ended March 31, 1997 from $3.6 million for the prior
period in 1996. This increase was primarily the result of increases in the
Company's working capital accounts which more than offset an increase in net
income of $1.2 million. Net cash used in investing activities decreased $1.1
million to $0.4 million for the period ended March 31, 1997 from $1.5 million
for the prior period in 1996.

Net cash provided by financing activities increased $3.1 million to $7.5
million for the period ended March 31, 1997 as compared to $4.4 million provided
in the prior period of 1996. As of March 31, 1997, the Company had net
borrowings on its loans payable and long-term debt of $7.6 million. For the
period ended March 31, 1997, Aurora and Phoenix made distributions to their
stockholders of $73,698. As of March 31, 1997, the Company had a borrowing
capacity of $21.0 million under various credit agreements as described in Note 7
of Notes to the Consolidated Financial Statements.

Net cash provided by operating activities decreased $2.7 million to $26,402
for the year ended December 31, 1996 as compared to $2.7 million in the prior
year. This decrease was primarily the result of changes in the Company's working
capital accounts which more than offset an increase in net income of $0.7
million. Net cash used in investing activities increased $1.9 million to $6.6
million for the year ended December 31, 1996 as compared to $4.7 million the
prior year. In 1996, $7.3 million of cash was used for capital expenditures as
compared to $2.3 million in the prior year. In 1996, $3.7 million of the capital
expenditures related to the zeolite efficiency upgrades at the Blue Island
Plant. The Company also received proceeds of $0.8 million in 1996 in connection
with the sale of certain assets held for sale.

24
<PAGE> 26

Net cash provided by financing activities increased $7.2 million to $6.7
million for the year ended December 31, 1996 compared to $0.5 million used in
the prior year. In 1996, the Company had net borrowings on its loans payable,
long-term debt and stockholder loans of $7.2 million. In addition, Aurora and
Phoenix made distributions to their stockholders of $0.5 million. As of December
31, 1996, the Company had a borrowing capacity of $38.2 million under various
credit agreements as described in Note 7 of Notes to the Consolidated Financial
Statements.

Concurrent with the Offering, the Company will repay $17.0 million of
outstanding indebtedness and expects to have available borrowing capacity of
$52.8 million under its credit agreements. The Company will also have $8.4
million of available cash on hand. For information regarding the material terms
of the Company's credit facilities, see Notes 7 and 8 to Notes to Consolidated
Financial Statements.

The Company is currently constructing an additional storage tank at the JLM
Terminal. The proposed storage tank will increase JLM's current storage capacity
at the JLM Terminal by 3 million pounds. The Company expects construction on the
storage tank to be completed in July 1997 with a total anticipated construction
cost of $0.6 million. Costs associated with evaluation, planning, design and
construction are ongoing and have been funded through the Company's current
credit facilities.

In April 1997, the Company entered into an agreement to purchase a 12.7%
interest in SK Chemical Trading Pte. Ltd. The agreement provides that upon
commencing construction of a chemical plant in Vietnam, the Company is required
to pay an additional $0.5 million as additional consideration for its ownership
interest in SK Chemical Trading Pte. Ltd. The Company expects to fund this
payment through the Company's current credit facilities. See
"Business -- Business Strategy."

JLM believes its liquidity and capital resources, including its ability to
borrow additional amounts under its credit agreements, are sufficient to meet
its needs for the foreseeable future and to permit it to continue to implement
its business strategy.

ENVIRONMENTAL

It is the Company's policy to comply with all Environmental Laws and the
Company believes that it is currently in substantial compliance with all
applicable Environmental Laws pertaining to the operations of its facilities and
treatment of wastes that are generated by operations at those facilities. In
1996, the Company's expenditures relating to maintaining compliance with
Environmental Laws were approximately $0.7 million. In 1997, the Company has
budgeted approximately $1.2 million for environmental compliance costs
consisting of approximately $0.5 million for a one-time capital expenditure
relating to the installation of a thermal oxidizer at the Blue Island Plant in
response to new regulatory requirements and approximately $0.7 million of
expenditures relating to ongoing compliance with Environmental Laws. These
expenditures will be funded primarily from cash flow from operations. There can
be no assurance, however, that the actual levels of expenditures relating to
environmental compliance will not exceed the budgeted amounts either as a result
of changes in Environmental Laws to make them more stringent or the discovery of
any additional or unknown environmental confirmations relating to the Company's
operations. Any requirement compelling the Company to spend significant amounts
in excess of those budgeted for environmental compliance matters could have a
material adverse effect on the Company's financial condition or results of
operations.

Elevated levels of certain petroleum-related substances, organic chemicals
and metals, which the Company believes are a result of either use by the prior
owner of the site and/or migration from neighboring facilities, have been
detected in groundwater and/or soils at the JLM Terminal. The prior owner of the
site is currently implementing remedial work to address onsite petroleum
contamination and has agreed to indemnify the Company for up to $7.5 million for
environmental liabilities at the JLM Terminal. Low levels of various organic
compounds, which are the result of either historical use of the site prior to
the Company's acquisition thereof and/or migration from neighboring facilities
have also been detected in the soils and groundwater at the Blue Island Plant.
However the Company has not been required, and it does not believe that it will
be required, to plan, undertake, or fund any remedial activities at the Blue
Island Plant. Low levels of organic compounds slightly in excess of regulatory
reporting thresholds were detected in the ground water at the Company's Polychem
facility. The Company has been addressing the environmental issues that exist at
that facility and analytical data most

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recently collected indicate very low levels of target contaminants. The Company
is presently investigating whether the site should remain on the list of
Hazardous Sites Inventory.

The Company does not currently believe that a material amount of funds will
be required to complete remediation at any site. If the Company is required to
conduct remediation at the Blue Island Plant or remediation for which it is not
indemnified at the JLM Terminal or to complete remediation at the Polychem
facility, however, the level of expenditure that may be required to satisfy the
Company's environmental liabilities could have a material adverse effect on its
financial condition or results of operations. See "Business -- Environmental
Regulation."

EFFECT OF INFLATION; FOREIGN CURRENCY EXCHANGE RATES

Inflation generally affects the Company by increasing the cost of labor,
equipment and raw materials. The Company does not believe that inflation has had
any material effect on the Company's business over the last three years.

A portion of the Company's revenues are denominated in foreign currencies,
principally Venezuelan bolivars, Dutch gilders and Canadian dollars. As a
result, the Company's operations may be effected by exchange rate fluctuations.
If foreign currency denominated revenues are greater than costs, the translation
of foreign currency denominated costs and revenues into U.S. dollars will
improve profitability when the foreign currency strengthens against the U.S.
dollar and will reduce profitability when the foreign currency weakens. In
addition, the remeasurement of foreign currency denominated assets and
liabilities into U.S. dollars gives rise to foreign exchange gains or losses
which are included in the determination of net income. The Company attempts to
monitor its exposure to currency fluctuations by continuously reviewing actual
and anticipated changes in the exchange rate between the U.S. dollar and the
principal foreign currencies in which portions of the Company's revenues are
denominated. The Company also analyzes the actual and anticipated economic
condition in each of the foreign countries in which it has operations, as well
as its own actual and anticipated sources and uses of foreign currencies.

In instances where the Company has entered into an agreement either
obligating it to make a payment in a foreign currency or entitling it to receive
a payment in a foreign currency, the Company may enter into a forward currency
contract to eliminate the effect of foreign currency fluctuations on such
payables or receivables. The Company only enters into forward foreign exchange
contracts with respect to specific payables and receivables and such contracts
only involve amounts equal to the amount of such payables and receivables.
Accordingly, the Company generally does not realize any gain or loss on account
of such contracts.

In May 1994, the Venezuelan government, following a period of rapid
devaluation in their currency, the bolivar, implemented certain exchange
controls including a frozen exchange rate for converting the bolivar into other
currencies. This "official" rate was initially established at 170 bolivars per
U.S. dollar. In December 1995, the Venezuelan government changed the official
exchange rate to 290. In April 1996, the exchange controls were lifted, and the
exchange rate immediately rose to 470 bolivars per U.S. dollar, remaining in a
range of 470 to 480 through December 1996. These periods of devaluation in the
bolivar adversely impacted JLM's Venezuelan operating results by lowering profit
margins and generating foreign currency losses which are reported in the
Consolidated Financial Statements. As of the date hereof, the bolivar has
remained relatively stable during the last 12 months.

EFFECT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board recently issued SFAS No. 128,
Earnings Per Share. The objective of SFAS No. 128 is to simplify the computation
of earnings per share and to make the U.S. standard for computing earnings per
share more compatible with the earnings per share standards of other countries.
JLM does not anticipate that SFAS No. 128 will have a significant impact on pro
forma income per share.

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BUSINESS

OVERVIEW

JLM is a leading marketer and distributor of certain commodity chemicals,
principally acetone and phenol. The Company believes that it is the second
largest marketer of acetone and the fifth largest supplier of phenol in North
America. JLM is also a global distributor of olefins, principally propylene, as
well as a variety of other commodity and specialty chemicals. In order to
provide stable and reliable sources of supply for its products, the Company (i)
maintains long-established supplier relationships with several major chemical
companies (ii) manufactures phenol and acetone at its Blue Island Plant and
(iii) sources acetone from its joint venture manufacturing operation. The
Company's principal products, acetone, phenol and propylene are used in the
production of adhesives, coatings, forest product resins, paints,
pharmaceuticals, plastics, solvents and synthetic rubbers. The Company sells its
products worldwide to over 600 customers including Ashland Chemical, Inc.
("Ashland"), B.F. Goodrich Co. ("B.F. Goodrich"), Borden, Inc. ("Borden"),
Hoechst Celanese Corporation, E.I. DuPont de Nemours and Company ("DuPont"),
Dutch State Mines ("DSM"), Eli Lilly & Co., Georgia Pacific Corporation
("Georgia Pacific"), ICI Acrylics Inc. ("ICI Acrylics"), Minnesota, Mining and
Manufacturing Company, Neste Resins Corporation ("Neste"), Rohm & Haas Company
("Rohm & Haas") and Shell Chemicals Canada, Inc. ("Shell Chemicals Canada").

In 1977, John L. Macdonald, the Chief Executive Officer and President of
the Company, co-founded Gill and Duffus Chemicals, Inc., the domestic chemical
trading operation of the London-based Gill and Duffus Holding PLC. As part of a
management buy-out in 1982, Mr. Macdonald purchased Gill and Duffus Chemicals,
Inc., and subsequently merged into Steuber Company, Inc., the domestic
operations of the Steuber Group, a worldwide chemical distribution company. In
1986, Mr. Macdonald purchased the U.S. assets of the Steuber Group and formed
JLM as the successor.

Since 1986, the Company has grown rapidly by expanding its product sourcing
arrangements and product offerings, acquiring manufacturing and terminaling
facilities and providing superior customer service and product quality and
availability. Among the Company's most significant corporate milestones are (i)
its investment in 1987 in the Mt. Vernon Partnership, (ii) the formation in 1992
of OTC, (iii) the acquisition of the JLM Terminal in 1992 and (iv) the
acquisition of Blue Island Plant in 1995. In addition, the Company entered into
its first exclusive marketing agreement with Sasol Chemical Industries (PTY)
Ltd. (South Africa) ("SasolChem") in 1987 and began its expansion into the
international markets with the opening of offices in Canada in 1987, Venezuela
in 1992 and Europe in 1995.

INDUSTRY OVERVIEW

Phenol

Phenol is produced through the oxidation of cumene, which is produced from
propylene and benzene. Acetone is produced as a co-product during this
manufacturing process in the approximate ratio of 0.6 pounds of acetone for
every 1.0 pound of phenol. Approximately 80.0% of global acetone production is
produced as a co-product in the manufacture of phenol, and, as a result, phenol
demand largely determines acetone production levels. The markets for phenol and
acetone are cyclical and sensitive to changes in the balance between supply and
demand, the price of feedstocks and the level of general economic activity.

According to industry sources, current world phenol capacity is
approximately 13.8 billion pounds (4.5 billion pounds in North America). The two
largest end markets for phenol are phenolic resins, which is the Company's only
market for phenol, and bisphenol A ("BPA"). Phenolic resins are used extensively
as bonding agents and adhesives for wood products such as plywood and granulated
wood panels, and account for approximately 37.0% of total phenol demand. BPA is
used as a raw material in the manufacture of high performance plastics such as
those used in automobiles, household appliances, electronics and protective
coatings applications. BPA, the fastest growing application for phenol,
currently accounts for approximately 28.0% of phenol demand and is expected to
grow to approximately 33.0% by the year 2000. Phenol for the production of BPA
requires a greater degree of purification and is produced almost exclusively by
manufacturers of BPA for their internal consumption. Any phenol not consumed
internally by such manufacturers generally is sold to other

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end users. The Company believes sales of excess phenol by BPA producers will be
relatively limited as the demand for BPA continues to increase, which should
have a positive effect on phenol prices generally.

Phenol selling prices and margins were at cyclical highs during 1995 and
1996. The Company expects worldwide and North American phenol demand to grow by
approximately 3.2% and 2.5% per year, respectively, through 1999. The growth in
demand is anticipated to be highest in Southeast Asia and, to a lesser extent,
the United States. The Company also expects there to be little change in the
levels of phenol production through 1998. As a result, production utilization
rates should remain relatively high. Capacity expansions by several major phenol
producers of approximately 3 billion pounds worldwide (1.2 billion pounds in the
U.S.) starting in the year 2000 have recently been announced. It is unclear how
many of these projects will ultimately be completed and the Company believes
that it is possible that some of these announced capacity additions will not be
built as scheduled.

Acetone

The largest end market for acetone is as a raw material in the production
of methyl methacrylate ("MMA"), which is used as a chemical intermediate to
produce acrylic sheeting and other chemical products, and as an ingredient for
surface coating resins for the automotive and construction markets. Acetone is
also used as a raw material in the production of BPA and as an industrial
solvent.

The U.S. Federal government has recently exempted acetone from all
regulations as a volatile organic compound ("VOC"). To date, 32 states have
followed the Federal government's ruling and the Company expects acetone to be
exempted from VOC regulation by all 50 states in the near future. The Company
believes that the exemption of acetone from VOC regulation will lead to
increased demand for acetone based coatings and solvents.

According to industry sources, current world acetone production capacity is
approximately 8.5 billion pounds (2.9 billion pounds in North America). Selling
prices and margins for acetone were at cyclical highs in 1995 and early 1996,
similar to those for phenol, driven by growth in the use of acetone for the
production of MMA, BPA (for engineering plastics), and a rejuvenated market for
acetone based solvents. World demand is expected to grow approximately 2.5%
annually through 1999. Recently announced capacity additions in Europe and the
U.S. for phenol, if completed, would increase the capability for acetone
production, which could be partially offset by closure of on-purpose production
over the next few years. The Company expects acetone demand in North America to
grow approximately 2.8% annually through 1999, driven primarily by growth in the
BPA market of approximately 4.9% annually, renewed growth in acetone-based
solvents of 3.0% annually, and a continued recovery in the MMA market.

Propylene

According to industry sources, current world propylene capacity is
approximately 100 billion pounds with global demand for propylene expected to
grow approximately 5.0% per year through 1999. North American capacity is
currently approximately 30 billion pounds with North American demand expected to
grow approximately 2.5% per year through 1999. The U.S. is expected to take a
significant role in producing and sourcing propylene to international consumers.

Over 50.0% of globally produced propylene is used in the manufacture of
polypropylene which, in turn, is used primarily in plastic film and molded parts
in consumer items, including automobile components, brushes, carpeting, rope and
tape.

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BUSINESS STRATEGY

The Company's principal objective is to continue to expand the number of
sources and breadth of its chemical products and the markets in which it
distributes these products to enhance its position as a leading supplier to the
worldwide chemical industry. Key elements of the Company's business strategy
include:

- Expand Sources of Supply through Joint Ventures, Acquisitions and
Strategic Relationships. The Company will continue to seek to identify
and pursue domestic and international opportunities to expand its sources
of supply for products in or consistent with its core business. These
opportunities may include additional joint ventures, acquisitions and
strategic relationships. Consistent with this strategy, the Company formed
the Mt. Vernon joint venture with General Electric Company ("GE ") and an
affiliate of CITGO in 1987, acquired the Blue Island Plant in 1995 and
established a long term supplier relationship with SasolChem in 1988.
Certain phenol producers have recently announced their intentions to add
approximately 3 billion pounds of annual production capacity starting in
the year 2000. JLM is currently exploring opportunities to participate in
certain of these expansions in order to secure additional sources of
phenol and acetone.

- Increase Sales of Existing Products; Add New Products. The Company will
continue to develop its existing relationships and establish new
relationships to increase the overall volume and types of products it
distributes by (i) increasing the amount distributed by the Company of an
existing supplier's output of a given chemical, (ii) distributing
additional products for existing suppliers and (iii) adding new chemical
producers to its supplier base. During 1996, the Company entered into
agreements to distribute approximately 70 million additional pounds of
chemicals for both existing and new suppliers in 1997, including ARCO
Chemical Company ("ARCO Chemical"), Goodyear Tire & Rubber Co.
("Goodyear") and Monsanto Company ("Monsanto"). In addition, the Company
recently expanded the product line it distributes for SasolChem. To date
in 1997, the Company has entered into agreements with CONDEA Vista Company
("CONDEA Vista") to distribute butanol and with GE Plastics to become a
U.S. distributor of styrene.

- Continue International Expansion. The Company currently has
international operations in South America, Europe and Asia. JLM intends to
continue to utilize its chemical market experience, distribution and
logistics capabilities and industry relationships to increase its
international presence, particularly in the growing chemical markets of
Asia and South America. JLM recently purchased a minority interest in SK
Asia and has agreed to purchase a minority interest in SK Trading, both of
which are participating in a Vietnamese joint venture that intends to
construct a chemical plant in Vietnam that will produce dioctyl phthlate,
a chemical used in the manufacture of plastics such as PVC. The Vietnamese
joint venture also intends to construct terminaling and storage facilities
in Vietnam and Malaysia. The Company believes that its indirect
participation in the Vietnamese joint venture also will provide it with
increased access to the Asian market.

PRODUCTS AND CUSTOMERS

JLM markets more than 50 chemical products to over 600 customers worldwide.
In 1996, sales of acetone, phenol and propylene accounted for approximately
65.0% of the Company's total revenues. Set forth below is certain information
about the Company's sales of acetone, phenol, propylene and certain other
products, including representative customers for such products.

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<PAGE> 31

Acetone

In 1996, JLM distributed approximately 424 million pounds of acetone, of
which approximately 63.0% was sourced from the Blue Island Plant and the Mt.
Vernon Plant. The largest end market application of acetone is as a raw material
in the production of MMA, an important chemical intermediate used to make
aircraft windows, lighting fixtures, medical/dental parts, storm doors and
taillight lenses. Additional end market applications for acetone include
adhesives, pharmaceuticals, solvents, paints and plastics. JLM's acetone
customers include Ashland, B.F. Goodrich, DuPont, ICI Acrylics and Rohm & Haas.

Phenol

In 1996, the Company distributed approximately 130 million pounds of
phenol, of which approximately 74.0% was sourced from the Blue Island Plant. The
two largest end market applications for phenol are phenolic resins, which are
used in adhesives and bonding agents in plywood and other forest products, and
BPA. JLM's phenol customers include Borden, Georgia Pacific and Neste.

Propylene

In 1996, the Company distributed approximately 98 million pounds of
propylene. The largest end market application for propylene is as a raw material
in the production of polypropylene which is used in the manufacture of appliance
parts, automobile components, brushes, carpeting, rope and tape. Propylene is
also used in the production of foams for furniture, insulation, elastomers,
molded goods and pharmaceuticals. The Company also markets other olefins,
including butadiene and ethylene. The Company's significant olefins customers
include Dupont, Exxon Corporation ("Exxon"), GE and Goodyear. JLM's propylene
customers include Borealis Exploration Limited, DSM and The Dow Chemical
Corporation ("Dow Chemical").

Other Products

In addition to acetone, phenol and propylene, the Company markets and
distributes other commodity and specialty chemicals including acetophenone,
benzoic acid, butadiene, cumene, DDVP, esters, ethylene, fumaric acid, ketones,
lindane and methanol. Certain of JLM's customers for such products include BASF
Corp., Dow Chemical, DSM, Goodyear, Lilly Industries Inc., PPG Industries Inc.,
Repsol, S.A. (Spain) ("Repsol") and Shell Chemicals Canada.

During each of the past three years, no single distribution relationship,
customer or group of affiliated customers has accounted for more than 10.0% of
the Company's revenues.

MANUFACTURING AND PRODUCT SOURCING

In order to support its worldwide marketing and distribution capabilities,
the Company continually seeks to acquire assets and establish relationships to
provide consistent and reliable sources of products. JLM sources a majority of
its products from its Blue Island Plant and the Mt. Vernon Plant. In 1996, the
Blue Island Plant and Mt. Vernon Plant collectively supplied approximately 63.0%
of the total acetone sold by JLM and the Blue Island Plant supplied
approximately 74.0% of the total phenol sold by JLM.

Blue Island

The Company manufactures cumene, phenol, acetone and certain co-products
including alpha methyl styrene ("AMS") and acetophenone at the Blue Island
Plant. The Blue Island Plant has an annual manufacturing capacity of
approximately 145 million pounds of cumene, 95 million pounds of phenol, 58
million pounds of acetone, 5 million pounds of AMS and 1 million pounds of
acetophenone. The phenol produced at the Blue Island Plant can only be used in
the production of phenolic resins and not in the production of BPA.

The Blue Island Plant is strategically located south of Chicago, Illinois,
near primary barge and rail transportation terminals that facilitate economic
and efficient delivery of raw materials and shipment of finished products. In
addition, this location affords the Company significant freight cost advantages
in servicing its

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customer base (which is primarily located in the Midwest) in comparison to
competitors located on the U.S. Gulf Coast.

The Blue Island Plant utilizes a newly installed state-of-the-art UOP
zeolite catalyst to produce cumene, the key raw material used to manufacture
phenol and acetone. This process has improved the efficiency, profitability and
quality of the cumene production and has eliminated the need to purchase
supplemental cumene from outside sources. Additionally, the new technology has
improved the purity of the Company's AMS and, as a result, the Company's average
margin for AMS has increased significantly.

The raw materials required for the production of cumene are propylene and
benzene. The Company, under a long-term supply agreement which expires in 2005,
obtains propylene via direct pipeline from the Clark Oil refinery located
adjacent to the Blue Island Plant. The Company believes that the terms of its
propylene supply contract provide it with a significant raw material cost
advantage over many of its competitors, in part because the Company does not
have to pay for any transportation costs for the propylene purchased under the
supply agreement. The Company purchases benzene from three major petrochemical
producers, generally under supply contracts at market rates.

Currently, the Blue Island Plant is operating at full capacity and in order
to economically expand production capacity, it would be necessary to increase
its capacity to that of a worldscale facility. However, physical limitations at
the Blue Island Plant prohibit such an increase and as a result the Company has
no plans to expand the Blue Island Plant. The Company is continually exploring
opportunities to expand its manufacturing capabilities through acquisitions or
joint ventures. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity."

Mt. Vernon Partnership

In addition to its ownership of the Blue Island Plant, JLM participates in
a manufacturing joint venture with GE and an affiliate of CITGO (the "Mt. Vernon
Partnership") which owns and operates the Mt. Vernon Plant. The Company owns a
2.0% partnership interest in the Mt. Vernon Partnership, an Indiana limited
partnership, that was formed to purchase the Mt. Vernon Plant from GE in
November 1987. The Company's principal purpose for entering into the partnership
was to secure a long-term source of supply for acetone. In 1988, the Company
entered into a long-term acetone sales agreement with the Mt. Vernon
Partnership. Under the terms of the acetone agreement, the Company is obligated
through the year 2002, and thereafter unless the agreement is terminated upon
prior notice, to purchase all of the acetone produced at the Mt. Vernon Plant
and not consumed by GE Petrochemicals, Inc. ("GE Plastics"). The agreement
further provides that the Mt. Vernon Partnership cannot terminate the agreement
as long as JLM is a partner in the Mt. Vernon Partnership. The initial term of
this agreement expires in 2002 and continues thereafter for successive one-year
terms unless one year's notice is otherwise provided by either party.

The Company has been since 1988 and believes that it will in the future be
able to continue to profitably market all the acetone offered to it under this
agreement. Since 1994, the Company has sourced on average approximately 250
million pounds of acetone annually from the Mt. Vernon Plant. In 1996, the
amount of acetone available to JLM from the Mt. Vernon Plant was reduced by
approximately 15 million pounds and it is anticipated over the next four years
that the amount of acetone available to JLM will be further reduced by
approximately 35 to 40 million pounds as a result of increased consumption by GE
Plastics.

Under the terms of the partnership agreement for the Mt. Vernon
Partnership, the management of the business and affairs of the partnership is
controlled by the partners owning at least 66.0% of the partnership interests.
The Mt. Vernon Partnership has entered into an operation and maintenance
agreement with GE pursuant to which GE manages, operates and maintains the Mt.
Vernon Plant. The partnership agreement generally provides GE with the right at
any time to require the sale of JLM's interest in the Mt. Vernon Partnership to
a third party selected by GE and the right after December 31, 2008 to directly
purchase JLM's interest in the partnership.

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Supplier Relationships

In addition to its manufacturing facility and joint venture, JLM sources
its products through long-established supplier relationships with many of the
largest and most well-known chemical companies worldwide. Suppliers to JLM
include ARCO Chemicals, Goodyear, Monsanto, Repsol and SasolChem. The structure
of the Company's long-term relationships with its outside suppliers helps the
Company mitigate the impact of cyclical market fluctuations in product supply
and price to which typical spot traders or distributors are exposed. In a
majority of JLM's supply contracts, the purchase price paid by JLM is not
determined until after JLM sells the product, and is generally based on a fixed
percentage profit per unit of product sold. In contrast, the typical spot trader
or distributor may agree to a fixed purchase price prior to the sale, taking the
market risk of effecting a successful resale of the product. In addition, spot
traders do not typically enter into long-term supply contracts or relationships,
thereby reducing their ability to service the needs of both customers and
suppliers.

In 1988, the Company entered into an agreement to purchase acetone from
SasolChem, which was to remain in effect until either party gave six months
notice of termination. In 1992, the Company entered into new agreements with
SasolChem to purchase additional quantities of acetone, methyl-ethyl ketone and
n-propanol. These new agreements are on terms substantially similar to its
existing acetone agreement with SasolChem. The Company has since expanded its
relationship with SasolChem to include the purchase and distribution of methyl-
isobutyl ketone and ethanol in North America.

The Company has recently entered into an agreement to distribute styrene
monomer for GE Plastics. Styrene is the primary component used in the production
of synthetic rubbers and plastics. Additionally, the Company has entered into
agreements with ARCO Chemical Company, CONDEA Vista and Monsanto to distribute
n-propanol, butanol and ethyl acetate, respectively.

TERMINALING AND STORAGE

The Company, with an affiliate of UDS, participates in a joint venture
which owns and operates the OTC Terminal at the mouth of the Houston, Texas ship
channel in Bayport, Texas. The facility is located on 2.4 acres of land and has
throughput capacity of approximately 900 million pounds. The facility includes
twin storage spheres with a total capacity of approximately 22 million pounds of
propylene and is capable of handling and storing gaseous products at a full
range of temperature and pressure conditions. The OTC Terminal is believed to be
the only independent propylene export terminal in the U.S. and its Gulf Coast
location is well suited to enable U.S. producers to place their products into
the global market. See "Properties."

The OTC Terminal is operated by Baytank (Houston) Inc. ("Baytank"), a major
terminal owner and operator, under a long-term contract. OTC also leases from
Baytank the land upon which the OTC Terminal is located. The Company has been
engaged by OTC to provide certain administrative and managerial services to OTC,
including on-site supervision of terminal operations and certain bookkeeping and
administrative matters.

The Company has additional terminal and storage facilities located at the
JLM Terminal on the Cape Fear River in Wilmington, North Carolina. The JLM
Terminal is located on 14 acres of land, is accessible to ship, barge, rail and
truck, is capable of handling a broad range of products including methanol,
oxygenated solvents and inorganic chemicals, and has a total capacity of 15
million gallons. The facility includes three tank truck loading bays, six
loading bays for jumbo rail cars, laboratory services and a computerized weigh
scale. Of the total storage capacity at the JLM Terminal, approximately 2.5
million gallons of capacity are used by the Company and the remainder are
subject to long-term leases to third parties expiring from 1998 to 2002. See
"Properties."

The Company maintains inventory at approximately 15 locations across North
America and in a number of locations in Europe and South America. In addition to
the Company's owned terminal and storage facilities located at the JLM Terminal
and OTC Terminal, the Company has approximately 3.5 million gallons of liquid
storage capacity and approximately 500,000 pounds of palletized storage capacity
pursuant to short-term leases at various locations in the U.S. The Company
believes its storage facilities are adequate for the Company's current and
anticipated near-term needs. Should the need arise for substantial amounts of
additional storage facilities in the future, the Company does not currently
anticipate any material difficulties in obtaining sufficient new storage
facilities through purchase or lease at prevailing commercially reasonable
rates. The Company operates a fleet of

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more than 100 rail cars and has long-term working relationships with a number of
national barge lines and tank truck carriers. See "Properties."

SALES AND MARKETING

The Company focuses on bulk quantity sales (generally not smaller than
truck load lots) of commodity chemicals to over 600 customers worldwide in a
broad range of industries. Product sourcing and marketing efforts are handled
principally by the Company's sales team of 33 full time employees. Individual
salespersons are assigned principal responsibility for specific supplier or
customer relationships and for specific products. In addition, each salesperson
is required to be familiar with all of the Company's products, suppliers and
customers. As a result, the Company believes it is able to respond to customer
and supplier needs as well as to take advantage of changing market conditions
more effectively than its competitors.

JLM maintains offices in the U.S., Canada, the Netherlands, Venezuela and
Thailand and recently opened two affiliate offices in India and one in Columbia.
JLM also has an alliance with a distributor in Spain and operates through agency
relationships in Italy, Brazil, Peru and Taiwan. In addition, the Company
recently purchased a 25.0% interest in SK Asia, and has agreed to purchase a
12.7% interest in SK Trading, two Singapore-based companies participating in a
Vietnamese joint venture. The Vietnamese joint venture intends to construct a
chemical plant in Vietnam that will produce dioctyl phthlate, a chemical used in
the production of plastics such as PVC. The Vietnamese joint venture also
intends to construct terminaling and storage facilities in Vietnam and Malaysia.

Approximately 2.7% of the Company's revenues in 1996 were from sales of
specialty chemicals. Prices for specialty chemicals are generally subject to
smaller fluctuations than are those for commodity chemicals and specialty
chemical sales generally carry higher gross margins. In establishing supply and
distribution relationships in specialty chemicals, the Company attempts to
leverage existing relationships and knowledge of the needs and objectives of
both suppliers and customers.

The Company's position as a large volume marketer, combined with JLM's
knowledge of customer and supplier needs and objectives, affords it
opportunities to effect product exchanges. Engaging in product exchange
transactions allows the Company to solve customer or supplier problems and take
profitable advantage of identified market trends. The Company's ability to
engage in swap transactions is enhanced by its terminal and storage capabilities
which also enable the Company to accumulate inventory to take advantage of
market trends.

In its olefins marketing activities, JLM focuses on the international
marketing of olefin petrochemical gases which require specialized shipping,
handling and storage. The Company's olefins marketing activities to date have
been largely trading oriented. However, the Company believes that its long-term
relationships with key industry participants and its access to terminal and
storage facilities will enable the Company to become a large volume marketer of
olefins. The Company has long-term supply and sales contracts with a number of
major olefins producers and consumers in North America, South America, Europe
and Asia. For example, the Company has supply relationships with Repsol and
Copene-Petroquimica do Nordeste S.A. to source butadiene for the U.S. and with
UDS, Exxon and Lyondell Petrochemical Company to export propylene from the U.S.
Some of the Company's significant olefins customers include DuPont, Exxon, GE
and Goodyear.

COMPETITION

The Company operates in a highly competitive industry. Many of the
Company's competitors have significantly greater financial, production and other
resources than the Company. Many of the Company's competitors are large,
integrated chemical manufacturers, some of whom have their own basic raw
material resources. The Company competes to a lesser extent with certain
chemical distribution companies and chemical traders.

The Company competes in its marketing and distribution activities by
providing superior customer service. In the opinion of the Company, the key
elements of effective customer service include reliable and timely delivery of
products, satisfying customer needs for quality and quantity and competitive
pricing. The Company's long-term supplier relationships, terminal and storage
facilities, transportation capabilities and industry and

33
<PAGE> 35

product knowledge support the Company's efforts to provide superior customer
service. In addition, the Blue Island Plant's Midwest location gives it
significant freight cost advantages in selling to its customers in the Midwest
over its competitors' production facilities located in the Southeast.

EMPLOYEES

As of March 31, 1997, the Company and its consolidated subsidiaries had
approximately 161 full-time employees. Of these, 82 employees were in management
and administration, 33 in sales and marketing and 46 were in production and
distribution. Approximately 27 of the Company's domestic employees at the Blue
Island Plant are covered by a collective bargaining agreement with the Oil,
Chemical and Atomic Workers Union. This agreement expires on October 31, 1998.
The Company considers its relations with both its union and non-union employees
to be satisfactory.

PROPERTIES

The following table sets forth certain information as of March 31, 1997,
relating to the Company's principal facilities:

<TABLE>
<CAPTION>
APPROXIMATE
FACILITY PRINCIPAL ACTIVITIES; LOCATION SQUARE FEET OWNED/LEASED
- -------- ------------------------------ ----------- ------------
<S> <C> <C> <C>
Corporate Headquarters Administration Headquarters; 25,000 Owned
Tampa, Florida
Blue Island Plant Manufacturing; 958,000 Owned
Blue Island, Illinois
OTC Terminal Terminaling and Storage; 104,000 Co-owned
Houston, Texas
JLM Terminal Terminaling and Storage; 609,000 Owned
Wilmington, North Carolina
North America Sales Offices Blue Island, Illinois * Owned
Houston, Texas * Owned
Wilmington, North Carolina * Owned
Toronto, Canada * Leased
International Sales Offices Rotterdam, Netherlands * Leased
Caracas, Venezuela * Leased
Maracaibo, Venezuela * Leased
Valencia, Venezuela * Leased
</TABLE>

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

* Less than 25,000 square feet

ENVIRONMENTAL REGULATION

The Company and its operations are subject to federal, state, local and
foreign environmental laws, rules, regulations, and ordinances concerning
emissions to the air, discharges to surface and subsurface waters, and the
generation, handling, storage, transportation, treatment, disposal and import
and export of hazardous materials ("Environmental Laws"). Compliance with such
Environmental Laws may result in significant capital expenditures by the
Company. Moreover, under certain Environmental Laws, the Company may be liable
for remediation of contamination at certain of its current and former
properties. For example, under the Comprehensive Environmental Response,
Compensation and Liability Act of 1990, as amended ("CERCLA") and similar state
laws, the Company and prior owners and operators of the Company's properties may
be liable for the costs of removal or remediation of certain hazardous or toxic
materials on, under or emanating from the properties, regardless of their
knowledge of, or responsibility for, the presence of such materials. CERCLA and
similar state laws also impose liability for investigation, cleanup costs and
damage to natural resources on persons who dispose of or arrange for the
disposal of hazardous substances at third-party sites. In addition, under the
Resource Conservation and Recovery Act of 1976 ("RCRA"), the holder of a permit
to treat or store hazardous waste can

34
<PAGE> 36

be required to remediate environmental pollution from solid waste management
areas at the permitted facility regardless of when the contamination occurred.

Although it is impossible to predict precisely what effect Environmental
Laws will have on the Company in the future, the Company believes, based on past
experience and Management's best assessment of future events, that any
environmental liabilities will be determined and incurred over an extended
period of time, allowing the Company to fund them through its operating cash
flow and mitigating their impact on the Company's results of operations.
Accordingly, the Company further believes that the effect of any such
environmental liabilities would not be material in relation to the Company's
consolidated financial position at December 31, 1995 and 1996 and March 31,
1997. Depending on future operating results, however, the environmental
liabilities to be recorded in a given annual or quarterly period may result in
charges that materially affect the Company's results of operations for that
period.

Although elevated levels of certain petroleum-related substances, organic
chemicals and metals have been detected in groundwater and/or soils at the
Company's Wilmington, North Carolina terminal facilities, the Company believes
that the presence of such substances is the result of either historical use
prior to the Company's acquisition of the site from Union Oil Company of
California ("Unocal") in 1992 and/or migration from neighboring facilities
(including an adjacent Superfund site that is currently being remediated).
Unocal, the prior owner of the site, is currently implementing a state approved
Remedial Action Plan ("RAP") to address onsite petroleum contamination. The
Company is not subject to any requirements under the RAP and believes that the
prior owner or the owners of the neighboring properties bear responsibility for
any additional remediation of petroleum-related contaminants. Except for the
ongoing remediation, no significant cleanup activities have been conducted at
the JLM Terminal since it was acquired by the Company in 1992. Should remedial
activities be conducted to address contaminants that are not petroleum-related,
the Company has insufficient information regarding the types, concentrations,
and possible cleanup levels of onsite contaminants to reasonably estimate costs
that may be associated with such remediation. In addition, the Company may be
entitled to be indemnified for such costs under the 1992 Asset Purchase
Agreement between the Company and Unocal. Pursuant to indemnification provisions
set forth in the agreement, Unocal agreed to indemnify the Company up to $7.5
million for environmental liabilities at the JLM Terminal.

The Company believes that the low levels of various organic compounds
detected in soils and groundwater at the Blue Island plant are the result of
historical use of the site prior to its acquisition by the Company in 1995
and/or migration from neighboring facilities. The concentrations of some of
these compounds exceed established state groundwater standards and/or cleanup
objectives. However, the Company also believes that the likelihood of either
state or federal environmental regulatory agencies seeking remediation in the
near term is low, based on the location of the facility, the character of the
area (each of which are factors in assessing risk), and the fact that the site
is pending removal from the federal list of contaminated sites. To date, the
Company has not been required to plan, undertake, or fund any remedial
activities.

Levels of organic compounds slightly in excess of regulatory reporting
thresholds were detected in groundwater at the Polychem plant owned by the
Company. The Company has been addressing the problem, and recent analytical
results show that the levels of contaminants have decreased to acceptable
levels. Accordingly, the Company has requested that state authorities permit
closure of the remediation at the site.

The Company does not believe that a material amount of funds will be
required to complete remediation at any site.

LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings, other than claims and
lawsuits arising in the normal course of the Company's business. The Company
does not believe that such claims and lawsuits, individually or in the
aggregate, will have a material adverse effect on its business.

The Internal Revenue Service (the "IRS") has concluded a federal income tax
examination of the Company's 1988, 1989 and 1990 tax years and has proposed
adjustments for such years. The Company has filed a protest of the proposed
adjustments and is awaiting a determination by the Service with respect to the

35
<PAGE> 37

Company's protest. The Company believes that the outcome of the examination will
not have a material adverse effect on the financial condition or results of
operations of the Company.

The IRS has also commenced a federal income tax examination for the
Company's 1992, 1993 and 1994 tax years. The examination is in its final stages,
and the Service has not asserted any income tax deficiencies or definitively
indicated all the issues that will be involved in the examination. The issues
that have been raised by the Service thus far do not indicate that any impact on
the taxable years at issue would be material. However, there can be no assurance
that additional issues impacting future taxable years will not be raised and
resolved adversely to the Company during the course of the examination or
subsequent proceedings.

36
<PAGE> 38

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The Company's Board of Directors is composed of four members. Upon the
completion of the Offering, the size of the Board of Directors will be increased
to seven members and three additional directors will be named to fill the
additional positions. Directors generally serve for one-year terms and until
their successors are duly elected and qualified. Upon consummation of the
Offering, the Certificate of Incorporation and Bylaws of the Company will
provide that the size of the Board of Directors may be changed (but not to fewer
than three or more than nine members) by resolution adopted by the Board of
Directors of the Company.

The following table sets forth certain information regarding the Company's
existing directors, executive officers, two of the three nominees who will be
elected as additional directors effective upon the consummation of the Offering
and a key employee of the Company. Each of the nominees for director named below
has agreed to serve as a director of the Company upon their election to the
Board. The Company anticipates naming a third nominee on or prior to
consummation of the Offering.

<TABLE>
<CAPTION>
DIRECTORS AND EXECUTIVE OFFICERS AGE POSITIONS
- -------------------------------- --- ---------
<S> <C> <C>
John L. Macdonald............................ 53 President, Chief Executive Officer and Director
Thaddeus J. Lelek............................ 48 Vice President and Director
Wilfred J. Kimball........................... 58 Vice President and Director
Frank A. Musto............................... 40 Vice President, Chief Financial Officer and
Director
John T. White................................ 66 Vice President and General Counsel
Michael J. Molina............................ 45 Vice President -- Tax and Audit and Secretary
Linda L. Sato................................ 36 Vice President and Treasurer
NOMINEES FOR DIRECTORS
- ----------------------
Roger C. Kahn................................ 45 Director
J. Robert Mehall............................. 55 Director
Jerry L. Weinstein........................... 61 Director
KEY EMPLOYEE
- ------------
Thomas Johannes van der Weijde............... 46 Vice President, JLM International, Inc.
</TABLE>

John L. Macdonald founded the Company in April 1986 and has served as the
President, Chief Executive Officer and a director of the Company throughout its
history. Mr. Macdonald also co-founded Gill and Duffus Chemical, Inc., in 1978
and served as its President and Chief Executive Officer until the conclusion of
a leveraged buyout in 1983 in which Gill and Duffus Chemical, Inc., merged with
the Steuber Company, Inc. Mr. Macdonald received a B.A. from Colorado College
and has more than 28 years experience in the chemical industry.

Thaddeus J. Lelek has been with the Company since its formation in 1986,
serving in a variety of senior marketing positions. In 1986 he was elected as
Vice President of JLM Marketing. Mr. Lelek has more than 27 years of experience
in the chemical industry. Mr. Lelek is principally responsible for formulating
and implementing the Company's marketing strategies and programs for North
American sales. From 1983 to 1986, Mr. Lelek was also responsible for marketing
in North America for Steuber Company, Inc. and from 1980 to 1983, Mr. Lelek
headed up the national sales effort for distribution for Gill and Duffus
Chemicals, Inc. Mr. Lelek was also employed in various capacities, including
National Sales Manager for certain products, for Gulf Oil Chemicals, Inc., from
1970 to 1979. Mr. Lelek graduated with a B.S. in Chemical Engineering from
Worchester Polytechnic Institute.

Wilfred J. Kimball was hired as Vice President of JLM Chemicals and Vice
President of the Company following the acquisition by the Company in 1995 of the
Blue Island Plant from BTL Specialty Resins Corp. ("BTL Corporation"). Mr.
Kimball is primarily responsible for the operation of the Company's Blue Island
Plant. In addition, he is responsible for the operations of JLM Terminal and the
day to day direction of certain of the Company's sales force and support staff.
From 1990 to 1995 Mr. Kimball was President of BTL Corporation and in this
capacity was primarily responsible for the Blue Island Plant. From 1985 to 1990,
Mr. Kimball served

37
<PAGE> 39

in various executive capacities with BTL Corporation, including Vice President
of Manufacturing and Engineering and President of Plyophen Chemicals, a division
of BTL Corporation. Prior to 1985, Mr. Kimball served for 22 years in various
capacities with Union Carbide Canada LTD. Mr. Kimball received a B.S. in
Chemical Engineering from the University of Brunswick.

Frank A. Musto has been with the Company since its formation in 1986. Mr.
Musto was elected as Vice President and Chief Financial Officer in 1994. Mr.
Musto is principally responsible for the Company's banking relationships,
current cash management systems and investment of excess funds. Prior to joining
the Company, from 1979 to 1981, and from 1983 to 1985, Mr. Musto was the Marine
Accountant, Controller and Treasurer for the Steuber Company, Inc. From 1981 to
1982, Mr. Musto was the controller for Amerpol International, New York City, a
custom house broker, freight forwarder and agent for the government controlled
fishing fleet in Poland. Mr. Musto graduated from Bernard M. Baruch College with
a B.B.A. in Accounting.

John T. White has served as Vice President and General Counsel of the
Company since 1990. Mr. White is the Company's chief legal officer and is
principally responsible for the legal affairs of the Company and its
consolidated subsidiaries. From 1987 to 1989, Mr. White was Senior Vice
President for Paribas Corporation, a North American investment banking firm.
From 1970 to 1987, Mr. White was a partner with the New York City law firm of
Wender, Murase & White, and from 1962 to 1970 Mr. White was a partner in the
international law firm of Baker & McKenzie, resident in the firm's New York City
office. Mr. White received a bachelor's degree from Harvard College, a Juris
Doctorate from Columbia and a L.L.M. from New York University.

Michael J. Molina joined the Company in 1986 as controller. In 1995, he was
promoted to his current position as Vice President -- Tax and Audit. Mr. Molina
is primarily responsible for taxes, audits and management information systems.
From 1992 to 1995, Mr. Molina served as Vice President of Administration. Mr.
Molina received a B.A. from Johns Hopkins University and a M.B.A. from Pace
University.

Linda L. Sato has been employed by the Company since 1986 when she was
hired as the Company's Assistant Controller. In 1994 she was designated as Vice
President and Controller. In 1996, Ms. Sato was promoted to Vice President and
Treasurer. Ms. Sato graduated from the University of Connecticut with a B.A. in
Accounting.

Roger C. Kahn has been a managing director of Oppenheimer & Co., Inc. in
investment banking since 1989 and is currently the head of its Industrial
Products Group.

J. Robert Mehall has been Executive Vice President -- Corporate
Development, Petrochemicals/NGLs and Crude Oil Supply for Ultramar Diamond
Shamrock since 1996. From 1982 to 1996 Mr. Mehall was Executive Vice President
and Senior Vice President of Diamond Shamrock, Inc.

Jerry L. Weinstein has been Vice President of Owens Corning -- Specialty &
Foam Products Division since 1994. From 1980 until 1994, Mr. Weinstein was
President and Chief Executive Officer of UC Industries, Inc., an independent
manufacturer of plastic products for the building materials industry.

Thomas Johannes van der Weijde has been employed by the Company since
January 1995 when he was hired as Vice President of JLM International, Inc. Mr.
van der Weijde is principally responsible for directing the Company's
international sales operations (other than for olefins). From 1988 to 1995, Mr.
van der Weijde was employed by Repsol, the Spanish state oil company, as
Managing Director -- Europe. From 1979 to 1988, Mr. van der Weijde was employed
by Carless Refining and Marketing B.V. Rotterdam, initially as the European
Sales Manager and later as Managing Director. Mr. van der Weijde received a
Bachelors degree in Physics from the University of Amsterdam.

None of the executive officers or directors are related to one another.
Executive officers are elected by and serve at the discretion of the Board of
Directors.

DIRECTORS COMPENSATION

Directors who are not employees of the Company ("Non-Employee Directors")
will receive an annual retainer fee of $10,000 and an automatic grant of options
to purchase 1,000 shares of Common Stock each year in accordance with the
Company's Non-Employee Directors' Stock Plan (the "Directors' Plan").

38
<PAGE> 40

COMMITTEES OF THE BOARD OF DIRECTORS

Upon the consummation of the Offering, the Board of Directors will create
an Audit Committee and Compensation Committee.

The Audit Committee's principal responsibilities will be to recommend
annually a firm of independent auditors to the Board of Directors, to review the
annual audit of the Company's Consolidated Financial Statements and to meet with
the independent auditors of the Company from time to time in order to review the
Company's general policies and procedures with respect to audits and accounting
and financial controls.

The principal responsibilities of the Compensation Committee will include
the establishment of compensation policies for the executive officers of the
Company and administration of any stock-based compensation plans.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth all compensation awarded to, earned by, or
paid for services rendered to the Company in all capacities during the year
ended December 31, 1996 for each of the named executive officers (as defined
under applicable Securities and Exchange Commission Rules) of the Company (the
"Named Executive Officers"):

<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
-------------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(2)
- --------------------------- ---- -------- -------- ---------------
<S> <C> <C> <C> <C>
John L. Macdonald 1996 $168,486 $250,000 $9,486
President and CEO
Thaddeus J. Lelek 1996 108,333 10,000 --
Vice President
Wilfred J. Kimball 1996 160,836 15,000 9,105
Vice President
Frank A. Musto 1996 91,683 26,000 9,500
Vice President and
Chief Financial Officer
John T. White 1996 113,866 27,500 --
Vice President and
General Counsel
</TABLE>

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

(1) The Company was not subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended, in 1995 or 1994. Accordingly, information
with respect to 1995 or 1994 is not required to be disclosed. Other Annual
Compensation consisting of perquisites does not exceed the minimum amounts
required to be reported pursuant to Securities and Exchange Commission Rules
and the column has therefore been deleted. No options, SARs or other
long-term compensation awards were granted in 1996.
(2) Consists of the amounts contributed by the Company to the Company's Defined
Contribution Plan.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Board of Directors has not previously had a compensation committee and
the functions of the compensation committee historically have been performed by
the Board of Directors the sole member of which was John L. Macdonald, the
Company's Chief Executive Officer and President. The Board of Directors will
establish a compensation committee effective upon completion of the Offering.
See "Committees of the Board of Directors."

EQUITY BASED COMPENSATION PLANS

JLM will adopt the 1997 Employee Stock Purchase Plan (the "Stock Purchase
Plan"), the Long-Term Incentive Plan (the "JLM LTIP") and the Directors' Plan.
The Compensation Committee will administer the

39
<PAGE> 41

Stock Purchase Plan and the JLM LTIP and make the determination as to the grant
of awards, options and/or rights under the respective plans. No member of the
Compensation Committee may receive grants or awards under the plans. The Board
of Directors of JLM will administer the Directors' Plan.

Stock Purchase Plan. An aggregate of 75,000 shares of Common Stock are
reserved for issuance under the plan. Under the Stock Purchase Plan, all
employees will be given the opportunity to purchase shares of JLM Common Stock
two times a year at a price equal to 85.0% of the market price of the stock
immediately prior to the beginning of each offering period. The Stock Purchase
Plan provides for two offering periods, the months of March and September, in
each of the years 1997-2006.

JLM LTIP. An aggregate of 750,000 shares of Common Stock are reserved for
issuance under the plan. Under the JLM LTIP, restricted stock, incentive stock
options, nonqualified stock options and stock appreciation rights or any
combination thereof may be granted to JLM employees. In general, the exercise
price of the options granted under the plan will be determined at the discretion
of the committee administering the plan, which price may not be less than the
market price of JLM Common Stock on the date the option is granted. Options will
normally vest 33 1/3% each year after issuance over a period of three years and
will expire after 10 years. The committee may condition awards of restricted
stock and stock appreciation rights upon satisfaction of performance criteria or
other conditions.

Director's Plan. An aggregate of 25,000 shares of Common Stock are
reserved for issuance under the plan. Each year Non-Employee Directors who are
elected or continuing as Non-Employee Directors as of the conclusion of the
Company's annual meeting of stockholders will receive options to purchase 1,000
shares of Common Stock. The exercise price of the Options will vest fully at the
end of one year and will expire after five years.

CERTAIN TRANSACTIONS

JLM Stables, Inc., a subsidiary of the Company, operated a horse farm in
Ocala, Florida and in connection therewith, leased from John L. Macdonald, 100
acres of land consisting of riding areas and grazing pasture, a stable building
and farm manager's house. Pursuant to the lease, JLM Stables, Inc. paid certain
costs associated with owning and operating the leased property including
utilities, maintenance and insurance. In 1994, 1995 and 1996, the Company's
total rental payments to Mr. Macdonald were $48,000 per year. Effective November
1, 1996, the Company entered into a new three-year lease with Mr. Macdonald,
providing for rental payments of $4,000 per month. During the three month period
ended March 31, 1997, the Company paid to Mr. Macdonald $12,000 in connection
with this lease. In December 1996, the Company made a decision to terminate its
involvement with the horse farm business, and is taking steps to sell all assets
used in those activities. In connection with the termination of the horse farm
operations, Mr. Macdonald purchased certain horses from the Company for an
aggregate purchase price of approximately $324,000 and terminated the lease
effective April 30, 1997.

On November 19, 1996, Mr. Macdonald loaned the Company approximately
$941,000. The loan is unsecured, bears interest at the prime rate, currently
8.5%, compounded annually and matures on January 1, 1998. As March 31, 1997, the
unpaid principal balance of the loan was approximately $905,000. During 1994,
1995 and 1996, the Company was indebted to Mr. Macdonald on an open account
basis for approximately $605,000, $886,000 and $905,000, respectively. All such
indebtedness was repaid prior to entering into the November loan transaction.

In 1995 and 1996, the Company purchased approximately $479,000 and
$319,000, respectively, of chemical products from Kemlink JV, a New York joint
venture partnership owned 50.0% by Kemlink, L.L.C., a Delaware limited liability
company of which Mr. Macdonald is a 97.0% owner. All purchases in 1995 and 1996
were at prices comparable to those paid to unrelated parties. In addition,
during these years, the Company sold approximately $1.6 million and $1.3
million, respectively, of chemical products to Kemlink JV. The Company did not
purchase from or sell any chemicals to Kemlink in 1994. Effective December 31,
1996, the Company ceased during business with Kemlink JV, which was terminated
by its partners, and Kemlink, L.L.C.

40
<PAGE> 42

The Company's Spanish distributor is Chemical Trading, S.L. ("CTSL"), which
is owned 100.0% by Eduardo Delgadillo, a stockholder of the Company. The Company
and CTSL have an arrangement pursuant to which the Company pays CTSL's operating
expenses. The Company treats the difference between such payments and the amount
of commissions and other amounts due to CTSL as a loan. Under such arrangement
CTSL was indebted to the Company for approximately $140,000, $569,000 and
$322,000, as of December 31, 1994, 1995 and 1996, respectively, and
approximately $421,000 as of March 31, 1997. Such indebtedness is carried on an
open account basis and during 1996, approximately $522,000 was repaid without
interest through the sale to the Company by Mr. Delgadillo of 48 shares of the
Company's Common Stock (representing approximately 5.1% of the issued and
outstanding shares of Common Stock at such date) owned by him. During the period
from 1994 to 1996, Mr. Delgadillo was the beneficial owner of between 9.9% and
4.8% of the Company's outstanding Common Stock.

In 1994, 1995, 1996 and 1997, the Company leased certain office space from
Aurora, a Texas corporation of which John L. Macdonald is an 80% stockholder.
Aurora markets certain solvent chemicals, primarily phenol, benzene, and
acetone. The lease is on a month to month basis with a rental of $2,100 per
month. In 1994, 1995, 1996 and for the period ending March 31, 1997, lease
payments were approximately $18,000, $25,000, $25,000 and $6,300, respectively.
The lease with Aurora was terminated upon consummation of the purchase by the
Company of all of the common stock of Aurora. In 1994, 1995, 1996 and for the
period ending March 31, 1997, the Company sold approximately $3.0 million, $5.6
million, $1.4 million and $0.2 million, respectively, of chemical products to
Aurora.

The Company entered into an Agreement for Sale and Purchase of Common Stock
held by Mr. Macdonald and an unrelated third party to purchase for a total
purchase price of approximately $1.25 million all of the issued and outstanding
shares of Aurora. Under the terms of the agreement, the Company purchased Mr.
Macdonald's ownership interest in Aurora for a $1.0 million promissory note that
matures on June 1, 2002 and bears interest at a rate of 10.0% per annum. The
other shareholder received consideration of $250,000 for the purchase of his
ownership interest. Of such amount, $150,000 was paid at closing in cash and
$100,000 was paid by a three year promissory note which bears interest at the
prime rate and is payable in three equal annual installments.

In 1994, 1995, 1996 and 1997, the Company leased chemical tank railcars
from Phoenix, a Connecticut corporation of which the sole stockholder is John L.
Macdonald. The Company made payments in 1994, 1995, 1996 and for the period
ending March 31, 1997 to Phoenix in respect of such leases of approximately
$160,000, $162,000, $203,000 and $6,000, respectively. The Company entered into
an Agreement for Sale and Purchase of Common Stock with Mr. Macdonald to
purchase for a total purchase price of $500,000 all of the issued and
outstanding shares of Phoenix. Under the terms of the agreement, the Company
purchased Mr. Macdonald's ownership interest in Phoenix for $500,000, of which
$250,000 was paid at closing in cash and $250,000 by a promissory note that
matures on June 1, 2002 and bears interest at a rate of 10.0% per annum.

The Company believes that each of the certain transactions described above
were on terms no less favorable to the Company than those which could have been
obtained in arm's length transactions with unaffiliated third parties. However,
except as indicated above, the Company did not obtain independent objective
information to support its belief in this respect. After the consummation of the
Offering, the Company will not enter into any transaction with any officer,
director or stockholder except on terms that are no less favorable to the
Company than those which could be obtained in an arm-length transaction with an
unaffiliated party unless the approval of a majority of disinterested directors
is obtained.

41
<PAGE> 43

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of the date of the
Prospectus and as adjusted to reflect the sale of shares offered hereby,
assuming no exercise of the Underwriters' over-allotment option, by (i) each
person known by the Company to own beneficially more than 5.0% of the
outstanding Common Stock, (ii) each director and each nominee for director of
the Company, (iii) each of the Named Executive Officers, (iv) all officers,
directors and nominees for directors as a group, and (v) the Selling
Stockholder. The persons named in the table have sole voting and investment
powers with respect to all shares of Common Stock shown as beneficially owned by
them. For purposes of the table, a person or group of persons is deemed to have
"beneficial ownership" of any shares as of a given date which such person has
the right to acquire within 60 days after such date.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO THE OFFERING(1)(2) SHARES AFTER THE OFFERING(1)
--------------------------- OFFERED -----------------------
NUMBER PERCENTAGE FOR SALE NUMBER PERCENTAGE
----------- ------------ -------------- --------- ----------
<S> <C> <C> <C> <C> <C>
John L. Macdonald(3)........... 4,515,648 95.2% 144,000 4,371,648 63.4
8675 Hidden River Parkway
Tampa, Florida 33627
Thaddeus J. Lelek.............. -- -- -- -- --
Wilfred J. Kimball............. -- -- -- -- --
Frank A. Musto................. -- -- -- -- --
John T. White.................. -- -- -- -- --
Roger C. Kahn.................. -- -- -- -- --
J. Robert Mehall............... -- -- -- -- --
Jerry L. Weinstein............. -- -- -- -- --
All Directors, Nominees for
Directors and Executive
Officers As a Group (10
persons)..................... 4,515,648 95.2% -- 4,371,648 63.4
</TABLE>

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

(1) Does not include an aggregate of 278,000 shares of Common Stock issuable to
the Company's directors and executive officers upon the exercise of stock
options to be granted to such persons effective upon the completion of the
Offering. Such options will have an exercise price equal to the price on the
date of grant and will vest in equal one-third increments in arrears over
three years from the date of grant. Also does not include an aggregate of
37,000 shares of restricted Common Stock to be awarded to five executive
officers, effective upon the completion of the Offering. Such shares of
restricted Common Stock will be subject to a substantial risk of forfeiture
that will lapse in equal one-fourth increments in arrears over four years
from the date of award.

(2) Does not include 228,288 shares (4.8%) of Common Stock owned by the
Company's minority stockholder.

(3) The Selling Stockholder, John L. Macdonald, serves as the Company's
President and Chief Executive Officer. Mr. Macdonald also serves as a
director of the Company. Includes 167,040 shares of Common Stock held by two
irrevocable trusts created for the benefit of Mr. Macdonald's children for
which Mr. Macdonald disclaims beneficial ownership.

DESCRIPTION OF CAPITAL STOCK

GENERAL

The following description of the Company's capital stock is qualified in
its entirety by reference to the Certificate of Incorporation and Bylaws of the
Company, which are included as exhibits to the Registration Statement of which
this Prospectus forms a part.

AUTHORIZED CAPITAL STOCK

The total number of shares of all classes of stock that the Company has
authority to issue under its Certificate of Incorporation is 35,000,000 shares,
of which 30,000,000 shares represent shares of Common Stock and 5,000,000 shares
represent shares of Preferred Stock (the "Preferred Stock").

42
<PAGE> 44

COMMON STOCK

As of July 3, 1997, there were 4,743,936 shares of Common Stock
outstanding. Subject to any preferential rights of any Preferred Stock created
by the Board of Directors, each outstanding share of Common Stock will be
entitled to such dividends, if any, as may be declared from time to time by the
Board out of funds legally available therefor. See "Dividend Policy." Each
outstanding share is entitled to one vote on all matters submitted to a vote of
stockholders except on matters which are required to be voted exclusively by
holders of Preferred Stock or any class of shares of Preferred Stock. In the
event of liquidation, dissolution or winding up of the Company, holders of
Common Stock are entitled to receive on a pro rata basis any assets remaining
after provision for payment of creditors and after payment of any liquidation
preferences to holders of Preferred Stock. There are no redemption provisions
applicable to the Common Stock. All outstanding shares of Common Stock are fully
paid and non-assessable and the shares of Common Stock to be issued upon
completion of the Offering will be fully paid and non-assessable.

PREFERRED STOCK

The Company's Certificate of Incorporation authorizes 5,000,000 shares of
Preferred Stock. The Board has the authority to prescribe for each series of
Preferred Stock it establishes the number of shares in that series, the voting
rights (if any) to which such shares in that series are entitled, the
consideration for such shares in that series and the designations, powers,
preferences and relative, participating, optional or other special rights, and
such qualifications, limitations or restrictions of the shares in that series,
without further action or vote by the Stockholders. Depending upon the rights of
such Preferred Stock, the issuance of Preferred Stock could have an adverse
effect on holders of Common Stock by delaying or preventing a change in control
of the Company, making removal of the present management of the Company more
difficult or resulting in restrictions upon the payment of dividends and other
distributions to the holders of Common Stock. The issuance of Preferred Stock
with voting and conversion rights may adversely affect the voting power of the
holders of Common Stock, including the loss of voting control to others. At
present, the Company has no plans to issue any of the Preferred Stock.

CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED CAPITAL STOCK

Under the Company's Certificate of Incorporation, upon consummation of this
Offering, assuming no exercise of the Underwriters' over-allotment option, there
will be 22,250,064 shares of Common Stock available for future issuance without
stockholder approval. These additional shares may be used for a variety of
corporate purposes, including future public offerings to raise additional
capital or to facilitate corporate acquisitions. In addition, the Board has the
authority to issue shares of Preferred Stock.

One of the effects of the existence of unissued and unreserved Common Stock
or Preferred Stock may be to enable the Board to issue shares to persons
friendly to current management, which issuance could render more difficult or
discourage an attempt to obtain control of the Company by means of a merger,
tender offer, proxy contest or otherwise, and thereby protect the continuity of
the Company's management and possibly deprive the stockholders of opportunities
to sell their shares of Common Stock at prices higher than prevailing market
prices. Such additional shares also could be used to dilute the stock ownership
of persons seeking to obtain control of the Company. The Company currently does
not have any plans to issue additional shares of Common Stock or Preferred Stock
other than in connection with employee compensation plans.

NO PREEMPTIVE RIGHTS

No holder of any class of stock of the Company authorized at the time of
the Offering will have any preemptive or conversion rights of any other right to
subscribe to any securities of the Company of any kind or class.

CERTAIN PROVISIONS OF THE DELAWARE GENERAL CORPORATION LAW

The Company is subject to Section 203 of the Delaware General Corporation
Law ("DGCL"). Pursuant to Section 203, with certain exceptions, a Delaware
corporation may not engage in any of a broad range of business

43
<PAGE> 45

combinations, such as mergers, consolidations and sales of assets, with an
"interested stockholder" for a period of three years from the date that such
person became an interested stockholder unless (a) the transaction that results
in the person's becoming an interested stockholder or the business combination
is approved by the board of directors of the corporation before the person
becomes an interested stockholder, (b) upon consummation of the transaction
which results in the stockholder becoming an interested stockholder, the
interested stockholder owns 85.0% or more of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding shares owned by
persons who are directors and also officers and shares owned by certain employee
stock plans or (c) on or after the date the person becomes an interested
stockholder, the business combination is approved by the corporation's board of
directors and by holders of at least two-thirds of the corporation's outstanding
voting stock, excluding shares owned by the interested stockholder, at a meeting
of stockholders. Under Section 203, an "interested stockholder" is defined as
any person, other than the corporation and any direct or indirect majority-owned
subsidiary, that is (a) the owner of 15.0% or more of the outstanding voting
stock of the corporation or (b) an affiliate or associate of the corporation and
was the owner of 15.0% or more of the outstanding voting stock of the
corporation at any time within the three-year period immediately prior to the
date on which it is sought to be determined whether such person is an interested
stockholder. Section 203 does not apply to a corporation that so provides in an
amendment to its certificate of incorporation or Bylaws passed by a majority of
its outstanding shares, but such stockholder action does not become effective
for 12 months following its adoption and would not apply to persons who were
already interested stockholders at the time of the amendment. The Company's
Certificate of Incorporation does not exclude the Company from the restrictions
imposed under Section 203.

Under certain circumstances, Section 203 makes it more difficult for a
person who would be an "interested stockholder" to effect various business
combinations with a corporation for a three-year period. The provisions of
Section 203 may encourage companies interested in acquiring the Company to
negotiate in advance with the Company's Board of Directors, because the
stockholder approval requirement would be avoided if the Board of Directors
approves either the business combination or the transaction which results in the
stockholder becoming an interested stockholder. Such provisions also may have
the effect of preventing changes in the Board. It is further possible that such
provisions could make it more difficult to accomplish transactions which
stockholders may otherwise deem to be in their best interests.

CERTAIN PROVISIONS OF CERTIFICATE OF INCORPORATION AND BYLAWS AFFECTING CHANGE
IN CONTROL

Certain provisions of the Certificate of Incorporation and Bylaws may delay
or make more difficult unsolicited acquisitions or changes of control of the
Company. It is believed that such provisions will enable the Company to develop
its business in a manner that will foster its long-term growth without
disruption caused by the threat of a takeover not deemed by its Board of
Directors to be in the best interests of the Company and its stockholders. Such
provisions could have the effect of discouraging third parties from making
proposals involving an unsolicited acquisition or change of control of the
Company, although such proposals, if made, might be considered desirable by a
majority of the Company's stockholders. Such provisions may also have the effect
of making it more difficult for third parties to cause the replacement of the
current Board. These provisions include (i) the availability of capital stock
for issuance from time to time at the discretion of the Board of Directors (see
"Authorized but Unissued Capital Stock"), (ii) prohibitions against stockholders
calling a special meeting of stockholders, (iii) requirements for advance notice
for raising business or making nominations at stockholders' meetings, (iv) the
ability of the Board of Directors to increase the size of the board and to
appoint directors to newly created directorships and (v) higher than majority
requirements to make certain amendments to the Bylaws and Certificate of
Incorporation.

Special Meetings

The Certificate of Incorporation and Bylaws also provide that special
meetings of the stockholders can be called only by the Chairman of the Board of
Directors, the Chief Executive Officer of the Company or by a vote of the
majority of the Board of Directors. Furthermore, the Bylaws of the Company
provide that only such business as is specified in the notice of any such
special meeting of stockholders may come before such meeting.

44
<PAGE> 46

Advance Notice for Raising Business or Making Nominations at Meetings

The Bylaws of the Company establish an advance notice procedure for
stockholder proposals to be brought before an annual meeting of stockholders and
for nominations by stockholders of candidates for election as directors at an
annual or special meeting at which directors are to be elected. Only such
business may be conducted at an annual meeting of stockholders as has been
brought before the meeting by, or at the direction of, the Chairman of the Board
of Directors, or by a stockholder of the Company who is entitled to vote at the
meeting who has given to the Secretary of the Company timely written notice, in
proper form, of the stockholder's intention to bring that business before the
meeting. The chairman of such meeting has the authority to make such
determinations. Only persons who are nominated by, or at the direction of, the
Chairman of the Board of Directors, or who are nominated by a stockholder who
has given timely written notice, in proper form, to the Secretary prior to a
meeting at which directors are to be elected will be eligible for election as
directors of the Company.

To be timely, a stockholder's notice of business to be brought before an
annual meeting and nominations of candidates for election as directors at any
annual meeting shall be delivered to the Secretary of the Company at the
principal executive offices of the Company not less than 70 days nor more than
90 days prior to the first anniversary of the preceding year's annual meeting;
provided, however, that in the event that the date of the annual meeting is
advanced by more than 20 days, or delayed by more than 70 days, from such
anniversary date, notice by the stockholder to be timely must be so delivered
not earlier than the ninetieth day prior to such annual meeting and not later
than the close of business on the later of the seventieth day prior to such
annual meeting or the tenth day following the day on which public announcement
of the date of such meeting is first made.

To be timely, a stockholder's notice of nominations of persons for election
to the Board of Directors may be made at such a special meeting of stockholders
if the stockholder's notice shall be delivered to the Secretary of the Company
at the principal executive offices of the Company not earlier than the ninetieth
day prior to such special meeting and not later than the close of business on
the later of the seventieth day prior to such special meeting or the tenth day
following the day on which public announcement is first made of the date of the
special meeting and of the nominees proposed by the Board of Directors to be
elected at such meeting.

The notice of any nomination for election as a director must set forth the
name and address of, and the class and number of shares of the Company held by,
the stockholder who intends to make the nomination and the beneficial owner, if
any, on whose behalf the nomination is being made; the name and address of the
person or persons to be nominated; a representation that the stockholder is a
holder of record of stock of the Company entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to nominate the person or
persons specified in the notice; a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; such other information regarding
each nominee proposed by such stockholder as would have been required to be
included in a proxy statement filed pursuant to the proxy rules of the SEC had
each nominee been nominated, or intended to be nominated, by the Board of
Directors; and the consent of each nominee to serve as a director if so elected.

Number of Directors; Filling of Vacancies

The Certificate of Incorporation and Bylaws provide that newly created
directorships resulting from any increase in the authorized number of directors
(or any vacancy) may be filled by a vote of a majority of directors then in
office. Accordingly, the Board may be able to prevent any stockholder from
obtaining majority representation on the Board of Directors by increasing the
size of the board and filling the newly created directorships with its own
nominees.

Amendments to the Bylaws

The Certificate of Incorporation provides that the affirmative vote of the
holders of at least 80.0% in voting power of all the shares of the Company
entitled to vote generally in the election of directors, voting together as a
single class, shall be required in order for the stockholders to alter, amend or
repeal any provision of the Bylaws which is to the same effect as provisions
contained in the Certificate of Incorporation relating to (i) the

45
<PAGE> 47

amendment of the Bylaws, (ii) the filling of director vacancies and (iii)
calling and taking actions at meetings of stockholders.

Amendments to the Certificate of Incorporation

Certificate of Incorporation requires the affirmative vote of the holders
of at least 80.0% in voting power of all the shares of the Company entitled to
vote generally in the election of directors, voting together as a single class,
to alter, amend or repeal provisions of the Certificate of Incorporation
relating to (i) the amendment of the Certificate of Incorporation and/or the
Bylaws, (ii) the filling of director vacancies and (iii) calling and taking
actions at meetings of stockholders.

INDEMNIFICATION AND LIMITATION OF LIABILITY FOR DIRECTORS AND OFFICERS

The Company's Bylaws provide that the Company may indemnify directors and
officers to the fullest extent permitted by the laws of the State of Delaware.
The Company has entered into indemnification agreements with its directors
creating certain indemnification obligations on the Company's part in favor of
the directors and, as permitted by applicable law, these indemnification
agreements clarify and expand the circumstances under which a director will be
indemnified. The Certificate of Incorporation also provides that a director of
the Company shall not be liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except to the
extent such exemption from liability or limitation thereof is not permitted
under the General Corporation Law of the State of Delaware as the same exists or
may hereafter be amended.

The indemnification rights conferred by the Certificate of Incorporation of
the Company are not exclusive of any other right to which a person seeking
indemnification may otherwise be entitled. The Company will also provide
liability insurance for the directors and officers for certain losses arising
from claims or charges made against them while acting in their capacities as
directors or officers.

The effect of such indemnification arrangements may be to exempt or limit
the liability of such directors to the Company or its stockholders for monetary
damages for breach of fiduciary duty to the Company, except to the extent such
exemption or limitation is not permitted under applicable law.

TRANSFER AGENT

The transfer agent and registrar of the Company's Common Stock is State
Street Bank and Trust Company.

SHARES ELIGIBLE FOR FUTURE SALE

Upon the consummation of the Offering, the Company will have 6,899,936
shares of Common Stock outstanding. Of such shares the 2,300,000 shares offered
hereby will be freely tradeable by persons other than affiliates of the Company,
without restriction under the Securities Act of 1933, as amended (the
"Securities Act"). As defined in Rule 144, an "affiliate" of an issuer is a
person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such issuer.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated), including an "affiliate" as that term is defined
above, who has paid for shares is entitled, beginning one year from the later of
the date of acquisition of the shares from the Company or from an affiliate of
the Company, to sell within any three-month period up to that number of shares
that does not exceed the greater of 1.0% of the then outstanding shares or the
average weekly trading volume of the then outstanding shares during the four
calendar weeks preceding each such sale. A person (or persons whose shares are
aggregated) who is not deemed an affiliate of the Company and who has paid for
his shares is entitled, beginning two years from the later of the date of the
acquisition from the Company or from an affiliate of the Company, to sell such
shares under Rule 144(k) without regard to the volume limitations described
above. Affiliates continue to be subject to such volume limitations after the
two year holding period.

The Company, its officers and directors and certain of its other current
stockholders, who collectively hold 4,599,936 shares of Common Stock, have
agreed that they will not dispose of any shares of Common Stock, or

46
<PAGE> 48

any securities convertible or exchangeable for shares of Common Stock, for a
period of 180 days after the date of the Underwriting Agreement without the
written consent of Oppenheimer & Co., Inc., on behalf of the Representatives.
See "Underwriting." Upon expiration of such 180 day period, an aggregate of
228,288 shares will become eligible for sale without restriction purusuant to
Rule 144(k) under the Securities Act.

Following the effectives of the Registration Statement filed in connection
with the Offering, the Company intends to file a registration statement on Form
S-8 under the Securities Act to register 850,000 shares of Common Stock issuable
upon the exercise of stock options granted under the Option Plans. Shares of
Common Stock issued upon the exercise of stock options after the effective date
of such registration statement generally will be available for sale in the open
market. Immediately following the Offering, however, no options to purchase
Common Stock will be exercisable under the Option Plans.

47
<PAGE> 49

UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting Agreement
(the "Underwriting Agreement") among the Company, the Selling Stockholder and
Oppenheimer & Co., Inc., and A.G. Edwards & Sons, Inc., as representatives (the
"Representatives") of the underwriters of the Offering (the "Underwriters"), the
Company and the Selling Stockholder have agreed to sell to the Underwriters, and
the Underwriters have severally agreed to purchase from the Company and the
Selling Stockholder, the number of shares of Common Stock set forth opposite
their names below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
Oppenheimer & Co., Inc......................................
A.G. Edwards & Sons, Inc....................................

---------
Total............................................. 2,300,000
=========
</TABLE>

The Underwriters propose to offer the Common Stock directly to the public
at the public offering price set forth on the cover page of this Prospectus, and
at such price less a concession not in excess of $ per share of Common
Stock to certain securities dealers, of which a concession not in excess of
$ per share of Common Stock may be reallowed to certain other
securities dealers. After the Offering, the offering price and other selling
terms may be changed by the Underwriters.

In order to facilitate the Offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Common Stock. Specifically, the Underwriters may over-allot in connection with
the Offering, creating a short position in the Common Stock for their own
account. In addition, to cover over-allotments or to stabilize the price of the
Common Stock, the Underwriters may bid for and purchase, shares of Common Stock
in the open market. Finally, the underwriting syndicate may reclaim selling
concessions allowed to an underwriter or a dealer for distributing the Common
Stock in the Offering, if the syndicate repurchases previously distributed
Common Stock in transactions to cover syndicate short provisions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the Common Stock above independent market
levels. The Underwriters are not required to engage in these activities, and may
end any of these activities at any time.

The Underwriting Agreement provides that the obligations of the several
Underwriters thereunder are subject to approval of certain legal matters by
counsel and to various other conditions. The nature of the Underwriters'
obligations is such that they are committed to purchase and pay for all of the
above shares of Common Stock if any are purchased.

The Company has granted an option to the Underwriters execercisable within
45 days after the date of this Prospectus, to purchase from the Company up to an
aggregate of 345,000 additional shares of Common Stock, to cover
over-allotments, if any, at the initial public offering price less the
underwriting discount set forth on the cover pages of this Prospectus. If the
Underwriters exercise their over-allotment option to purchase any of the
additional 345,000 shares of Common Stock, each of the Underwriters has
severally agreed, subject to certain conditions, to purchase approximately the
same percentage as the number of shares of Common Stock to be purchased by each
of them bears to the 2,300,000 shares of Common Stock offered hereby. The
Company will be

48
<PAGE> 50

obligated, pursuant to the over-allotment option, to sell Common Stock to the
Underwriters to the extent such over-allotment option is exercised.

The Company and each of its officers and directors and certain stockholders
have agreed that without the consent of Oppenheimer & Co., Inc., on behalf of
the Representatives, they will not, for a period of 180 days after the date of
the Underwriting Agreement (i) offer, pledge, sell, distribute, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
(ii) enter into any swap or similar agreement that transfers, in whole or in
part, the economic risk of ownership of the Common Stock, subject to certain
limited exceptions, including the sale by the Company and the Selling
Stockholder of shares of Common Stock in the Offering. The Company also may
grant options, restricted stock, stock appreciation rights or other units of
stock-based incentive compensation under the JLM LTIP.

The Company, the Selling Stockholder and the Underwriters have agreed to
indemnify each other against certain liabilities, including liabilities under
the Securities Act.

The Representatives do not intend to confirm sales of the Common Stock to
accounts over which they exercise discretionary authority.

Prior to the Offering, there has been no public market for the Common
Stock. There can be no assurance that any active trading market will develop for
the Common Stock or as to the price at which the Common Stock may trade in the
public market from time to time subsequent to the offering made hereby. The
initial price to the public for shares of Common Stock offered hereby will be
negotiated between the Company and the Representatives. Among the factors to be
considered in determining the initial price to the public are (i) the history of
and prospects for the industry in which the Company competes, (ii) the ability
of the Company's management, (iii) the past and present operations of the
Company, (iv) the historical results of operations of the Company, (v) the
prospects for future earnings and business potential of the Company, (vi) the
general condition of the securities markets at the time of the Offering, (vii)
the recent market prices of securities of generally comparable companies, (viii)
the market capitalizations and stages of development of other companies which
the Company and Representatives believe to be comparable to the Company and (ix)
other factors deemed relevant.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis,
Professional Association, Tampa, Florida, and for the Underwriters by Rogers &
Wells, New York, New York.

EXPERTS

The Consolidated Financial Statements of JLM and the Statement of Revenues
and Direct Costs of the Blue Island, Illinois, location of BTL Specialty Resins
Corp. included in this Prospectus and the Registration Statement have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports appearing herein, and are included in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (together with all
amendments, exhibits and schedules, the "Registration Statement") under the
Securities Act with respect to the shares of Common Stock offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information with respect to the
Company, reference is hereby made to the Registration Statement. Statements
contained in this Prospectus as to the contents of any contract or other
document are not necessarily complete, and in each such instance reference is
made to the copy of such contract or document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference. As a result of the Offering, the Company will become

49
<PAGE> 51

subject to the informational requirements of the Exchange Act, and in accordance
therewith will file reports, proxy statements and other information with the
Commission. The Registration Statement, as well as all periodic reports and
other information to be filed by the Company pursuant to the Exchange Act, may
be inspected without charge and copied upon payment of fees prescribed by the
Commission at the public reference facilities maintained by the Commission in
Room 1024, 450 Fifth Street NW, Washington, D.C. 20549, and at the Commission's
regional offices located at Seven World Trade Center, 7th Floor, New York, New
York 10048 and Citicorp Center, 500 Madison Street, Suite 1400, Chicago,
Illinois 60661. The Commission maintains a worldwide web site at
(http:/www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.

The Company intends to furnish its stockholders with annual reports
containing consolidated audited financial statements which have been certified
by its independent public accountant, and quarterly reports containing unaudited
summary consolidated financial information for each of the first three quarters
of each fiscal year.

50
<PAGE> 52

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS OF JLM INDUSTRIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report................................ F-2
Consolidated Balance Sheets -- December 31, 1995 and 1996
and (Unaudited) March 31, 1997............................ F-3
Consolidated Statements of Income -- Years Ended December
31, 1994, 1995 and 1996 and (Unaudited) Three Months Ended
March 31, 1996 and 1997................................... F-4
Consolidated Statements of Changes in Stockholders'
Equity -- Years Ended December 31, 1994, 1995 and 1996 and
(Unaudited) Three Months Ended March 31, 1997............. F-5
Consolidated Statements of Cash Flows -- Years Ended
December 31, 1994, 1995 and 1996 and (Unaudited) Three
Months Ended March 31, 1996 and 1997...................... F-6
Notes to Consolidated Financial Statements.................. F-7

CONSOLIDATED SUPPLEMENTAL SCHEDULE
Independent Auditors' Report................................ F-22
Supplemental Schedule....................................... F-23
</TABLE>

STATEMENT OF REVENUES AND DIRECT COSTS OF THE BLUE ISLAND, ILLINOIS LOCATION OF
BTL SPECIALTY RESINS CORP.

<TABLE>
<S> <C>
Independent Auditors' Report................................ F-24
Statement of Revenues and Direct Costs for the Period From
April 1, 1995 through June 7, 1995........................ F-25
Notes to Statement of Revenues and Direct Costs............. F-26
</TABLE>

F-1
<PAGE> 53

INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors
JLM Industries, Inc. and Subsidiaries
Tampa, Florida

We have audited the accompanying consolidated balance sheets of JLM
Industries, Inc. and subsidiaries (the "Company") as of December 31, 1995 and
1996, and the related consolidated statements of income, changes in
stockholders' equity and of cash flows for each of the three years in the period
ended December 31, 1996. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the consolidated financial position of JLM Industries,
Inc. and subsidiaries as of December 31, 1995 and 1996 and the consolidated
results of their operations and their consolidated cash flows for each of the
three years in the period ended December 31, 1996 in conformity with generally
accepted accounting principles.

DELOITTE & TOUCHE LLP

Tampa, Florida
February 19, 1997

(July 3, 1997 as to Note 18)

F-2

<PAGE> 54

JLM INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1996 AND (UNAUDITED) MARCH 31, 1997

<TABLE>
<CAPTION>
MARCH 31,
1995 1996 1997
----------- ----------- ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............................ $ 4,710,483 $ 4,792,473 $ 5,829,482
Accounts receivable:
Trade............................................. 29,514,825 25,721,911 44,078,475
Other............................................. 3,234,256 2,769,232 3,533,148
Inventories.......................................... 14,193,219 13,283,576 14,615,456
Prepaid expenses and other current assets............ 1,925,022 3,699,913 3,754,210
Assets held for sale................................. 2,626,594 1,924,394 1,866,746
----------- ----------- ------------
Total current assets......................... 56,204,399 52,191,499 73,677,517
Other investments...................................... 1,876,118 1,881,066 1,935,535
Note receivable from Olefins Terminal Corporation...... 2,752,356 2,320,313 2,406,797
Property and equipment -- net.......................... 24,711,397 29,368,360 29,206,372
Other assets -- net.................................... 953,681 1,530,565 1,519,139
----------- ----------- ------------
Total assets................................. $86,497,951 $87,291,803 $108,745,360
=========== =========== ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses................ $50,929,882 $39,590,106 $ 51,692,849
Current portion of long-term debt.................... 3,044,064 3,962,385 4,696,652
Loans payable........................................ 2,132,079 8,366,520 17,578,930
Income taxes payable................................. 352,461 33,322 513,605
Deferred revenue..................................... 20,400 300,475 20,000
----------- ----------- ------------
Total current liabilities.................... 56,478,886 52,252,808 74,502,036
Long-term debt, less current portion................... 17,018,214 17,808,872 15,420,991
Deferred income taxes.................................. 1,195,131 2,538,980 2,826,487
Loan payable to stockholder............................ 1,009,960 905,148 905,148
Minority interest...................................... 55,699 137,802 146,470
Other liabilities...................................... 220,688 203,761 208,901
----------- ----------- ------------
Total liabilities............................ 75,978,578 73,847,371 94,010,033
----------- ----------- ------------
Commitments and Contingencies (Note 12)
Stockholders' Equity:
Preferred stock -- authorized 5,000,000 shares,
issued and outstanding 0 shares................... -- -- --
Common stock -- $.01 par value, authorized 30,000,000
shares, issued and outstanding 5,011,200 shares... 50,112 50,112 50,112
Additional paid-in capital........................... 489,888 489,888 489,888
Retained earnings.................................... 10,002,182 13,467,898 14,869,776
Foreign currency translation adjustment.............. (22,809) (41,266) (152,249)
----------- ----------- ------------
10,519,373 13,966,632 15,257,527
Less treasury stock at cost -- 267,264 shares........ -- (522,200) (522,200)
----------- ----------- ------------
Total stockholders' equity................... 10,519,373 13,444,432 14,735,327
----------- ----------- ------------
Total liabilities and stockholders' equity... $86,497,951 $87,291,803 $108,745,360
=========== =========== ============
</TABLE>

See notes to consolidated financial statements.

F-3
<PAGE> 55

JLM INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
AND (UNAUDITED) THREE MONTHS ENDED MARCH 31, 1996 AND 1997

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------
1994 1995 1996 1996 1997
------------ ------------ ------------ ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues.............................. $218,569,604 $289,370,945 $236,521,183 $57,861,298 $80,517,783
Cost of sales......................... 206,906,758 265,460,931 208,281,667 51,171,163 73,671,162
------------ ------------ ------------ ----------- -----------
Gross profit........................ 11,662,846 23,910,014 28,239,516 6,690,135 6,846,621
Selling, general and administrative
expenses............................ 9,280,280 15,175,815 17,237,736 4,015,203 3,917,669
------------ ------------ ------------ ----------- -----------
Operating income.................... 2,382,566 8,734,199 11,001,780 2,674,932 2,928,952
Interest expense -- net............... (369,899) (1,757,326) (2,814,667) (641,486) (627,910)
Other income -- net................... 453,025 152,320 196,896 64,082 40,769
Foreign currency exchange (loss)
gain -- net......................... (319,303) (1,074,974) (527,652) (799,015) 62,908
------------ ------------ ------------ ----------- -----------
Income before minority interest and
income taxes...................... 2,146,389 6,054,219 7,856,357 1,298,513 2,404,719
Minority interest in (income) loss of
subsidiaries........................ (63,821) 4,670 (82,103) (7,362) (8,668)
------------ ------------ ------------ ----------- -----------
Income from continuing operations
before income taxes, discontinued
operations and extraordinary
item.............................. 2,082,568 6,058,889 7,774,254 1,291,151 2,396,051
------------ ------------ ------------ ----------- -----------
Income tax provision:
Current............................. 924,218 2,093,004 2,073,586 598,745 548,289
Deferred............................ 48,982 336,793 1,343,849 370,705 287,507
------------ ------------ ------------ ----------- -----------
Total income tax provision.......... 973,200 2,429,797 3,417,435 969,450 835,796
------------ ------------ ------------ ----------- -----------
Income from continuing operations
before discontinued operations and
extraordinary item................ 1,109,368 3,629,092 4,356,819 321,701 1,560,255
Discontinued operations:
Loss from operations of discontinued
operations (net of income tax
benefit of $214,115, $217,155,
$279,312, $54,847 and $56,452,
respectively)..................... (229,060) (325,728) (419,215) (82,270) (84,679)
Loss on disposal of discontinued
operations (net of income tax
benefit of $81,049 and $3,620,
respectively)..................... -- (121,574) (9,050) -- --
------------ ------------ ------------ ----------- -----------
Income before extraordinary item.... 880,308 3,181,790 3,928,554 239,431 1,475,576
Extraordinary gain on share of
partnership forgiveness of debt (net
of income tax expense of
$103,620)........................... 169,064 -- -- -- --
------------ ------------ ------------ ----------- -----------
Net income.......................... $ 1,049,372 $ 3,181,790 $ 3,928,554 $ 239,431 $ 1,475,576
============ ============ ============ =========== ===========
Income per share:
Income from continuing operations
before discontinued operations and
extraordinary item.................. $ 0.22 $ 0.72 $ 0.89 $ 0.06 $ 0.33
Discontinued operations............... (0.05) (0.09) (0.09) (0.02) (0.02)
Extraordinary item.................... 0.03 -- -- -- --
------------ ------------ ------------ ----------- -----------
Net income per share.................. $ 0.20 $ 0.63 $ 0.80 $ 0.04 $ 0.31
============ ============ ============ =========== ===========
Weighted average number of shares
outstanding......................... 5,011,200 5,011,200 4,877,568 5,011,200 4,743,936
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE> 56

JLM INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
AND (UNAUDITED) THREE MONTHS ENDED MARCH 31, 1997

<TABLE>
<CAPTION>
FOREIGN
ADDITIONAL CURRENCY
PREFERRED COMMON PAID-IN RETAINED TRANSLATION TREASURY STOCKHOLDERS'
STOCK STOCK CAPITAL EARNINGS ADJUSTMENT STOCK EQUITY
--------- ------- ---------- ----------- ----------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1,
1994............... $ -- $50,112 $489,888 $ 5,971,664 $ (49,320) $ -- $ 6,462,344
Stockholder
distributions...... -- -- -- (53,564) -- -- (53,564)
Net income........... -- -- -- 1,049,372 -- -- 1,049,372
Currency translation
adjustment......... -- -- -- -- (47,166) -- (47,166)
----- ------- -------- ----------- --------- --------- -----------
Balance at December
31, 1994........... -- 50,112 489,888 6,967,472 (96,486) -- 7,410,986
Stockholder
distributions...... -- -- -- (147,080) -- -- (147,080)
Net income........... -- -- -- 3,181,790 -- -- 3,181,790
Currency translation
adjustment......... -- -- -- -- 73,677 -- 73,677
----- ------- -------- ----------- --------- --------- -----------
Balance at December
31, 1995........... -- 50,112 489,888 10,002,182 (22,809) -- 10,519,373
Stockholder
distributions...... -- -- -- (462,838) -- -- (462,838)
Net income........... -- -- -- 3,928,554 -- -- 3,928,554
Purchase of treasury
stock.............. -- -- -- -- -- (522,200) (522,200)
Currency translation
adjustment......... -- -- -- -- (18,457) -- (18,457)
----- ------- -------- ----------- --------- --------- -----------
Balance at December
31, 1996........... -- 50,112 489,888 13,467,898 (41,266) (522,200) 13,444,432
Stockholder
distributions
(unaudited)........ -- -- -- (73,698) -- -- (73,698)
Net income
(unaudited)........ -- -- -- 1,475,576 -- -- 1,475,576
Currency translation
adjustment
(unaudited)........ -- -- -- -- (110,983) -- (110,983)
----- ------- -------- ----------- --------- --------- -----------
Balance at March 31,
1997 (unaudited)... $ -- $50,112 $489,888 $14,869,776 $(152,249) $(522,200) $14,735,327
===== ======= ======== =========== ========= ========= ===========
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE> 57

JLM INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
AND (UNAUDITED) THREE MONTHS ENDED MARCH 31, 1996 AND 1997

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------------
1994 1995 1996 1996 1997
----------- ----------- ------------ ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.............................................. $ 1,049,372 $ 3,181,790 $ 3,928,554 $ 239,430 $ 1,475,576
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Deferred income taxes................................. 48,982 336,793 1,343,849 370,705 287,507
Minority interest in income (loss) of subsidiaries.... 63,821 (172,950) 82,103 7,362 8,668
Loss on disposal of assets............................ 155,625 177,942 379,067 -- --
Loss on disposal of discontinued operations -- net.... -- 121,574 9,050 -- --
Extraordinary gain on share of partnership forgiveness
of debt -- net...................................... (169,064) -- -- -- --
Depreciation and amortization......................... 572,226 1,522,282 2,524,187 531,993 678,042
Loss from partnerships................................ 48,000 41,697 48,000 12,000 12,000
(Income) loss from investment in Olefins Terminal
Corporation -- net.................................. (205,155) (82,500) 55,169 47,941 6,924
Noncash management fee and interest income from
Olefins Terminal Corporation........................ (338,768) (297,706) (334,578) (67,324) (86,484)
Allowance for doubtful accounts....................... -- 44,537 383,662 -- --
Changes in assets and liabilities:
(Increase) decrease in accounts receivable.......... (9,649,574) (3,720,019) 4,081,252 414,325 (19,120,480)
(Increase) decrease in inventories.................. (15,267) (6,703,960) 510,593 6,290,069 (1,331,880)
Decrease (increase) in prepaid expenses and other
current assets.................................... 2,138 (397,739) (1,774,891) (979,902) (54,297)
(Increase) decrease in income tax receivable........ (499,954) 396,334 -- -- --
(Increase) decrease in assets held for sale......... -- (2,476,594) 1,101,250 (360,973) --
Increase in other assets............................ (275,686) (33,351) (906,048) -- (77,443)
Increase (decrease) in accounts payable and accrued
expenses.......................................... 15,374,780 10,642,880 (11,345,206) (11,001,784) 12,102,743
Increase (decrease) in income taxes payable......... 52,738 78,740 (322,759) 162,855 480,283
Increase (decrease) in deferred revenue............. -- 20,400 280,075 786,600 (280,475)
(Decrease) increase in other liabilities............ (150,000) 65,627 (16,927) (18,121) 5,148
----------- ----------- ------------ ------------ ------------
Net cash provided by (used in) operating
activities....................................... 6,064,214 2,745,777 26,402 (3,564,824) (5,894,168)
----------- ----------- ------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets held for sale.............. 1,034,000 -- 786,535 -- 1,090
Proceeds from sale of Polychem Ltd., Inc................ -- 882,337 -- -- --
Capital expenditures.................................... (1,220,974) (2,319,890) (7,346,658) (1,444,976) (370,633)
Capitalized acquisition costs........................... (127,700) -- -- -- --
Purchase of net assets, net of cash acquired............ (900,000) (3,223,084) -- -- --
Other investments....................................... (3,481) -- (70,672) (35,310) (73,393)
----------- ----------- ------------ ------------ ------------
Net cash used in investing activities............. (1,218,155) (4,660,637) (6,630,795) (1,480,286) (442,936)
----------- ----------- ------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) proceeds of loans payable.............. (1,952,917) 797,140 6,234,441 4,854,812 9,212,410
Proceeds from long-term debt............................ 3,188,962 7,699,613 4,279,312 2,616,308 50,333
Repayments of long-term debt............................ (1,640,676) (9,223,825) (3,241,263) (2,813,836) (1,703,949)
Proceeds from shareholder loan.......................... 605,000 402,380 -- -- --
Distributions to shareholders........................... (53,564) (147,080) (462,838) (140,337) (73,698)
(Repayments) borrowings of shareholder loan............. (61,769) 2,580 (104,812) (105,945) --
----------- ----------- ------------ ------------ ------------
Net cash provided by (used in) financing activities... 85,036 (469,192) 6,704,840 4,411,002 7,485,096
----------- ----------- ------------ ------------ ------------
Effect of foreign exchange rates on cash................. (47,166) 73,677 (18,457) (826) (110,983)
----------- ----------- ------------ ------------ ------------
Net increase (decrease) in cash and cash
equivalents......................................... 4,883,929 (2,310,375) 81,990 (634,934) 1,037,009
Cash and cash equivalents, beginning of period........... 2,136,929 7,020,858 4,710,483 4,710,483 4,792,473
----------- ----------- ------------ ------------ ------------
Cash and cash equivalents, end of period................. $ 7,020,858 $ 4,710,483 $ 4,792,473 $ 4,075,549 $ 5,829,482
=========== =========== ============ ============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest.............................................. $ 592,987 $ 2,000,005 $ 2,928,671 $ 554,035 $ 698,251
=========== =========== ============ ============ ============
Income taxes.......................................... $ 1,129,356 $ 1,131,857 $ 2,113,975 $ 252,217 $ 65,826
=========== =========== ============ ============ ============
Noncash investing activities:
Capital lease obligations............................. $ 149,331 $ 121,135 $ 106,391 $ -- $ 50,335
=========== =========== ============ ============ ============
Noncash financing activities:
Treasury stock purchased by satisfaction of accounts
receivable.......................................... $ -- $ -- $ 522,200 $ -- $ --
=========== =========== ============ ============ ============
</TABLE>

See notes to consolidated financial statements.

F-6
<PAGE> 58

JLM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996 AND THE
(UNAUDITED) THREE MONTHS ENDED MARCH 31, 1996 AND 1997

1. DESCRIPTION OF BUSINESS

JLM Industries, Inc. and subsidiaries ("JLM" or the "Company") is a leading
marketer and distributor of certain commodity chemicals, principally acetone and
phenol. JLM is headquartered in Tampa, Florida.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation -- The consolidated financial statements
include the accounts of JLM and its wholly-owned subsidiaries, as if the
reorganization referred to in Note 19 has occurred. JLM's principal operating
subsidiaries are JLM Marketing, Inc., JLM Chemicals, Inc., JLM Terminals, Inc.,
JLM International, Inc., Olefins Marketing, Inc., JLM Industries (Europe) B.V.,
JLM Chemicals Canada, Inc. and JLM Industries de Venezuela, C.A. All material
intercompany balances and transactions have been eliminated in consolidation.
Included in the 1994 consolidation is the 80% owned subsidiary, Olefins
Marketing Inc. and the 95% owned subsidiary, Polychem Ltd., Inc. ("Polychem").
In 1995, a former employee assigned his 20% minority interest in Olefins
Marketing Inc. to JLM in conjunction with his severance agreement. Pursuant to
the severance agreement, the former employee received severance compensation and
indemnification against future liabilities arising out of the ownership of such
shares. The resulting decrease in minority interest of $177,620 was included in
other income. Also, in 1995 Polychem was sold (see Note 16). Included in the
1995, 1996 and 1997 consolidation is the 55% owned subsidiary, JLM Europe
(B.V.).

Unaudited Interim Information -- In the opinion of management, all
adjustments necessary for a fair presentation of the unaudited interim
consolidated financial statements as of March 31, 1997 and for the three months
ended March 31, 1996 and 1997 have been included. Such adjustments consist only
of normal recurring items. Interim results are not necessarily indicative of
results for a full year.

Consolidated Statements of Cash Flows -- Cash equivalents consist of highly
liquid investments with original maturities from purchase date of three months
or less.

Inventories -- Inventories are valued at the lower of cost or market. The
costs of JLM Marketing, Inc.'s inventories are determined on the last-in,
first-out (LIFO) method. As of December 31, 1996 and March 31, 1997, JLM
Marketing Inc.'s inventory was approximately 22% and 33%, respectively, of total
inventory. The costs of remaining inventories are determined on the first-in,
first out (FIFO) method. In the year ended December 31, 1996, there was a
decrease of LIFO inventory quantities and an increase in the price index,
resulting in a decrease in the LIFO reserve. In the three months ended March 31,
1997, there was an increase of LIFO inventory quantities with no change in the
price index, resulting in no change in the LIFO reserve. If LIFO inventories
were valued at current costs, operating income would have been $1,006,000,
$623,000, $(13,000), $0 and $0 higher (lower) than those reported for the years
ended December 31, 1994, 1995 and 1996, and the three months ended March 31,
1996 and 1997, respectively. The excess of replacement cost over the value of
inventories based upon the LIFO method was $1,629,000, and $1,616,000 as of
December 31, 1995 and 1996. There was no change in the excess of replacement
cost over the value of inventories based upon the LIFO method from December 31,
1996 to March 31, 1997.

JLM enters into contracts whereby parties to the contracts agree to
exchange various quantities of inventory over a specified period of time. JLM
records these exchanges of inventory at the lower of cost or market. As of
December 31, 1995 and 1996 and March 31, 1997, JLM owed approximately
$1,360,000, $1,378,000 and $755,700, respectively, under these contracts which
are included in inventory.

In 1996, JLM entered into a fixed price financial hedging contract in order
to minimize its exposure in the three months ended March 31, 1997 to the
fluctuations in the price of propylene, one of the two key raw materials used by
JLM. The purpose of the financial hedging contract was to secure an acceptable
purchase price for JLM's propylene requirements in the three months ended March
31, 1997. The contract was for 13 million pounds of

F-7
<PAGE> 59

JLM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

propylene at $.1225 per pound. In accordance with Statement of Financial
Accounting Standards ("SFAS") No. 80, Accounting for Futures Contracts, gains
and losses for such contracts are recognized as an adjustment to cost of sales
at the time the finished goods are sold by JLM. During the three months ended
March 31, 1997, JLM purchased and sold substantially all of the 13 million
pounds of propylene covered under the hedging contract. As a result, in the
three months ended March 31, 1997, JLM recognized a gain of $492,970, which
reduced cost of sales for this period. JLM can be exposed to losses in
connection with such contracts, generally the amount by which the fixed hedged
price on the contract is above the market price for such chemicals at the time
of purchase.

Prepaid Expenses and Other Current Assets -- Prepaid expenses and other
current assets include marketable securities and stock issuance costs.
Marketable securities are stated at cost, adjusted for unrealized gains or
losses, in accordance with SFAS No. 115, Accounting for Certain Investments in
Debt and Equity Securities. Stock issuance costs relate to JLM's proposed
initial public offering. Upon successful completion of the offering, such costs
will be netted against the proceeds. In the event that the offering is not
successful, JLM will expense these costs.

Assets Held for Sale -- Assets held for sale are stated at cost which
approximates market value.

Other Investments -- Other investments include JLM's investments in
partnerships and the investment in Olefins Terminal Corporation ("OTC"). JLM
accounts for certain of its investments in partnerships on an equity basis, and
accordingly, records its respective share of profits and losses which are
allocated in accordance with the partnership agreements. Except for OTC, JLM has
no obligation to make any contributions beyond its initial investments. See
further discussion of OTC in Note 5.

Property and Equipment -- Property and equipment are stated at cost.
Depreciation and amortization are computed using the straight-line method over
the shorter of the lease term or the estimated useful lives.

A summary of the lives used for computing depreciation is as follows:

<TABLE>
<S> <C>
Building.................................................... 31.5 years
Vehicles and airplanes...................................... 2 to 10 years
Equipment................................................... 5 to 10 years
Furniture and fixtures...................................... 3 to 5 years
Leasehold improvements...................................... Life of lease
</TABLE>

Other Assets -- As of December 31, 1995 and 1996 and March 31, 1997, other
assets consist primarily of the cash surrender values of life insurance policies
held on key employees and deferred acquisition costs. In addition to the above,
as of December 31, 1996 and March 31, 1997 other assets included license fees,
certain development costs and advances on consulting and non-competition
agreements (see Note 12). These costs are amortized on a straight-line basis
from 2 to 10 years. Accumulated amortization on other assets as of December 31,
1995 and 1996 and March 31, 1997 was $208,434, $578,029 and $666,898,
respectively.

Deferred Revenue -- JLM accounts for amounts received from customers in
advance of shipments of inventory as deferred revenue.

Income Taxes -- JLM accounts for income taxes under the asset and liability
method as required by SFAS No. 109, Accounting for Income Taxes. Under this
method, deferred income taxes are recognized for the tax consequences of
"temporary differences" by applying enacted statutory tax rates applicable to
future years to differences between the financial statement carrying amounts and
the tax basis of existing assets and liabilities. The effect on deferred taxes
of a tax rate change is recognized in income in the period that the rate change
is enacted.

Aurora Chemical Inc. ("Aurora") and Phoenix Tank Car Corporation
("Phoenix") have elected to be treated as S corporations for federal income tax
purposes, with profits and losses generally reportable by the stockholders in
their individual income tax returns. Any tax liability related to either Aurora
or Phoenix prior to their

F-8
<PAGE> 60

JLM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

acquisition by JLM will be the responsibility of their shareholders.
Accordingly, JLM has recorded no tax liability for such periods. On a pro forma
basis the tax liability for Aurora and Phoenix would be immaterial.

Translation of Foreign Currency Financial Statements -- Assets and
liabilities of foreign subsidiaries are translated at period-end exchange rates.
Results of operations are translated at weighted average rates for the period.
The effects of exchange rate changes in translating foreign financial statements
are presented as a separate component of stockholders' equity, except for the
Venezuelan subsidiary which operates in a hyperinflationary economy for which
the translation gains and losses are included in net income currently.

Foreign Exchange Contracts -- JLM enters into foreign exchange contracts as
a hedge against foreign accounts payable and receivable. Market value gains and
losses are recognized, and the resulting credit or debit offsets foreign
exchange gains or losses on these payables and receivables. At December 31, 1996
and March 31, 1997, JLM had no open foreign exchange contracts

Stock-Based Compensation -- In October 1995, the Financial Accounting
Standards Board issued SFAS No. 123, Accounting for Stock-Based Compensation
("SFAS No. 123"), which is effective for fiscal years beginning after December
15, 1995. Under SFAS No. 123, JLM may elect to recognize stock-based
compensation expense based on the fair value of the awards or continue to
account for stock-based compensation under Accounting Principles Board Opinion
No. 25 Accounting for Stock Issued to Employees and disclose in the financial
statements the effects of SFAS No. 123 as if the recognition provisions were
adopted. JLM does not currently have a stock-based compensation plan.

Stockholders' Equity -- Effective May 22, 1997, the Company amended its
Certificate of Incorporation and increased the number of shares of common stock
authorized to 30,000,000 and changed the par value from no par to $.01 per
share. Additionally, this amendment provided for 5,000,000 authorized shares of
a new class of preferred stock. All share and per share amounts in the
accompanying consolidated financial statements have been retroactively adjusted
for the amendment.

Income per Share -- The income per share is based on the weighted average
number of common shares outstanding during each period adjusted for actual
shares issued during the period.

Revenue Recognition -- The Company recognizes revenue from product sales
upon shipment and passage of title. The Company estimates and records provisions
for quantity rebates and sales allowances if necessary in the period the sale is
reported.

Use of Estimates -- The preparation of the consolidated financial
statements, in conformity with generally accepted accounting principles,
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimated.

Fair Value of Financial Instruments -- The estimated fair value of amounts
reported in the consolidated financial statements have been determined by using
available market information and appropriate valuation methodologies. The
carrying value of all current assets and current liabilities approximates the
fair value because of their short-term nature. The fair value of long-term debt
approximates its carrying value.

Concentration of Credit Risk -- Financial instruments which potentially
subject JLM to a concentration of credit risk principally consist of trade
accounts receivable. Credit risk with respect to trade accounts receivable is

F-9
<PAGE> 61

JLM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

generally diversified due to the large number of entities comprising JLM's
customer base and their dispersion across many different geographies. JLM
performs ongoing credit evaluations of its customers' financial condition and
requires collateral, such as letters of credit, or business insurance in certain
circumstances.

3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
MARCH 31,
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
Land and building............................... $ 6,090,504 $ 6,168,690 $ 6,168,690
Vehicles........................................ 1,040,360 378,894 361,893
Airplane........................................ -- 2,090,071 2,090,071
Equipment....................................... 17,896,185 22,493,073 22,781,904
Leased equipment -- capital lease............... 1,121,135 1,188,122 1,188,122
Furniture and fixtures.......................... 849,545 850,708 859,492
Leasehold improvements.......................... 172,701 318,066 450,186
----------- ----------- -----------
27,170,430 33,487,624 33,900,358
Less accumulated depreciation and
amortization.................................. (2,459,033) (4,119,264) (4,693,986)
----------- ----------- -----------
$24,711,397 $29,368,360 $29,206,372
=========== =========== ===========
</TABLE>

Depreciation and amortization expense for property and equipment was
$452,075, $1,335,500, $2,241,584, $499,741 and $574,722 for the years ended
December 31, 1994, 1995 and 1996 and the three months ended March 31, 1996 and
1997, respectively. The leased equipment consists of several capital leases,
which expire through June 1999, with a $189,318 option to purchase at the end of
the lease period. Future minimum capital lease payments for the years 1997
through 2001 are $266,563, $281,534, $331,767, $3,448, and $1,253, respectively.
Interest payments on such capital leases for the years 1997 through 2000 are
$72,232, $47,020, $13,670 and $440, respectively.

4. INVESTMENTS IN JOINT VENTURES AND PARTNERSHIPS

Investments in partnerships at December 31, 1995 and 1996 and March 31,
1997 consist principally of the following:

Phenol Plant Partnership -- JLM holds a 2% interest in the Mt. Vernon
Phenol Plant Partnership via its wholly owned subsidiary JLM (Ind), Inc., an
Indiana Corporation. The plant converts cumene into phenol which is marketed
under contractual agreements to GE Plastics. JLM has a long-term exclusive
agreement through 2002, and thereafter unless the agreement is terminated upon
prior notice, to purchase all acetone not used internally by GE Plastics
produced at the Mt. Vernon Phenol Plant. Based on its percentage of ownership,
JLM accounts for this investment using the cost method. As of December 31, 1995
and 1996 and March 31, 1997, the amount of this investment was approximately
$492,000. No contributions or distributions were made in 1995, 1996 or 1997.

Real Estate Partnerships -- JLM holds a 99% interest in Len-Kel Realty
Limited Partnership ("Len-Kel"). During 1987 and 1988, Len-Kel acquired 28 units
in a development project converting historical buildings into residential use.
The units are currently operated as rental property. JLM is a limited partner in
Len-Kel and cannot exert control over the partnership. Accordingly, the
investment is carried on the equity method. As of December 31, 1995 and 1996 and
March 31, 1997, the amount of this investment was approximately $957,000,
$909,000 and $897,000, respectively.

JLM holds other investments through limited partnerships. The amount of
these partnerships totaled approximately $133,000, $47,000 and $47,000 at
December 31, 1995 and 1996 and March 31, 1997, respectively.

F-10
<PAGE> 62

JLM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

During the years ended December 31, 1994, 1995 and 1996 and the three
months ended March 31, 1996 and 1997, JLM recorded income (losses) from
partnership investments of $224,684, ($41,697), $(48,000), $(12,000) and
$(12,000), respectively. The 1994 recorded income of $224,684 is comprised of a
loss of $48,000 from partnership operating activities and an extraordinary gain
of $272,684 from partnership forgiveness of debt. Income tax expense of $103,620
has been allocated to the extraordinary gain, for an extraordinary gain net of
applicable taxes of $169,064. Losses do not require cash contributions by JLM.
As a limited partner, JLM has no obligation to make any contributions beyond its
initial investment.

5. OLEFINS TERMINAL CORPORATION

During 1991, JLM formed a 100% owned subsidiary, OTC, to design and
construct a polymer grade propylene export facility in Bayport, Texas. On August
15, 1991, OTC issued common stock and common stock warrants to other investors
which reduced JLM's ownership to 49% (32% on a fully diluted basis).
Construction was completed in July 1992. JLM accounts for its investment in OTC
on the equity basis. During the years ended December 31, 1994, 1995 and 1996 and
the three months ended March 31, 1996 and 1997, income (loss) from the
investment in OTC of $205,155, $82,500, $(55,169), $(47,941) and $(15,641),
respectively, was recorded. As of December 31, 1995 and 1996 and March 31, 1997,
the amount of this investment was approximately $297,000, $280,000 and $295,000,
respectively.

JLM provides OTC with financial and management services for a fee of 2.5%
on certain sales, as defined. JLM recorded management fees of $188,768,
$147,706, $139,321, $29,824 and $0 for the years ended December 31, 1994, 1995
and 1996 and the three months ended March 31, 1996 and 1997, respectively, under
this agreement. No payment of management fees had been made to JLM as of March
31, 1997 as these amounts were subordinated to OTC's senior indebtedness. As of
December 31, 1996 and March 31, 1997, JLM has recorded approximately $729,000 in
management fees due from OTC in accounts receivable-other.

As of December 31, 1995 and 1996 and March 31, 1997, JLM has a non-current
note receivable, including accrued interest, from OTC in the amount of
$2,752,356, $2,320,313 and $2,406,797, respectively. The note bears interest at
the rate of 10% per annum.

JLM is under contract through August 1997 to ship 5,000 metric tons per
month through OTC's terminal. JLM pays $113,200 each month for these terminaling
privileges. If JLM ships less than 5,000 metric tons in a month, the difference
can be carried over to subsequent months. These carryover rights, however,
expire at the end of each subsequent contract year. JLM recorded no prepaid
terminaling fees as of December 31, 1996 as there was no guarantee that such
amounts could be utilized by JLM in 1997.

See Note 18 regarding the OTC refinancing of their long-term debt.

The following summarizes the assets, liabilities and stockholders' equity
of OTC:

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, MARCH 31,
1995 1996 1997
------------ ------------ -----------
<S> <C> <C> <C>
ASSETS:
Current....................................... $ 2,204,142 $ 2,154,737 $ 3,131,227
Noncurrent.................................... 14,697,600 12,095,787 11,355,334
----------- ----------- -----------
$16,901,742 $14,250,524 $14,486,561
=========== =========== ===========
LIABILITIES:
Current liabilities........................... $ 5,397,487 $ 4,292,927 $ 4,184,299
Noncurrent liabilities........................ 10,611,211 9,230,060 9,553,953
Stockholders' equity.......................... 893,044 727,537 748,309
----------- ----------- -----------
$16,901,742 $14,250,524 $14,486,561
=========== =========== ===========
</TABLE>

F-11
<PAGE> 63

JLM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

OTC had net income (loss) of $621,682, $250,035, $(165,507), $(145,276) and
$20,772 for the years ended December 31, 1994, 1995 and 1996 and the three
months ended March 31, 1996 and 1997, respectively.

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, MARCH 31,
1995 1996 1997
------------ ------------ -----------
<S> <C> <C> <C>
Accounts payable................................ $48,116,089 $35,886,152 $45,843,678
Accrued expenses................................ 2,813,793 3,703,954 5,849,171
----------- ----------- -----------
$50,929,882 $39,590,106 $51,692,849
=========== =========== ===========
</TABLE>

7. LOANS PAYABLE

Loans payable consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, MARCH 31,
1995 1996 1997
------------ ------------ -----------
<S> <C> <C> <C>
Secured revolving loan agreements expiring in June 1997
and April 2000. Interest is payable monthly at prime
and prime plus 1.75% (prime was 8.25% and 8.5% as of
December 31, 1996 and March 31, 1997, respectively).... $ -- $5,915,336 $ 8,410,854
Secured loans payable associated with Venezuelan
operations due on demand. Interest is payable monthly
at 37.2% and between 21% -- 23% as of December 31, 1996
and March 31, 1997, respectively....................... 29,354 1,013,655 1,087,507
Secured loans payable due on demand. Interest is payable
monthly at rates between 8.3% -- 10.0% as of December
31, 1996 and March 31, 1997............................ 2,102,725 1,437,529 8,080,569
---------- ---------- -----------
Total loans payable............................ $2,132,079 $8,366,520 $17,578,930
========== ========== ===========
</TABLE>

The loans payable are collateralized by virtually all of JLM's inventory
and accounts receivable. As of December 31, 1996 and March 31, 1997, JLM had a
total of approximately $52,800,000 of credit facilities available with various
financial institutions of which approximately $38,213,917 and $20,968,524,
respectively, was unused. Additionally, as of December 31, 1996 and March 31,
1997, JLM had guaranteed vendor letters of credit in the amount of $6,219,563
and $14,252,546, respectively.

JLM's loans payable also contain certain financial covenants which must be
met with respect to, among other things, tangible net worth, cash flow coverage,
earnings and capital expenditures. JLM was not in compliance the tangible net
worth and the cash flow coverage covenants as of December 31, 1996, and
accordingly, received waivers with respect to such covenants from its financial
institutions. There can be no assurance that JLM will not require additional
waivers in the future or, if required, that the financial institutions will
grant them. Additionally, certain provisions of the loans payable to which JLM
is subject restrict JLM's ability to pay dividends.

F-12
<PAGE> 64

JLM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, MARCH 31,
1995 1996 1997
------------ ------------ -----------
<S> <C> <C> <C>
Secured term loan payable due in equal quarterly
installments through June 2002. Interest is
payable quarterly at LIBOR plus 3.5% (LIBOR
was 5.375% and 5.688% as of December 31, 1996
and March 31, 1997, respectively)............. $14,864,177 $12,507,619 $11,293,334

Secured term loan payable due in June 2002.
Interest is payable monthly at 8.875% and
9.063% as of December 31, 1996 and March 31,
1997, respectively............................ -- 2,300,000 2,200,000
Mortgage payable due in equal monthly
installments through June 2004. Interest is
payable monthly at 9.59% as of December 31,
1996 and March 31, 1997....................... 1,800,587 1,703,694 1,679,471
Secured loans payable due in 2006. Interest is
payable at rates between 8%-9.68% as of
December 31, 1996 and March 31, 1997.......... 113,108 1,838,215 1,808,929
Secured loan payable due in variable monthly
installments through June 2000. Interest is
payable monthly at 10.9% as of December 31,
1996 and March 31, 1997....................... 1,129,167 929,167 866,667
Secured loan payable due in 1998, payable in a
$74,000 installment in 1997 and the balance
due in 1998. Interest is payable monthly at
the prime rate plus 1% (prime was 8.25% and
8.50% as of December 31, 1996 and March 31,
1997, respectively)........................... 1,052,400 978,400 904,400
Secured installment loan payable due in
September 1999, payable in quarterly
installments of $50,000. Interest is payable
quarterly at the prime rate plus 2% (prime was
8.25% and 8.50% as of December 31, 1996 and
March 31, 1997, respectively)................. -- 564,339 464,339
Secured loans payable due in equal monthly
installments through 1999. Interest is payable
monthly at rates between 10.13%-13.47% as of
December 31, 1996 and March 31, 1997.......... 93,821 65,258 99,894
Capital lease obligations due in equal monthly
installments through April 2001. Interest is
payable monthly at rates between 9.93%-16.99%
as of December 31, 1996 and March 31, 1997.... $ 1,009,018 $ 884,565 $ 800,610
----------- ----------- -----------
Total................................. 20,062,278 21,771,257 20,117,643
Less current portion.................. (3,044,064) (3,962,385) (4,696,652)
----------- ----------- -----------
Long-term portion..................... $17,018,214 $17,808,872 $15,420,991
=========== =========== ===========
</TABLE>
F-13
<PAGE> 65

JLM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Long-term debt becoming due during subsequent fiscal years ending on
December 31 are as follows:

<TABLE>
<S> <C>
1997........................................................ $ 3,962,385
1998........................................................ 4,724,810
1999........................................................ 3,802,765
2000........................................................ 3,147,303
2001........................................................ 3,320,577
Thereafter.................................................. 2,813,417
-----------
Total............................................. 21,771,257
Less current portion.............................. (3,962,385)
-----------
Long-term portion................................. $17,808,872
===========
</TABLE>

The long-term debt is secured by substantially all of JLM's property and
equipment.

9. LOAN PAYABLE TO STOCKHOLDER AND RELATED PARTY TRANSACTIONS

JLM has loans payable to its majority stockholder in the amount of
$1,009,960, $905,148 and $905,148 at December 31, 1995 and 1996 and March 31,
1997, respectively. The loan payable as of December 31, 1996 and March 31, 1997
bears interest at the prime rate, which was 8.25%, and matures on April 1, 1998.
In 1995 and 1996, JLM purchased $479,400 and $318,600 of chemical products from
a joint venture partnership owned 50.0% by Kemlink, L.L.C., a Delaware limited
Liability company of which the majority stockholder is a 97.0% owner. All
purchases in 1995 and 1996 were at prices comparable to those paid to unrelated
parties. In addition, during 1995 and 1996, JLM sold $1,588,900 and $1,260,000,
respectively, of chemical products to Kemlink J.V. JLM did not purchase from or
sell any chemicals to Kemlink J.V. in 1994. Effective December 31, 1996, the
Company ceased doing business with Kemlink J.V., which was terminated by its
partners, and Kemlink, L.L.C.

10. INCOME TAXES

JLM's current and deferred income tax provision consists of the following:

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
---------------------------------- -------------------
1994 1995 1996 1996 1997
-------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Current:
Federal........................ $366,645 $1,333,030 $1,350,848 $330,438 $336,630
State and local................ 48,826 212,427 182,528 45,215 59,305
Foreign........................ 398,252 249,343 257,278 168,245 95,902
Deferred......................... 48,982 336,793 1,343,849 370,705 287,507
-------- ---------- ---------- -------- --------
$862,705 $2,131,593 $3,134,503 $914,603 $779,344
======== ========== ========== ======== ========
</TABLE>

The income tax provision reflected above includes the income tax
expense/benefit associated with discontinued operations and extraordinary gain.

F-14
<PAGE> 66

JLM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The significant components of the deferred tax assets and liabilities are
as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------- MARCH 31,
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
Deferred tax assets:
Foreign net operating loss................. $ 77,000 $ 415,000 $ 430,000
Minimum tax credit carryforward............ -- 283,400 283,400
----------- ----------- -----------
77,000 698,400 713,400
Valuation allowance........................ (77,000) (415,000) (430,000)
----------- ----------- -----------
Total deferred tax assets.......... -- 283,400 283,400
----------- ----------- -----------
Deferred tax liabilities:
Property................................... (289,451) (1,953,133) (2,252,040)
Investment in partnership.................. (866,571) (817,974) (806,574)
Other...................................... (39,109) (51,273) (51,273)
----------- ----------- -----------
Total deferred tax liabilities..... (1,195,131) (2,822,380) (3,109,887)
----------- ----------- -----------
Net deferred tax liability......... $(1,195,131) $(2,538,980) $(2,826,487)
=========== =========== ===========
</TABLE>

The net change in the total valuation allowance for the year ended December
31, 1996 and the three months ended March 31, 1997 was an increase of $338,000
and $15,000, respectively. The valuation allowance represents the deferred tax
assets booked for foreign net operating losses generated from Venezuelan
operations.

At December 31, 1996 and March 31, 1997, there are foreign net operating
losses of approximately $1,220,000 and $1,270,000, respectively, available to
offset future foreign taxable income. These net operating losses expire in
various years ending in 2000.

JLM's effective income tax rate differs from the statutory federal income
tax rate of 34% as follows:

<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED ENDED
DECEMBER 31, MARCH 31,
----------------------- --------------
1994 1995 1996 1996 1997
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Statutory federal income tax rate.......... 34.00% 34.00% 34.00% 34.00% 34.00%
State and local income taxes............... 2.55 4.00 2.58 4.92 2.74
Foreign income taxes, net of federal income
tax benefit.............................. 6.55 2.12 3.80 17.53 2.42
Valuation allowance -- foreign net
operating loss........................... -- -- 4.79 38.10 .67
Foreign Sales Corporation benefit.......... -- -- (2.05) (1.69) (4.45)
Other...................................... 2.02 0.00 1.25 6.61 .62
----- ----- ----- ----- -----
Effective income tax rate.................. 45.12% 40.12% 44.37% 99.47% 36.00%
===== ===== ===== ===== =====
</TABLE>

Undistributed earnings (accumulated deficit) of non-U.S. subsidiaries
included in consolidated retained earnings amounted to $542,794, $(284,069) and
$(256,467) as of December 31, 1995 and 1996 and March 31, 1997, respectively.
JLM intends to continue to indefinitely reinvest these earnings, which reflect
full provision for non-U.S. income taxes, to expand its international
operations. Accordingly, no provision has been made for U.S. income taxes that
might be payable upon repatriation of such earnings. In the event any earnings
of non-U.S. subsidiaries are repatriated, JLM will provide for U.S. income taxes
upon repatriation of such earnings which will be offset by applicable foreign
tax credits, subject to certain limitations.

F-15
<PAGE> 67

JLM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. TREASURY STOCK

Chemical Trading, S.L. ("Trading"), JLM's Spanish distributor, was indebted
to JLM pursuant to an arrangement in which JLM pays the distributor's operating
expenses. JLM treats the difference between such payments made by JLM and the
amount of commissions and other amounts due to the distributor in respect of his
activities on behalf of JLM as a loan by JLM to the distributor. Such
indebtedness was carried on an open account basis and in July 1996, $522,200 was
repaid without interest through the sale to JLM of 48 shares of common stock
owned by Trading's owner. Included in accounts receivable-other as of December
31, 1995 and 1996 and March 31, 1997 are amounts owed to JLM by Trading in the
amount of $568,633, $322,350 and $420,944, respectively.

12. COMMITMENTS AND CONTINGENCIES

JLM is obligated under operating leases with remaining noncancelable terms
of a year or more for office equipment and automobiles. The approximate minimum
annual rentals under these leases at December 31, 1996 are as follows:

<TABLE>
<S> <C>
1997........................................................ $ 829,306
1998........................................................ 592,128
1999........................................................ 371,174
2000........................................................ 186,583
2001........................................................ 33,370
----------
Total minimum lease payments...................... $2,012,561
==========
</TABLE>

Total rental expenses for all operating leases approximated $1,533,000,
$1,605,300, $1,875,000, $469,000 and $286,000 for the years ended December 31,
1994, 1995 and 1996 and the three months ended March 31, 1996 and 1997,
respectively.

JLM is also obligated under a license agreement at December 31, 1996 to
make future minimum payments as follows:

<TABLE>
<S> <C>
1997........................................................ $115,750
1998........................................................ 115,750
1999........................................................ 115,650
--------
Total............................................. $347,150
========
</TABLE>

The Internal Revenue Service (the "IRS") has concluded a federal income tax
examination of JLM's 1988, 1989 and 1990 tax years and has proposed adjustments
for such years. JLM has filed a protest of the proposed adjustments and is
awaiting a determination by the IRS with respect to the JLM protest. JLM
believes that the outcome of the examination will not have a material adverse
effect on the financial condition or results of operations of JLM.

The IRS has also commenced a federal income tax examination for JLM's 1992,
1993 an 1994 tax years. The examination is in its final stages, and the IRS has
not asserted any income tax deficiencies or definitively indicated all the
issues that will be involved in the examination. The issues that have been
raised by the IRS thus far do not indicate that any impact on the taxable years
at issue would be material. However, there can be no assurance that additional
issues impacting future taxable years will not be raised and resolved adversely
to JLM during the course of the examination or subsequent proceedings.

JLM is subject to federal, state, local and foreign environmental laws,
rules, regulations and ordinances concerning emissions to the air, discharges to
surface and subsurface waters, and the generation, handling, storage,
transportation, treatment, disposal and import and export of hazardous
materials. JLM has engaged environmental counsel for three of their facilities:
the JLM Chemicals, Inc. Blue Island, Illinois facility, the JLM

F-16
<PAGE> 68

JLM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Terminals, Inc. facility and the Polychem facility. Regarding the JLM Chemicals,
Inc. facility, JLM believes that the low levels of various organic compounds
detected in soil and groundwater at the facility are the result of historical
use of the facility prior to its acquisition by JLM (see Note 15) and/or
migration from neighboring facilities. JLM also believes that the likelihood of
either state or federal environmental regulatory agencies seeking remediation in
the near term is low, based on the location of the facility, the character of
the area (each of which are factors in assessing risk) and the fact that the
site is pending removal from the federal list of contaminated sites. Regarding
the JLM Terminals, Inc. facility, JLM believes that ultimate liability for
remediation of soil and groundwater contamination rests with the previous owner
of the facility and/or a neighboring facility. The previous owner is currently
implementing a state approved Remedial Action Plan ("RAP"). The Company is not
subject to any requirements under the RAP. Regarding the Polychem facility,
levels of organic compounds slightly in excess of regulatory thresholds were
detected in the ground water. JLM has been addressing the problem and recent
analytical results show that the levels of contaminants have decreased to
acceptable levels. Accordingly, JLM has requested that state authorities permit
closure of the remediation of the Polychem facility. JLM does not believe that a
material amount of funds will be required to complete remediation at any site.
Accordingly, the Company has not accrued any amounts related to the remediation
of any sites.

On December 12, 1996, JLM entered into consulting and non-competition
agreements with two independent third parties. The terms of the consulting
agreements are from January 3, 1997 through December 31, 2003 and JLM is
committed to pay $130,000 per year, payable semi-annually beginning January 1,
1997 through December 31, 2002 and $200,000 on January 1, 2003. The terms of the
non-competition agreements will be from January 1, 1997 through December 31,
2006 and JLM is committed to pay $100,000 per year, payable semi-annually from
July 1, 1997 through December 31, 2002 and $270,000 on January 1, 2003. As of
December 31, 1996 and March 31, 1997, JLM has advanced $470,000 to the third
parties and, in conjunction with entering into the consulting and
non-competition agreements, these amounts shall be satisfied by setting them off
against the amounts owed by the third parties to JLM. As of December 31, 1996
and March 31, 1997, the $240,000 advance has been recorded in other assets-net
and the remaining $230,000 advance is recorded in prepaid expenses and other
current assets in the accompanying consolidated balance sheet. On October 24,
1996, the third parties signed promissory notes aggregating $470,000 and bearing
no interest for the monies that had been advanced.

13. PROFIT-SHARING PLAN

JLM has a defined contribution profit-sharing plan covering substantially
all of its employees. Prior to July 1995, JLM was contributing an amount equal
to 50% of the contribution of eligible employees, limited to the lesser of 3% of
the employees' compensation or $1,000. Effective July 1995, JLM changed its
contribution amount from the above to 100% of the contribution of eligible
employees, limited to a maximum amount of 6% of the employees' compensation.
JLM's contribution rate is determined annually at the beginning of each plan
year. The costs for this plan were approximately $15,000, $130,000, $278,000,
$64,000 and $65,000 for the years ended December 31, 1994, 1995 and 1996 and the
three months ended March 31, 1996 and 1997, respectively.

Included in selling, general and administrative expenses are discretionary
profit-sharing bonuses paid to employees based on performance or formulas. The
bonuses of JLM were approximately $447,000, $326,000, $581,000, $150,000 and
$100,000 for the years ended December 31, 1994, 1995 and 1996, and the three
months ended March 31, 1996 and 1997, respectively.

14. POLYCHEM LTD., INC.

During 1994, JLM formed and held 95% ownership of a new subsidiary, JLM
Acquisition, Inc. On August 8, 1994, JLM Acquisition, Inc. purchased
substantially all the business assets of Polychem, a chemical dyes distributor
in Dalton, Georgia, for $900,000 in cash and a promissory note for $1,240,000
payable in semi-annual installments over five years. The acquisition was
accounted for as a purchase transaction and, accordingly,

F-17
<PAGE> 69

JLM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the purchase price was allocated to the assets on the basis of estimated fair
market value on the date of purchase. The excess of purchase price over the fair
value of the tangible assets acquired was $1,515,000. See Note 16 for
discussions of the discontinued operations of Polychem.

15. JLM CHEMICALS, INC.

During 1995, JLM formed a new wholly-owned subsidiary, JLM Chemicals, Inc.
On June 8, 1995, JLM Chemicals, Inc. purchased certain of the business assets
and assumed certain liabilities of BTL Specialty Resins, Corp., a phenol and
acetone producer located in Blue Island, Illinois. The acquisition has been
accounted for as a purchase transaction and, accordingly, the purchase price was
allocated to the assets and liabilities on the basis of estimated fair market
value on the date of purchase. The fair value of the assets and liabilities, at
the date of acquisition, recorded in conjunction with the transaction are
presented below:

<TABLE>
<S> <C>
Inventories................................................. $ 2,983,555
Prepaid expenses and other current assets................... 598,505
Property and equipment...................................... 18,583,845
Other assets................................................ 325,000
Accounts payable and accrued expenses....................... (1,146,686)
Debt........................................................ (18,121,135)
------------
Net assets acquired, excluding cash............... 3,223,084
Cash........................................................ 1,776,916
------------
Net assets acquired............................... $ 5,000,000
============
</TABLE>

16. DISCONTINUED OPERATIONS

During 1995 and 1996, JLM's Board of Directors adopted formal plans to sell
the non-core business segments, consisting of Polychem, MAC Enterprises, Inc.
("Enterprises") and JLM Stables, Inc. ("Stables") (collectively the "Segments"),
as part of JLM's strategic focus on marketing and manufacturing of commodity and
specialty chemicals. The Segments have been accounted for as discontinued
operations in the accompanying consolidated financial statements, which requires
the plan of disposal to be carried out within one year.

On October 26, 1995, JLM completed the sale of substantially all the
operating assets of Polychem for cash of $882,237 and the assumption of related
liabilities. The purchaser has an irrevocable option for a period of three years
to buy the Polychem real property for $1; however, Polychem has retained title
to this real property. In conjunction with the sale of Polychem, JLM guaranteed
the payment of the note payable that was assumed by the purchaser of Polychem.

In December 1996, JLM entered into a plan to sell the assets of both
Enterprises and Stables. Based on management's review of the assumptions used in
determining the estimated gain or loss from the disposals of Enterprises and
Stables, JLM recorded a provision of $9,050, net of income taxes, for the loss
on disposal during 1996. The Company does not allocate any corporate overhead to
either Enterprises or Stables.

The operating results of the discontinued operations, which includes
interest expense associated with Enterprises and Stables, are summarized as
follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, MARCH 31,
----------------------------------- ---------------------
1994 1995 1996 1996 1997
---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Sales.......................... $1,927,003 $4,004,431 $ 244,909 $ 81,773 $ 65,853
Loss from discontinued
operations before income
taxes........................ (443,175) (745,506) (711,197) (137,117) (141,131)
Income tax benefit............. 214,115 298,204 282,932 54,847 56,452
Net loss....................... (229,060) (447,302) (428,265) (82,270) (84,679)
</TABLE>

F-18
<PAGE> 70

JLM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The net liabilities of discontinued operations are summarized as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, MARCH 31,
------------------------ ----------
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
Current assets................................. $3,542,884 $2,227,636 $2,257,197
Property and equipment, net.................... 330,062 4,735 2,706
Current liabilities............................ 3,705,882 2,712,711 3,733,189
Net liabilities of discontinued operations..... 936,333 1,384,741 1,473,286
</TABLE>

Current assets of discontinued operations as of December 31, 1995 and 1996
and March 31, 1997 includes assets held for sale of $2,246,594, $1,817,394 and
$1,759,746, respectively.

17. SEGMENT REPORTING

JLM's business consists of a marketing and a manufacturing segment. JLM's
manufacturing segment includes the operations of JLM Chemicals, Inc. and the
sale of acetone manufactured at the Mount Vernon Phenol Plant. JLM's marketing
segment includes its distribution, storage and terminaling operations and all
other sourcing operations. Marketing segment revenues include an assumed selling
commission determined in accordance with industry standards for the sale of
products manufactured at JLM Chemicals, Inc. The marketing segment also includes
an assumed allocation of revenues, costs of goods sold and expenses associated
with the sale of products sourced from the Mt. Vernon Phenol Plant, which
allocation is determined on a basis consistent with the commission for sale of
products manufactured at JLM Chemicals, Inc.

The following schedule presents information about JLM's continuing
operations in these segments and geographic locations for:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
------------------------------------------ -----------------------------
1994 1995 1996 1996 1997
------------ ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
INDUSTRY SEGMENT
Revenues:
Marketing.......... $193,835,542 $229,504,506 $176,274,489 $ 39,983,334 $ 64,186,446
Manufacturing...... 24,734,062 59,866,439 60,246,694 17,877,964 16,331,337
------------ ------------ ------------ ------------ ------------
$218,569,604 $289,370,945 $236,521,183 $ 57,861,298 $ 80,517,783
============ ============ ============ ============ ============
Operating Income:
Marketing.......... $ 4,045,205 $ 5,186,059 $ 5,011,196 $ 958,652 $ 1,367,147
Manufacturing...... 620,667 6,164,010 7,586,128 2,185,771 2,137,056
Corporate.......... (2,283,306) (2,615,870) (1,595,544) (469,491) (575,251)
------------ ------------ ------------ ------------ ------------
$ 2,382,566 $ 8,734,199 $ 11,001,780 $ 2,674,932 $ 2,928,952
============ ============ ============ ============ ============
Capital Expenditures:
Marketing.......... $ 1,220,974 $ 1,390,899 $ 592,422 $ 369,906 $ 211,986
Manufacturing...... -- 928,991 4,398,480 1,075,070 197,306
Corporate.......... -- -- 2,355,756 -- --
------------ ------------ ------------ ------------ ------------
$ 1,220,974 $ 2,319,890 $ 7,346,658 $ 1,444,976 $ 409,292
============ ============ ============ ============ ============
Depreciation and
Amortization:
Marketing.......... $ 518,244 $ 839,890 $ 794,031 $ 177,625 $ 183,062
Manufacturing...... -- 667,745 1,652,809 352,294 421,933
Corporate.......... 53,982 14,647 77,347 2,074 73,047
------------ ------------ ------------ ------------ ------------
$ 572,226 $ 1,522,282 $ 2,524,187 $ 531,993 $ 678,042
============ ============ ============ ============ ============
Identifiable Assets:
Marketing.......... $ 46,233,226 $ 49,865,521 $ 43,303,972 $ 64,752,440
Manufacturing...... 2,773,350 28,092,298 31,871,092 30,982,300
Corporate.......... 6,024,597 8,540,132 12,116,739 13,010,620
------------ ------------ ------------ ------------
$ 55,031,173 $ 86,497,951 $ 87,291,803 $108,745,360
============ ============ ============ ============
</TABLE>

F-19
<PAGE> 71

JLM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
------------------------------------------ -----------------------------
1994 1995 1996 1996 1997
------------ ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
GEOGRAPHIC
LOCATION
Revenues:
United States...... $206,962,650 $244,864,754 $191,382,570 $ 44,403,519 $ 66,296,031
Venezuela.......... 4,440,499 14,491,443 10,068,395 2,499,996 1,917,923
Holland............ -- 21,248,933 29,201,763 9,163,401 11,219,960
Other nations...... 7,166,455 8,765,815 5,868,455 1,794,382 1,083,869
------------ ------------ ------------ ------------ ------------
$218,569,604 $289,370,945 $236,521,183 $ 57,861,298 $ 80,517,783
============ ============ ============ ============ ============
Operating Income
(Loss):
United States...... $ 3,452,127 $ 9,324,264 $ 12,204,002 $ 3,114,977 $ 3,390,214
Venezuela.......... 922,201 1,290,877 (414,554) (189,797) (69,001)
Holland............ -- 117,666 571,046 70,378 83,682
Other nations...... 291,544 617,261 236,830 148,865 99,308
Corporate.......... (2,283,306) (2,615,869) (1,595,544) (469,491) (575,251)
------------ ------------ ------------ ------------ ------------
$ 2,382,566 $ 8,734,199 $ 11,001,780 $ 2,674,932 $ 2,928,952
============ ============ ============ ============ ============
Identifiable Assets:
United States...... $ 52,758,912 $ 74,896,376 $ 73,683,268 $ 68,792,586 $ 89,391,327
Venezuela.......... 1,069,341 4,233,208 6,112,667 6,176,157 5,570,842
Holland............ -- 5,374,039 6,169,386 4,905,991 12,582,697
Other nations...... 1,202,920 1,994,328 1,326,482 1,580,439 1,200,494
------------ ------------ ------------ ------------ ------------
$ 55,031,173 $ 86,497,951 $ 87,291,803 $ 81,455,173 $108,745,360
============ ============ ============ ============ ============
</TABLE>

18. SUBSEQUENT EVENTS

In April 1997, JLM entered into an agreement to purchase 25% of the common
stock of S. K. Chemicals Asia Pte. Ltd. ("S.K. Chemicals"), an international
petrochemical distributor, for $500,000 cash. As of December 31, 1996 and March
31, 1997, JLM has made a refundable deposit of $50,000 to S. K. Chemicals and
has recorded this deposit in other investments in the accompanying consolidated
balance sheet. In addition, in April 1997, JLM entered into an agreement to
purchase for $500,000 a 12.7% interest in S.K. Chemical Trading Pte ("S.K.
Trading"), a joint venture that intends to construct a petrochemical plant in
Vietnam. The agreements for S.K. Chemicals and S.K. Trading, collectively,
require up to an additional $500,000 over the following four years given certain
earnings, as defined.

On May 1, 1997, JLM entered into a three-year cancelable exclusive
marketing agreement with one of its suppliers. JLM has agreed to purchase 100%
of the supplier's excess styrene after the supplier has serviced its internal
needs, the needs of its affiliate businesses and those of its existing customer
base. If JLM purchases less than the agreed upon amounts, JLM shall pay a
percentage of the difference between the price contracted for and any lesser
price at which the supplier sells the unpurchased product.

On May 7, 1997, OTC refinanced their existing long-term debt and replaced
it with an unsecured term loan (the "Term Loan"). The proceeds from the Term
Loan will, among other items, be used to repay all of OTC's existing long-term
debt, to purchase all outstanding stock warrants, and to pay for management fees
outstanding to JLM. After the purchase of the stock warrants is complete, OTC
will be owned 50% by JLM and will continue to be accounted for on the equity
basis. In conjunction with the refinancing, JLM's terminaling contract was
canceled and a new, one year terminaling arrangement, which is effective January
1, 1997, was entered into. The

F-20
<PAGE> 72

JLM INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

new terminaling contract, which has no minimum throughput requirements, requires
JLM to pay for throughput at $16 per metric ton during the one year term and it
cancels the carryover rights from the old terminaling contract. Also in
conjunction with the refinancing, JLM's non-current note receivable, including
accrued interest, was converted to an investment in OTC and JLM's account
payable to OTC was forgiven and accounted for as a reduction in JLM's investment
in OTC. The amount of the account payable to OTC as of December 31, 1996 and
March 31, 1997 was approximately $2,000,000 and $2,500,000, respectively. In
addition, JLM has pledged its ownership interest in OTC to the other 50% owner
as security for certain contingent payment obligations required to be made
equally by JLM and the other 50% owner of OTC, if OTC has inadequate operating
funds.

On May 9, 1997, the Company completed the sale of the majority of the
assets of Enterprises for $1,075,000 cash. The sale resulted in an immaterial
loss and the proceeds of the sale were used to repay the entire outstanding loan
balance of Enterprises of approximately $905,000.

On May 22, 1997, the Company entered into agreements to purchase the 45%
minority interest of its European subsidiary, JLM (Europe) B.V. The Company will
purchase such minority interest based upon the net book value of the subsidiary
as of April 30, 1997. The purchase price of the minority interest is $98,000
cash.

In June 1997, JLM closed the purchase of all of the outstanding stock of
Aurora and Phoenix for $1,750,000 from the stockholders of these two companies.
The purchase price represented the fair market value of Aurora and Phoenix.
Aurora markets certain solvent chemicals, primarily phenol, benzene and acetone
and is owned 80% by the majority stockholder of JLM and 20% by an unrelated
third party. Phoenix leases railcars for use in the transportation of bulk
liquid chemicals and is owned 100% by the majority stockholder of JLM. The
transaction was accounted for similar to a pooling of interests. During the
years ended 1994, 1995 and 1996, and the three months ended March 31, 1996 and
1997, Aurora and Phoenix distributed $53,564, $147,080, $462,838, $140,337 and
$73,698 respectively, of its retained earnings to its stockholders.

On July 3, 1997, JLM approved a stock split resulting in an exchange of 1
share for 5,568 shares of common stock issued and outstanding. All share and per
share amounts have been retroactively adjusted for this split.

F-21
<PAGE> 73

INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors
JLM Industries, Inc. and Subsidiaries
Tampa, Florida

We have audited the consolidated balance sheets of JLM Industries, Inc. and
subsidiaries (the "Company") as of December 31, 1995 and 1996 and the related
consolidated statements of income, changes in stockholders' equity and of cash
flows for each of the three years in the period ended December 31, 1996 and have
issued our report thereon dated February 19, 1997 (July 3, 1997 as to Note 18)
(included in this Form S-1). Our audits also included the accompanying
consolidated financial statement schedule. This consolidated financial statement
schedule is the responsibility of the Company's management. Our responsibility
is to express an opinion based on our audits. In our opinion, such consolidated
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects the information set forth herein.

DELOITTE & TOUCHE LLP

Tampa, Florida
February 19, 1997

(July 3, 1997 as to Note 18)

F-22
<PAGE> 74

JLM INDUSTRIES, INC. AND SUBSIDIARIES

SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
AND (UNAUDITED) THREE MONTHS ENDED MARCH 31, 1996 AND 1997

<TABLE>
<CAPTION>
BALANCE AT
BEGINNING CHARGED TO BALANCE AT
DESCRIPTION OF YEAR EXPENSES DEDUCTIONS END OF YEAR
----------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Year Ended December 31, 1994:
Accumulated amortization(2)................. $ 65,452 $ 82,245 $ -- $147,697
Allowance for doubtful accounts............. 25,661 -- -- --
Year Ended December 31, 1995:
Accumulated amortization(2)................. 147,697 104,925 (44,188)(1) 208,434
Allowance for doubtful accounts............. 25,661 44,637 -- 70,198
Year Ended December 31, 1996:
Accumulated amortization(2)................. 208,434 389,595 -- 578,029
Allowance for doubtful accounts............. 70,198 383,662 -- 453,660
(Unaudited) Three Months Ended March 31, 1996:
Accumulated amortization(2)................. 208,434 32,252 -- 240,686
Allowance for doubtful accounts............. 70,198 -- -- 70,198
(Unaudited) Three Months Ended March 31, 1997:
Accumulated amortization(2)................. 578,029 86,869 -- 566,898
Allowance for doubtful accounts............. 453,860 -- -- 453,860
</TABLE>

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

(1) Represents the disposal of the goodwill for Polychem Ltd., Inc. in October
1995.
(2) Represents accumulated amortization of goodwill, deferred acquisition costs,
license fees, certain development costs and advances on non-competition
agreements.

F-23
<PAGE> 75

INDEPENDENT AUDITORS' REPORT

The Stockholders and
Board of Directors
JLM Industries, Inc. and Subsidiaries
Tampa, FL

We have audited the accompanying statement of revenues and direct costs of
the Blue Island, Illinois, location of BTL Specialty Resins Corp. ("Blue
Island"), for the period from April 1, 1995 through June 7, 1995. The statement
of revenues and direct costs is the responsibility of Blue Island's management.
Our responsibility is to express an opinion on the statement of revenues and
direct costs based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of revenues and direct costs is
free of material misstatement. An audit includes examining, on a test basis.
evidence supporting the amounts and disclosures in the statement of revenues and
direct costs. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
statement of revenues and direct costs presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the statement of revenues and direct costs presents fairly,
in all material respects, the results of revenues and direct costs of Blue
Island for the period from April 1, 1995 through June 7, 1995 in conformity with
generally accepted accounting principles.

As more fully described in Note 2 to the statement of revenues and direct
costs, Blue Island has been operated as a location of BTL Specialty Resins Corp.
As a result, certain expense allocations have not been made in the accompanying
statement of revenues and direct costs.

DELOITTE & TOUCHE LLP

January 29, 1997

F-24
<PAGE> 76

BLUE ISLAND, ILLINOIS
LOCATION OF BTL SPECIALTY RESINS CORP.

STATEMENT OF REVENUES AND DIRECT COSTS
FOR THE PERIOD FROM APRIL 1, 1995 THROUGH JUNE 7, 1995
(IN THOUSANDS)

<TABLE>
<S> <C>
Net sales................................................... $8,522
Cost of goods sold.......................................... 6,227
------
Gross profit.............................................. 2,295
Direct selling, general and administrative expenses......... 208
------
Excess of revenues over direct costs...................... $2,087
======
</TABLE>

See notes to statement of revenues and direct costs.

F-25
<PAGE> 77

BLUE ISLAND, ILLINOIS
LOCATION OF BTL SPECIALTY RESINS CORP.

NOTES TO STATEMENT OF REVENUES AND DIRECT COSTS
FOR THE PERIOD FROM APRIL 1, 1995 THROUGH JUNE 7, 1995
(IN THOUSANDS)

1. DESCRIPTION OF BUSINESS

On June 8, 1995, JLM Chemicals, Inc., a wholly-owned subsidiary of JLM
Industries, Inc., acquired substantially all of the business assets of the Blue
Island, Illinois location of BTL Specialty Resins Corp. ("Blue Island") for
$19,175. Blue Island is a manufacturer of phenol and acetone.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation -- The accompanying statement of revenues and direct
costs reflects the operations of Blue Island, operating as a location of BTL
Specialty Resins, Corp., and may not necessarily be indicative of the financial
results had Blue Island been operating as a separate entity. Allocations for
certain expenses such as interest, corporate overhead and income taxes have not
been made as Blue Island could not determine a reasonable methodology for
allocation and Blue Island believes that any allocation may not be indicative of
the actual costs incurred by Blue Island.

Plant and Equipment -- Provision is made for depreciation primarily on the
straight-line method based on estimates of useful lives ranging form 12 to 20
years. Leasehold improvements and capital leases are amortized over the life of
the respective lease. Depreciation and amortization expense was approximately
$386 for the period from April 1, 1995 through June 7, 1995.

Inventories -- Inventories are valued at the lower of cost (first-in,
first-out) or market.

Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of revenues and
direct costs during the reporting period. Actual operating results could differ
from those estimated.

Revenue Recognition -- Blue Island recognizes revenue when products are
shipped.

3. COMMITMENTS AND CONTINGENCIES

Blue Island leases certain machinery, equipment and facilities under
non-cancelable lease agreements which expire at various dates through 2000.
These leases generally contain renewal options and require Blue Island to pay
taxes, insurance, maintenance and other expenses in addition to the minimum base
rentals.

The following is a schedule by year of future minimum lease payments
required under operating leases that have non-cancelable terms in excess of one
year as of June 7, 1995:

Rental expense under operating leases was approximately $45 for the period
from April 1, 1995 through June 7, 1995.

F-26
<PAGE> 78

[PHOTO OF OLEFINS MARKETING JOINT VENTURE, BAYPORT, TEXAS]

[PHOTO RAIL CAR STORAGE AND TRANSPORTATION]

<PAGE> 79

======================================================

NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 7
Use of Proceeds....................... 12
Dividend Policy....................... 12
Capitalization........................ 13
Dilution.............................. 14
Selected Consolidated Financial
Data................................ 15
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 17
Business.............................. 27
Management............................ 37
Certain Transactions.................. 40
Principal and Selling Stockholders.... 42
Description of Capital Stock.......... 42
Shares Eligible for Future Sale....... 46
Underwriting.......................... 48
Legal Matters......................... 49
Experts............................... 49
Additional Information................ 49
Index to Consolidated Financial
Statements.......................... F-1
</TABLE>

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

UNTIL , 1997 (25 DAYS AFTER THE COMMENCEMENT OF THE OFFERING),
ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
======================================================

======================================================

2,300,000 SHARES

[JLM LOGO]

JLM INDUSTRIES, INC.

COMMON STOCK
-------------------------

PROSPECTUS
-------------------------
OPPENHEIMER & CO., INC.

A.G. EDWARDS & SONS, INC.
, 1997

======================================================
<PAGE> 80

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Set forth below is an estimate (except for the registration and NASD filing
fees) of the fees and expenses payable by the registrant in connection with the
issuance and distribution of the common stock.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 11,222
NASD filing fee............................................. 4,203
Nasdaq listing fees......................................... 34,750
Printing and engraving expenses............................. 150,000*
Accounting fees and expenses................................ 150,000*
Legal fees and expenses..................................... 200,000*
Blue Sky fees and expenses.................................. 5,000*
Transfer Agent's fees and expenses.......................... 2,500*
Miscellaneous............................................... 42,325
--------
Total............................................. $600,000*
========
</TABLE>

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

* Estimated

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145(a) of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a Delaware corporation may indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no cause to believe his conduct was unlawful.

DGCL Section 145(b) provides that a Delaware corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted under similar standards, except that no
indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the corporation unless and
only to the extent that the court in which such action or suit was brought shall
determine that despite the adjudication of liability, such person is fairly and
reasonably entitled to be indemnified for such expenses which the court shall
deem proper.

DGCL Section 145 further provides that to the extent a director or officer
of a corporation has been successful in the defense of any action, suit or
proceeding referred to in subsections (a) and (b) or in the defense of any
claim, issue, or matter therein, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith; that
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; and that the
corporation may purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against him or
incurred by him in any such capacity or arising out of his status as such
whether or not the corporation would have the power to indemnify him against
such liabilities under such Section 145.

DGCL Section 102(b)(7) provides that a corporation in its original
certificate of incorporation or an amendment thereto validly approved by
stockholders may eliminate or limit personal liability of members of its

II-1
<PAGE> 81

board of directors or governing body for breach of a director's fiduciary duty.
However, no such provision may eliminate or limit the liability of a director
for breaching his duty of loyalty, failing to act in good faith, engaging in
intentional misconduct or knowingly violating a law, paying a dividend or
approving a stock repurchase which was illegal, or obtaining an improper
personal benefit. A provision of this type has no effect on the availability of
equitable remedies, such as injunction or rescission, for breach of fiduciary
duty. The Company's Certificate of Incorporation (as to be in effect after
completion of the Offering to which this Registration Statement relates)
contains such a provision.

The Company's Bylaws (as to be in effect after completion of the Offering
to which this Registration Statement relates) further provides that the Company
may indemnify its officers and directors and, to the extent authorized by the
Board of Directors, employees and agents of the Company, to the fullest extent
permitted by and in the manner permissible under the laws of the State of
Delaware.

In addition, prior to the completion of the Offering, the Company intends
to enter into agreements (the "Indemnification Agreements") with each of the
directors and certain officers of the Company pursuant to which the Company will
agree to indemnify each such person against claims, liabilities, damages,
expenses, losses, costs, penalties or amounts paid in settlement (collectively,
"Losses") incurred by such person and arising out of his capacity or service as
a director, officer, employee and/or agent of the Company to the maximum extent
permitted by applicable law. In addition, each such person shall be entitled to
an advance of expenses to the maximum extent authorized or permitted by law to
meet the obligations indemnified against. The Indemnification Agreements also
obligate the Company to purchase and maintain insurance for the benefit and on
behalf of each of its directors insuring such director in or arising out of his
capacity as a director, officer, employee and/or agent of the Company. The
Company has purchased such insurance, which provides coverage with respect to
liabilities that may arise under the statutory provisions referred to above and
other liabilities as well, including certain liabilities that could arise under
the Securities Act of 1933 and against which such persons might not be
indemnified by the Company.

The underwriters also will agree to indemnify the directors and officers of
the Company against certain liabilities as set forth in Section 7(c) of the
Underwriting Agreement (see Exhibit 1).

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S> <C>
1 -- Form of Underwriting Agreement
3.1 -- Articles of Incorporation, as amended
3.2* -- Form of Amended and Restated Articles of Incorporation
3.3 -- Bylaws
3.4* -- Form of Amended and Restated Bylaws
4* -- Form of Common Stock Certificate
5* -- Opinion of Trenam, Kemker, Scharf, Barkin, Frye, O'Neill &
Mullis, as to the legality of the Common Stock Being
Registered
10.1 -- Authorized Distributor Agreement between GE Petrochemicals,
Inc. and JLM Marketing, Inc. for Styrene
10.2+ -- Memorandum of Agreement between Sasol Chemical Industries
(PTY) Ltd. and JLM Marketing, Inc. for N-Propanol
10.3+ -- Memorandum of Agreement between Sasol Chemical Industries
(PTY) Ltd. and JLM Marketing, Inc. for Acetone
10.4+ -- Memorandum of Agreement between Sasol Chemical Industries
(PTY) Ltd. and JLM Marketing, Inc. for Methyl Ethyl Ketone
</TABLE>

II-2
<PAGE> 82

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S> <C>
10.5+ -- Acetone Sales Agreement between Mt. Vernon Phenol Plant
Partnership, JLM Marketing, Inc. and JLM Industries, Inc.
10.6 -- Asset Purchase Agreement by and among BTL Specialty Resins
Corp. and JLM Chemicals, Inc. providing for the acquisition
of the Blue Island (Illinois) Phenol Plant, as amended
10.7 -- Propane/Propylene Agreement between Clark Oil & Refining
Corporation and BTL Specialty Resins Corp.
10.8 -- Q-Max Process License Agreement between BTL Specialty Resins
Corp. and UOP
10.9 -- Credit Agreement among JLM Chemicals, Inc., The CIT
Group/Equipment Financing, Inc. and The CIT Group/Business
Credit, Inc., as amended
10.10 -- Security Agreement by JLM Chemicals, Inc. in favor of the
Lenders and The CIT Group/Equipment Financing, Inc.
10.11 -- Pledge Agreement by JLM Industries, Inc. in favor of the
Lenders and The CIT Group/Equipment Financing, Inc.
10.12 -- Mortgage, Assignment of Leases and Rents and Security
Agreement from JLM Chemicals, Inc. to The CIT
Group/Equipment Financing, Inc., as corrected and modified
10.13 -- Partnership Agreement of Mt. Vernon Phenol Plant Partnership
10.14 -- Intercreditor Agreement between JLM Marketing, Inc., JLM
Industries, Inc., JLM Terminals, Inc., JLM International,
Olefins Marketing, Inc., State Street Bank and Trust
Company, Caisse Nationale De Credit Agricole and Standard
Chartered Bank New York Branch
10.15 -- Master Promissory Note by JLM International, Inc. and
Olefins Marketing, Inc. in favor of Caisse Nationale De
Credit Agricole
10.16 -- Guaranty Agreement by JLM Industries, Inc. to Caisse
Nationale De Credit Agricole, New York Branch
10.17 -- Security Agreement between Olefins Marketing, Inc. and
Caisse Nationale De Credit Agricole, New York Branch
10.18 -- Security Agreement between JLM International, Inc. and
Caisse Nationale De Credit Agricole, New York Branch
10.19* -- Amended and Restated Credit Agreement among JLM Industries,
Inc., JLM Marketing, Inc., JLM Terminals, Inc., JLM
International Inc., Olefins Marketing, Inc., John L.
MacDonald and State Street Bank and Trust Company, as
amended
10.20 -- Facility Letter between Standard Chartered Bank and Olefins
Marketing
10.21 -- Security Agreement by Olefins Marketing to Standard
Chartered Bank
10.22* -- Security Agreement by JLM International, Inc. to Standard
Chartered Bank
10.23 -- Continuing Guaranty by JLM International, Inc. and Olefins
Marketing Corp. in favor of Standard Chartered Bank
10.24 -- Facility letter between Generale Bank and JLM Industries
10.25 -- Corporate Guarantee by JLM Industries, Inc. to Generale Bank
10.26* -- Agreement by and among Union Carbide Corporation, D-S
Splitter, Inc., JLM Industries, Inc. and Olefins Terminal
Corporation
10.27* -- Pledge and Security Agreement by JLM Industries, Inc. to
Ultramar Diamond Shamrock Corporation
10.28* -- Management, Operating and Stockholders Agreement of Olefins
Terminal Corporation between D-S Splitter, Inc., Ultramar
Diamond Shamrock Corporation, JLM Industries, Inc., Olefins
Marketing, Inc. and Olefins Terminal Corporation
</TABLE>

II-3
<PAGE> 83

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
10.29* -- Stockholders Agreement dated effective as of May 1, 1997 by and between D-S Splitter, JLM Industries,
Inc., and Olefins Terminal Corporation
10.30* -- Investment Agreement by and between JLM Industries, Inc. and Tan Siew Kiat
10.31* -- Agreement for Sale and Purchase of Common Stock between John L. Macdonald and Gene Harmeyer, as owners
of the capital stock of Aurora Chemical, Inc., and JLM Marketing, Inc.
10.32* -- Agreement for Sale and Purchase of Common Stock between John L. Macdonald, owner of the capital stock of
Phoenix Tank Car Corp., and JLM Marketing, Inc.
10.33* -- Form of Indemnification Agreement for Officers and Directors
10.34* -- Form of 1997 Employee Stock Purchase Plan
10.35* -- Form of Long Term Incentive Plan
10.36* -- Form of Nonemployee Directors' Stock Option Plan
10.37* -- Assignment and Assumption Agreement between Ashland Chemical, Inc. and JLM Terminals, Inc.
10.38* -- Asset Purchase Agreement between Union Oil Company of California and Ashland Chemical, Inc.
21* -- Subsidiaries of the Registrant
23.1* -- Consent of Trenam, Kemker, Scharf, Barkin, Frye, O'Neill, & Mullis (contained in Exhibit 5)
23.2* -- Consent of Deloitte & Touche LLP to the consolidated financial statements of JLM Industries, Inc. and
subsidiaries
23.3* -- Consent of Deloitte & Touche LLP to the Statement of Revenues and Direct Costs of the Blue Island,
Illinois, location of BTL Specialty Resins Corp.
23.4 -- Consent of J. Robert Mehall
23.5 -- Consent of Jerry L. Weinstein
23.6* -- Consent of Roger C. Kahn
27.1 -- Financial Data Schedule for the year ended December 31, 1996
27.2 -- Financial Data Schedule for the three months ended March 31, 1997
</TABLE>

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

* Filed herewith, all other exhibits previously filed

+ Confidential treatment has been requested with respect to portions of this
Exhibit.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 14), or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt deliver to each purchaser.

II-4
<PAGE> 84

The undersigned registrant hereby undertakes that:

i. For purposes of determining any liability under the Securities act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4), or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

ii. For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-5
<PAGE> 85

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this amendment to the registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tampa,
State of Florida, on the 3rd day of July, 1997.

JLM INDUSTRIES, INC.

By: /s/ JOHN L. MACDONALD
------------------------------------
John L. Macdonald,
President and Chief Executive
Officer

Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JOHN L. MACDONALD President, Chief Executive Officer July 3, 1997
- --------------------------------------------------- and Director (Principal Executive
John L. Macdonald Officer)

/s/ FRANK A. MUSTO Chief Financial Officer, Vice July 3, 1997
- --------------------------------------------------- President and Director (Principal
Frank A. Musto Financial Officer and Principal
Accounting Officer)

/s/ THADDEUS J. LELEK Vice President and Director Vice July 3, 1997
- --------------------------------------------------- President and Director
Thaddeus J. Lelek

/s/ WILFRED J. KIMBALL Vice President and Director July 3, 1997
- ---------------------------------------------------
Wilfred J. Kimball
</TABLE>

II-6

<PAGE> 1
EXHIBIT 3.2

RESTATED CERTIFICATE OF INCORPORATION
OF
JLM INDUSTRIES, INC.

The name of this corporation is JLM Industries, Inc., and the original
Certificate of Incorporation of the corporation was filed with the Secretary of
State of the State of Delaware on March 19, 1986. Amendments to the
Certificate of Incorporation were filed with the Secretary of State of the
State of Delaware on December 27, 1991, April 14, 1992 and May 23, 1997. The
original Certificate of Incorporation of this corporation, as amended, is
hereby amended and restated to read in its entirety as follows:

"ARTICLE FIRST

NAME

The name of this corporation shall be: JLM Industries, Inc.

ARTICLE SECOND

REGISTERED OFFICE AND AGENT

The registered office of this corporation in the State of Delaware is
located at 229 SOUTH STATE STREET, DOVER, Delaware, and the name of its
registered agent at such address is THE UNITED STATES CORPORATION COMPANY.

ARTICLE THIRD

GENERAL PURPOSE

The purposes of this corporation are to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware, and any amendments or successor thereto.

ARTICLE FOURTH

CAPITAL STOCK

1. Authorized Capitalization.

(a) The total number of shares of capital stock authorized to
be issued by this corporation shall be:
<PAGE> 2

JLM INDUSTRIES, INC.
RESTATED CERTIFICATE OF INCORPORATION PAGE 2

30,000,000 shares of common stock, par value $.01 per
share (the "Common Stock"); and

5,000,000 shares of preferred stock, par value $.01 per
share (the "Preferred Stock").

At the effective time of this Restated Certificate of
Incorporation, each share of outstanding Common Stock, without any
action on the part of the holder thereof, shall be automatically split
into Five Thousand Five Hundred Sixty-Eight (5,568) shares of Common
Stock.

(b) The designation, relative rights, preferences and
liabilities of each class of stock, itemized by class, shall be as
follows:

(i) Preferred. Shares of the Preferred Stock may be
issued from time to time in one or more series. The board of
directors of this corporation (hereafter the "Board of
Directors" or "Board") by resolution shall establish each
series of Preferred Stock and fix and determine the number of
shares and the designations, preferences, limitations and
relative rights of each such series, provided that all shares
of the Preferred Stock shall be identical except as to the
following relative rights and preferences, as to which there
may be variations fixed and determined by the Board of
Directors between different series:

(A) The rate or manner of payment of
dividends.

(B) Whether shares may be redeemed and, if
so, the redemption price and the terms and conditions
of redemption.

(D) Sinking fund provisions, if any, for the
redemption or purchase of shares.

(E) The terms and conditions, if any, on
which the shares may be converted.

(F) Voting rights, if any.

(G) Any other rights or preferences now or
hereafter permitted by the laws of the State of
Delaware as variations between different series of
preferred stock.
<PAGE> 3

JLM INDUSTRIES, INC.
RESTATED CERTIFICATE OF INCORPORATION PAGE 3

(ii) Common. Each share of Common Stock shall be
entitled to one vote on all matters submitted to a vote of
stockholders, except matters required to be voted on
exclusively by holders of Preferred Stock or of any series of
Preferred Stock. The holders of Common Stock shall be entitled
to such dividends as may be declared by the Board of Directors
from time to time, provided that required dividends, if any,
on the Preferred Stock have been paid or provided for. In the
event of the liquidation, dissolution, or winding up, whether
voluntary or involuntary, of this corporation, the assets and
funds of this corporation available for distribution to
stockholders, and remaining after the payment to holders of
Preferred Stock of the amounts to which they are entitled,
shall be divided and paid to the holders of the Common Stock
according to their respective shares.

2. No Preemptive Rights.

(a) Preferred Stock. Unless otherwise specifically provided
in the terms of the Preferred Stock, the holders of any class of
Preferred Stock of this corporation shall have no preemptive right to
subscribe for and purchase their proportionate share of any additional
Preferred Stock (of the same class or otherwise) or Common Stock
issued by this corporation, from and after the issuance of the shares
originally subscribed for by the stockholders of this corporation,
whether such additional shares be issued for cash, property, services
or any other consideration and whether or not such shares be presently
authorized or be authorized by subsequent amendment to this Restated
Certificate of Incorporation.

(b) Common Stock. The holders of Common Stock of this
corporation shall have no preemptive right to subscribe for and
purchase their proportionate share of any additional Preferred Stock
or Common Stock issued by this corporation, from and after the
issuance of the shares originally subscribed for by the stockholders
of this corporation, whether such additional shares be issued for
cash, property, services or any other consideration and whether or not
such shares be presently authorized or be authorized by subsequent
amendment to this Restated Certificate of Incorporation.

3. Payment for Stock. The consideration for the issuance of
shares of capital stock may be paid, in whole or in part, in cash, in
promissory notes, in other property (tangible or intangible), in labor or
services actually performed for this corporation, or in other benefits to this
corporation at a fair valuation to be fixed by the Board of Directors. When
issued, all shares of stock shall be fully paid and non-assessable.

4. Treasury Stock. The Board of Directors of this corporation
shall have the authority to acquire by purchase and hold from time to time any
shares of its issued and outstanding capital stock for such consideration and
upon such terms and conditions as the Board of Directors in its discretion
shall deem proper and reasonable in the interest of this corporation.
<PAGE> 4

JLM INDUSTRIES, INC.
RESTATED CERTIFICATE OF INCORPORATION PAGE 4

ARTICLE FIFTH

DIRECTORS

1. Number. This corporation's Board of Directors shall consist
of not less than three (3) directors and not more than nine (9) directors, the
exact number of directors to be determined from time to time by resolution
adopted by the affirmative vote of a majority of the Board of Directors. A
director shall hold office until the next annual meeting of stockholders and
until his or her successor shall be elected and shall qualify, subject,
however, to prior death, resignation, retirement, disqualification or removal
from office. Notwithstanding the foregoing, whenever the holders of any one or
more classes or series of Preferred Stock issued by this corporation shall have
the right, voting separately by class or series, to elect directors at an
annual or special meeting of stockholders, the election, term of office,
filling of vacancies and other features of such directorships shall be governed
by the terms of this Restated Certificate of Incorporation (including any
certificate of designations relating to any series of Preferred Stock or Series
Common Stock) or resolutions adopted by the Board of Directors pursuant to this
Article Fifth.

2. Powers. The business and affairs of this corporation shall be
managed by the Board of Directors, which may exercise all such powers of this
corporation and do all such lawful acts and things as are not by law directed
or required to be exercised or done by the stockholders.

3. Quorum. A quorum for the transaction of business at all
meetings of the Board of Directors shall be a majority of the number of
directors determined from time to time to comprise the Board of Directors, and
the act of a majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board.

4. Removal. Subject to the rights, if any, of the holders of
shares of Preferred Stock then outstanding, any or all of the directors of this
corporation may be removed with or without cause from office at any annual or
special meeting of stockholders. Notice of any such annual or special meeting
of stockholders shall state that the removal of a director or directors is
among the purposes of the meeting and shall state the grounds therefor.
Directors may be removed by the stockholders with cause by the affirmative vote
of at least a majority of the voting power of all shares of the corporation
entitled to vote generally in the election of directors voting as a single
class. Directors may be removed without cause only by the affirmative vote of
at least eighty percent (80%) of the voting power of all shares of the
corporation entitled to vote generally in the election of directors voting as a
single class.

5. Vacancies. Any newly created directorship on the Board of
Directors that results from an increase in the number of directors and any
vacancy occurring in the Board of Directors resulting from death, resignation,
disqualification, removal or other cause, may only be filled by a majority of
the directors then in office, although less than a quorum, or by a sole
remaining director. Any director elected to fill a vacancy resulting from an
increase in the number of directors or otherwise shall hold office until the
next annual meeting of stockholders and until such director's successor shall
be elected and shall qualify, subject, however, to prior death, resignation,
retirement, disqualification
<PAGE> 5

JLM INDUSTRIES, INC.
RESTATED CERTIFICATE OF INCORPORATION PAGE 5

or removal from office. No decrease in the number of directors constituting
the Board of Directors shall shorten the term of any incumbent director.

6. Nominations and Elections. Subject to the rights, if any, of
the holders of shares of Preferred Stock then outstanding, only persons who are
nominated in accordance with the following procedures shall be eligible for
election as directors at meetings of stockholders.

Nominations of persons for election to the Board of Directors of this
corporation may be made at a meeting of stockholders by or at the direction of:
(a) the Board of Directors; (b) by any nominating committee or person appointed
by the Board; (c) or by any stockholder of this corporation entitled to vote
for the election of directors at the meeting who complies with the notice
procedures set forth in this Section 6, Article Fifth.

Nominations by stockholders shall be made pursuant to timely notice in
writing to the Secretary of this corporation. To be timely, a stockholder's
notice of nominations of persons for election to the Board of Directors at an
annual meeting must be delivered to, or mailed and received at, the principal
executive offices of this corporation not less than 70 nor more than 90 days
prior to the date of the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the annual
meeting is advanced by more than 20 days, or delayed by more than 70 days, from
such anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the ninetieth day prior to such annual meeting and
not later than the close of business on the later of the seventieth day prior
to such annual meeting or the tenth day following the day on which public
announcement of the date of such meeting is first made. To be timely, a
stockholder's notice of nominations of persons for election to the Board of
Directors at a special meeting shall be delivered to, or mailed and received
at, the principal executive offices of this corporation not earlier than the
ninetieth day prior to such special meeting and not later than the close of
business on the later of the seventieth day prior to such special meeting or
the tenth day following the day on which public announcement of such meeting is
first made of the date of the special meeting and of the nominees proposed by
the Board of Directors to be elected at such meeting.

A stockholder's notice to the Secretary shall set forth (a) as to each
person whom the stockholder proposes to nominate for election or reelection as
a director, (i) the name, age, business address and residence address of the
person, (ii) the principal occupation or employment of the person, (iii) the
class and number of shares of capital stock of this corporation which are
beneficially owned by the person and (iv) any other information relating to the
person that is required to be disclosed in solicitations for proxies for
election of directors pursuant to Schedule 14A under the Securities Exchange
Act of 1934, as amended; and (b) as to the stockholder giving the notice (i)
the name and address, as they appear on this corporation's books, of the
stockholder and (ii) the class and number of shares of this corporation's stock
which are beneficially owned by the stockholder on the date of such stockholder
notice. This corporation may require any proposed nominee to furnish such
other information as may reasonably be required by this corporation to
determine the eligibility of such proposed nominee to serve as a director of
this corporation.
<PAGE> 6

JLM INDUSTRIES, INC.
RESTATED CERTIFICATE OF INCORPORATION PAGE 6

The presiding officer of the meeting shall determine and declare at
the meeting whether the nomination was made in accordance with the terms of
this Section 6, Article Fifth. If the presiding officer determines that a
nomination was not made in accordance with the terms of this Article Fifth, he
or she shall so declare at the meeting and any such defective nomination shall
be disregarded.

ARTICLE SIXTH

STOCKHOLDER MEETINGS

1. Annual Meetings. At an annual meeting of stockholders, only
such business shall be conducted, and only such proposals shall be acted upon,
as shall have been brought before the annual meeting (a) by, or at the
direction of, the Chairman of the Board of Directors, or (b) by any stockholder
of this corporation who complies with the notice procedures set forth in this
Article Sixth and the requirements of Rule 14a-8 under the Securities Exchange
Act of 1934.

For a proposal to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing
to the Secretary of this corporation. To be timely, a stockholder's notice
must be delivered to, or mailed and received at, the principal executive
offices of this corporation not less than 70 nor more than 90 days prior to the
first anniversary of the scheduled annual meeting; provided, however, that in
the event that the date of the annual meeting is advanced by more than 20 days,
or delayed by more than 70 days, from such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the ninetieth
day prior to such annual meeting and not later than the close of business on
the later of the seventieth day prior to such annual meeting or the tenth day
following the day on which public announcement of the date of such meeting is
first made.

A stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting, in addition
to any other information as may be required by law, (a) a brief description of
the proposal desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (b) the name and address,
as they appear on this corporation's books, of the stockholder proposing such
business and any other stockholders known by such stockholder to be supporting
such proposal, (c) the class and number of shares of this corporation's stock
which are beneficially owned by the stockholder on the date of such stockholder
notice and by any other stockholders known by such stockholder to be supporting
such proposal on the date of such stockholder notice, and (d) any financial
interest of the stockholder in such proposal.

The presiding officer of the annual meeting shall determine and
declare at the annual meeting whether the stockholder proposal was made in
accordance with the terms of this Article Sixth. If the presiding officer
determines that a stockholder proposal was not made in accordance with the
terms of this Article Sixth, he or she shall so declare at the annual meeting
and any such proposal shall not be acted upon at the annual meeting.
<PAGE> 7

JLM INDUSTRIES, INC.
RESTATED CERTIFICATE OF INCORPORATION PAGE 7

This provision shall not prevent the consideration and approval or
disapproval at the annual meeting of reports of officers, directors and
committees of the Board of Directors, but, in connection with such reports, no
new business shall be acted upon at such annual meeting unless stated, filed
and received as herein provided.

2. Special Meetings. Except as otherwise required by law and
subject to the rights of the holders of any series of Preferred Stock then
outstanding, special meetings of the stockholders of this corporation for any
purpose or purposes may be called at any time by (a) a vote of the majority of
the Board of Directors, (b) the Chairman of the Board of Directors, or (c) the
Chief Executive Officer of this corporation. Special meetings of the
stockholders of this corporation may not be called by any other person or
persons. At any special meeting of stockholders, only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been set
forth in the notice of such special meeting.

ARTICLE SEVENTH

AMENDMENTS

This corporation reserves the right to amend, alter, change or repeal
any provisions contained in this Restated Certificate of Incorporation in the
manner now or hereafter prescribed by statute, and all rights conferred upon
the stockholders herein are subject to this reservation. Notwithstanding
anything contained in this Restated Certificate of Incorporation to the
contrary, the affirmative vote of at least 80% of the outstanding shares of all
shares of stock of the corporation entitled to vote generally in the election
of directors, voting as a single class shall be required to amend or repeal
this Article Seventh, Article Fifth, Article Sixth, or Article Eighth or to
adopt any provision inconsistent therewith.

ARTICLE EIGHTH

BYLAWS

The Board of Directors shall be authorized to make, amend, alter,
change, add to or repeal the Bylaws of the corporation in any manner not
inconsistent with the laws of the State of Delaware, subject to the power of
the stockholders to amend, alter, change, add to or repeal the Bylaws made by
the Board of Directors. Notwithstanding anything contained in this Restated
Certificate of Incorporation to the contrary, the affirmative vote of the
holders of at least eighty percent (80%) in voting power of all the shares of
the corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required in order for the stockholders to
alter, amend or repeal any provision of the Bylaws which is to the same effect
as Article Fifth, Article Sixth, and Article Eighth of this Restated
Certificate of Incorporation or to adopt any provision inconsistent therewith."
<PAGE> 8

JLM INDUSTRIES, INC.
RESTATED CERTIFICATE OF INCORPORATION PAGE 8

JLM Industries, Inc. does hereby further certify that this Restated
Certificate of Incorporation was duly adopted by unanimous written consent of
the stockholders in accordance with the provisions of Section 228, 242 and 245
of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, JLM INDUSTRIES, INC. has caused this Restated
Certificate of Incorporation to be executed by its President this _________ day
of July, 1997.

JLM INDUSTRIES, INC.

By:
-----------------------------
John L. Macdonald, President

<PAGE> 1
EXHIBIT 3.4

* * * * * *

AMENDED AND RESTATED
BYLAWS

JLM INDUSTRIES, INC.

* * * * * *
<PAGE> 2

AMENDED AND RESTATED
BYLAWS
OF
JLM INDUSTRIES, INC.
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Title Page
<S> <C> <C>
ARTICLE I Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
Section 1. PRINCIPAL OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
Section 2. OTHER OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

ARTICLE II Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
Section 1. ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
Section 2. SPECIAL MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
Section 3. PLACE OF MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
Section 4. NOTICE OF MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
Section 5. WAIVER OF CALL AND NOTICE OF MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
Section 6. QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
Section 7. VOTING LISTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
Section 8. VOTING OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
Section 9. PROXIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
Section 10. INFORMAL ACTION BY STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
Section 10. INSPECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.

ARTICLE III Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
Section 1. GENERAL POWERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
Section 2. NUMBER, CLASSIFICATION, TENURE AND QUALIFICATIONS . . . . . . . . . . . . . . . . . . . . . 5.
Section 3. ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
Section 4. REGULAR MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
Section 5. SPECIAL MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
Section 6. NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
Section 7. QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
Section 8. MANNER OF ACTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
Section 9. REMOVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
Section 10. VACANCIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
Section 11. COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
Section 12. PRESUMPTION OF ASSENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
Section 13. INFORMAL ACTION BY BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
Section 14. MEETING BY TELEPHONE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
Section 15. NOMINATIONS AND ELECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
</TABLE>

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ARTICLE IV Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
Section 1. OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
Section 2. ELECTION AND TERM OF OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
Section 3. RESIGNATION AND REMOVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
Section 4. VACANCIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
Section 5. DUTIES OF OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
Section 6. SALARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
Section 7. DELEGATION OF DUTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
Section 8. DISASTER EMERGENCY POWERS OF ACTING OFFICERS . . . . . . . . . . . . . . . . . . . . . . . 10.

ARTICLE V Executive and Other Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
Section 1. CREATION OF COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
Section 2. EXECUTIVE COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
Section 3. OTHER COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
Section 4. REMOVAL OR DISSOLUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
Section 5. VACANCIES ON COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
Section 6. MEETINGS OF COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
Section 7. ABSENCE OF COMMITTEE MEMBERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
Section 8. QUORUM OF COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
Section 9. MANNER OF ACTING OF COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
Section 10. MINUTES OF COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
Section 11. COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
Section 12. INFORMAL ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.

ARTICLE VI Indemnification of Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . 12.
Section 1. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
Section 2. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION . . . . . . . . . . . . . . . . . . . . . . . 13.
Section 3. OBLIGATION TO INDEMNIFY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
Section 4. DETERMINATION THAT INDEMNIFICATION IS PROPER . . . . . . . . . . . . . . . . . . . . . . . 13.
Section 5. EVALUATION AND AUTHORIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
Section 6. PREPAYMENT OF EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
Section 7. NONEXCLUSIVITY AND LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
Section 8. CONTINUATION OF INDEMNIFICATION RIGHT; DEFINITIONS . . . . . . . . . . . . . . . . . . . . 14.
Section 9. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.

ARTICLE VII Interested Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
Section 1. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
Section 2. DETERMINATION OF QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
Section 3. APPROVAL BY STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.

ARTICLE VIII Certificates of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
Section 1. CERTIFICATES FOR SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
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Section 2. TRANSFER AGENTS AND REGISTRARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
Section 3. TRANSFER OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
Section 4. LOST CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
Section 5. SIGNATURES OF PAST OFFICERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.

ARTICLE IX Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.

ARTICLE X Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.

ARTICLE XI Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.

ARTICLE XII Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.

ARTICLE XIII Stock in Other Corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.

ARTICLE XIV Emergency Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.

Section 1. SCOPE OF EMERGENCY BYLAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.
Section 2. CALL AND NOTICE OF MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.
Section 3. QUORUM AND VOTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.
Section 4. APPOINTMENT OF TEMPORARY DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.
Section 5. MODIFICATION OF LINES OF SUCCESSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.
Section 6. CHANGE OF PRINCIPAL OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.
Section 7. LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.
Section 8. AMENDMENT OR REPEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.

ARTICLE XV Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.

ARTICLE XVI Precedence of Law and Articles of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . 20.
</TABLE>

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EXHIBIT 3.4

AMENDED AND RESTATED
BYLAWS
OF
JLM INDUSTRIES, INC.

ARTICLE I

OFFICES

SECTION 1. PRINCIPAL OFFICE. The principal office of JLM Industries,
Inc. (the "Corporation") shall be in the City of Tampa, County of Hillsborough
and State of Florida or at such other place within or without the State of
Florida as the Board of Directors of this Corporation (the "Board of Directors"
or the "Board") or the officers of this Corporation acting within their
authority shall from time to time determine.

SECTION 2. OTHER OFFICES. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.

ARTICLE II

STOCKHOLDERS

SECTION 1. ANNUAL MEETING. The annual meeting of the stockholders of
the Corporation shall be held on such date, and at such time and place within
or without the state of Delaware as may be designated by the Board of Directors
from time to time for the purpose of electing directors and for the transaction
of such other business as may come before the meeting. Any action required or
permitted to be taken by the holders of the Common Stock of the Corporation
must be effected at a duly called annual or special meeting of such holders.

At an annual meeting of stockholders, only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been
brought before the annual meeting (c) by, or at the direction of, the Chairman
of the Board of Directors, or (d) by any stockholder of this Corporation who
complies with the notice procedures set forth in this Article II and the
requirements of Rule 14a-8 under the Securities Exchange Act of 1934.

For a proposal to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing
to the Secretary of this Corporation. To be timely, a stockholder's notice
must be delivered to, or mailed and received at, the principal executive
offices of this Corporation not less than 70 nor more than 90 days prior to the
first anniversary of the scheduled annual meeting; provided, however, that in
the event that the date of the

1.
<PAGE> 6

annual meeting is advanced by more than 20 days, or delayed by more than 70
days, from such anniversary date, notice by the stockholder to be timely must
be so delivered not earlier than the ninetieth day prior to such annual meeting
and not later than the close of business on the later of the seventieth day
prior to such annual meeting or the tenth day following the day on which public
announcement of the date of such meeting is first made.

A stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting, in addition
to any other information as may be required by law, (a) a brief description of
the proposal desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (b) the name and address,
as they appear on this Corporation's books, of the stockholder proposing such
business and any other stockholders known by such stockholder to be supporting
such proposal, (c) the class and number of shares of this Corporation's stock
which are beneficially owned by the stockholder on the date of such stockholder
notice and by any other stockholders known by such stockholder to be supporting
such proposal on the date of such stockholder notice, and (d) any financial
interest of the stockholder in such proposal.

The presiding officer of the annual meeting shall determine and
declare at the annual meeting whether the stockholder proposal was made in
accordance with the terms of this Article II, Section 1. If the presiding
officer determines that a stockholder proposal was not made in accordance with
the terms of this Article II, Section 1, he or she shall so declare at the
annual meeting and any such proposal shall not be acted upon at the annual
meeting.

SECTION 2. SPECIAL MEETINGS. Except as otherwise required by law and
subject to the rights of the holders of any series of Preferred Stock then
outstanding, special meetings of the stockholders of this Corporation for any
purpose or purposes may be called at any time by (a) a vote of the majority of
the Board of Directors, (b) the Chairman of the Board of Directors, or (c) the
Chief Executive Officer of this Corporation. Special meetings of the
stockholders of this Corporation may not be called by any other person or
persons. At any special meeting of stockholders, only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been set
forth in the notice of such special meeting.

SECTION 3. PLACE OF MEETING. The Board of Directors may designate any
place, either within or without the State of Delaware, as the place of meeting
for any annual or special meeting of the stockholders. A waiver of notice
signed by all stockholders entitled to vote at a meeting may designate any
place, either within or without the State of Delaware, as the place for the
holding of such meeting. If no designation is made, or if a special meeting be
otherwise called, the place of meeting shall be the principal office of the
Corporation in the State of Florida.

2.
<PAGE> 7

SECTION 4. NOTICE OF MEETING. Except as otherwise provided by law,
written notice stating the place, day and hour of the meeting and, in the case
of a special meeting, the purpose or purposes for which it is called shall be
delivered not less than ten (10) nor more than sixty (60) days before the date
of the meeting, either personally, via United States mail, telegraph, teletype,
facsimile, or other electronic transmission, or by private mail carriers
handling nationwide mail services, by or at the direction of the President or
the Secretary, to each stockholder of record entitled to vote at such meeting.
If mailed, such notice shall be deemed to be delivered when deposited in the
United States mail, addressed to the stockholder at the stockholder's address
as it appears on the stock transfer books of the Corporation, with postage
thereon prepaid.

SECTION 5. WAIVER OF CALL AND NOTICE OF MEETING. Call and notice of
any stockholders' meeting may be waived by any stockholder; and, notice of such
meeting shall not be required as to any stockholder who shall attend such
meeting in person or by proxy, except where the stockholder attends a meeting
for the express purpose of objecting to the transaction of any business because
the meeting is not lawfully called or convened.

SECTION 6. QUORUM. Except as otherwise provided in these by-laws or
in the Restated Certificate of Incorporation, a majority of the outstanding
shares of the Corporation entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of the stockholders; and, except as
otherwise provided in the Restated Certificate of Incorporation, the vote, in
person or by proxy, of the holders of a majority of the shares constituting a
quorum shall be the act of the stockholders of the Corporation. If less than a
majority of the outstanding shares are represented at a regularly called
meeting of stockholders, a majority of the shares so represented may adjourn
the meeting from time to time without further notice. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed. If the adjournment is for more than 30 days, or if, after the
adjournment, a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.

SECTION 7. VOTING LISTS. At least ten (10) days prior to each meeting
of stockholders, the officer having charge of the stock transfer books for
shares of the Corporation shall make a complete list of the stockholders,
arranged in alphabetical order, entitled to vote at such meeting, or any
adjournment thereof, with the address and the number of shares held by each,
which list shall be subject to inspection by any stockholder, for any purpose
germane to the meeting, during normal business hours for at least ten (10) days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting, or if not
so specified, at the place where the meeting is to be held. The list also
shall be produced at the meeting and shall be subject to inspection by any
stockholder during the whole time of the meeting. The original stock transfer
book shall be prima facie evidence as to who are the stockholders entitled to
examine such list or the transfer books or to vote at any meeting of the
stockholders.

3.
<PAGE> 8

SECTION 8. VOTING OF SHARES. Each stockholder entitled to vote shall
be entitled at every meeting of the stockholders to one vote in person or by
proxy for each share of voting stock held by such stockholders. Such right to
vote shall be subject to the right of the Board of Directors to close the
transfer books or to fix a record date for voting stockholders as hereinafter
provided. Treasury shares, and shares of stock of this Corporation owned
directly or indirectly by another corporation the majority of the voting stock
of which is owned or controlled by this Corporation, shall not be voted at any
meeting and shall not be counted in determining the total number of outstanding
shares.

SECTION 9. PROXIES. At all meetings of stockholders, a stockholder
may vote by proxy, executed in writing by the stockholder or by the
stockholder's duly authorized attorney-in-fact; but, no proxy shall be valid
after three (3) years from its date, unless the proxy provides for a longer
period. Without limiting the manner in which a stockholder may authorize
another person or persons to act for the stockholder as proxy pursuant to the
General Corporation Law of the State of Delaware, the following shall
constitute a valid means by which a stockholder may grant such authority: (1) a
stockholder may execute a writing authorizing another person or persons to act
for the stockholder as proxy, and execution of the writing may be accomplished
by the stockholder or the stockholder's authorized officer, director, employee
or agent signing such writing or causing his or her signature to be affixed to
such writing by any reasonable means including, but not limited to, by
facsimile signature; or (2) a stockholder may authorize another person or
persons to act for the stockholder as proxy by transmitting or authorizing the
transmission of a telegram, cablegram, or other means of electronic
transmission to the person who will be the holder of the proxy or to a proxy
solicitation firm, proxy support service organization or like agent duly
authorized by the person who will be the holder of the proxy to receive such
transmission, provided that any such telegram, cablegram or other means of
electronic transmission must either set forth or be submitted with information
from which it can be determined that the telegram, cablegram or other
electronic transmission was authorized by the stockholder. If it is determined
that such telegrams, cablegrams or other electronic transmissions are valid,
the inspector or inspectors of stockholder votes or, if there are no such
inspectors, such other persons making that determination shall specify the
information upon which they relied.

Any copy, facsimile telecommunication or other reliable reproduction
of the writing or transmission created pursuant to the preceding paragraph of
this Section 9 may be substituted or used in lieu of the original writing or
transmission for any and all purposes for which the original writing or
transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the
entire original writing or transmission. Each proxy shall be filed with the
Secretary of the Corporation before or at the time of the meeting to which they
relate.

SECTION 10. INFORMAL ACTION BY STOCKHOLDERS. Unless otherwise
provided in the Certificate of Incorporation, any action required or permitted
to be taken at a meeting of the stockholders may be taken without a meeting,
without prior notice and without a vote if one or more

4.
<PAGE> 9

consents in writing, setting forth the action so taken, shall be signed by
stockholders holding shares representing not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. No written
consent shall be effective to take the corporate action referred to therein
unless, within sixty (60) days of the date of the earliest dated consent
delivered to the Secretary, written consent signed by the number of
stockholders required to take action is delivered to the Secretary. If
authorization of an action is obtained by one or more written consent but less
than all stockholders so consent, then after obtaining the authorization of
such action by written consents, prompt notice must be given to each
stockholder who did not consent in writing and who, if the action had been
taken at a meeting, would have been entitled to notice of the meeting if the
record date for such meeting had been the date that written consents signed by
a sufficient number of holders to take the action were delivered to the
Corporation as provided in this section.

SECTION 10. INSPECTORS. The Board of Directors or the President, in
advance of all meetings of the stockholders, shall appoint one or more
inspectors of stockholder votes, who may be stockholders or their proxies, but
not directors of the Corporation or candidates for office. In the event that
the Board of Directors fails to so appoint inspectors of stockholder votes or,
in the event that one or more inspectors of stockholder votes previously
designated by the Board of Directors fails to appear or act at the meeting of
stockholders, the Chairman of the meeting may appoint one or more inspectors of
stockholder votes to fill such vacancy or vacancies. Inspectors of stockholder
votes appointed to act at any meeting of the stockholders, before entering upon
the discharge of their duties, shall be sworn faithfully to execute the duties
of inspector of stockholder votes with strict impartiality and according to the
best of their ability and the oath so taken shall be subscribed by them.
Inspectors of stockholder votes shall, subject to the power of the Chairman of
the meeting to open and close the polls, take charge of the polls, and, after
the voting, shall make a certificate of the result of the vote taken.

ARTICLE III

BOARD OF DIRECTORS

SECTION 1. GENERAL POWERS. The business and affairs of the
Corporation shall be managed by its Board of Directors, which may exercise all
such powers of the Corporation and do all such lawful acts and things as are
not by law, the Restated Certificate of Incorporation or these by-laws directed
or required to be exercised or done only by the stockholders.

SECTION 2. NUMBER, CLASSIFICATION, TENURE AND QUALIFICATIONS. This
Corporation's Board of Directors shall consist of not less than three (3)
directors and not more than nine (9) directors, the exact number of directors
to be determined from time to time by resolution adopted by the affirmative
vote of a majority of the Board of Directors. A director shall hold office
until the next annual meeting of stockholders and until his or her successor
shall be elected and shall qualify, subject, however, to prior death,
resignation, retirement, disqualification or removal from

5.
<PAGE> 10

office. Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of Preferred Stock issued by this Corporation shall have the
right, voting separately by class or series, to elect directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of the Restated Certificate of Incorporation and these Bylaws (including
any certificate of designations relating to any series of Preferred Stock or
Series Common Stock) or resolutions adopted by the Board of Directors pursuant
to this Article III.

SECTION 3. ANNUAL MEETING. The Board of Directors shall hold an
annual meeting for the purpose of the election of officers and the transaction
of such other business as may come before the meeting. If no other date, place
and/or time is set by the Board for such meeting, the same shall be held at the
same place as and immediately following the annual meeting of stockholders;
and, if a majority of the directors are present at such place and time, no
prior notice of such meeting shall be required to be given to the directors
(except when the director attends a meeting for the express purpose of
objecting at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened), or who shall waive
notice thereof, before or after such meeting, in writing. The place and time
of such meeting may be varied by written consent of all the directors.

SECTION 4. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at such time as may from time to time be fixed by
resolution of the Board of Directors. Notice need not be given of regular
meetings of the Board of Directors at times fixed by resolution of the Board of
Directors.

SECTION 5. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be held at any time upon the call of the Chairman of the Board,
if there be one, the President or any two (2) directors, by oral or written
notice, including telegraph, telex or transmission of a telecopy, e-mail or
other means of transmission, duly served on or sent or mailed to each director
to such director's address or telecopy number as shown on the books of the
Corporation not less than one day before the meeting. The person or persons
authorized to call special meetings of the Board of Directors may fix the place
for holding any special meetings of the Board of Directors called by him or
them, as the case may be. If no such designation is made, the place of meeting
shall be the principal office of the Corporation in the State of Florida.

SECTION 6. NOTICE. Written notice stating the place, day and hour of
the meeting shall be delivered at least two (2) days prior thereto to each
director, either personally, or by mail, telegram or cablegram to the
director's business address. If notice is given by mail, such notice shall be
deemed to be delivered when deposited in the United States mail so addressed
with postage thereon prepaid. If notice is given by telegram or cablegram,
such notice shall be deemed to be delivered when the telegram or cablegram is
delivered to the issuing company. Any director may waive notice of any
meeting, either before, at or after such meeting. The attendance of a director
at a meeting shall constitute a waiver of notice of such meeting, except where
a director attends a meeting for the

6.
<PAGE> 11

express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.

SECTION 7. QUORUM. A quorum for the transaction of business at all
meetings of the Board of Directors shall be a majority of the number of
directors determined from time to time to comprise the Board of Directors, and
the act of a majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board.

SECTION 8. MANNER OF ACTING. The act of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.

SECTION 9. REMOVAL. Subject to the rights, if any, of the holders of
shares of Preferred Stock then outstanding, any or all of the directors of this
Corporation may be removed with or without cause from office at any annual or
special meeting of stockholders. Notice of any such annual or special meeting
of stockholders shall state that the removal of a director or directors is
among the purposes of the meeting and shall state the grounds therefor.
Directors may be removed by the stockholders with cause by the affirmative vote
of at least a majority of the voting power of all shares of the Corporation
entitled to vote generally in the election of directors voting as a single
class. Directors may be removed without cause only by the affirmative vote of
at least eighty percent (80%) of the voting power of all shares of the
Corporation entitled to vote generally in the election of directors voting as a
single class.

SECTION 10. VACANCIES. Any newly created directorship on the Board
of Directors that results from an increase in the number of directors and any
vacancy occurring in the Board of Directors resulting from death, resignation,
disqualification, removal or other cause, may only be filled by a majority of
the directors then in office, although less than a quorum, or by a sole
remaining director. Any director elected to fill a vacancy resulting from an
increase in the number of directors or otherwise shall hold office until the
next annual meeting of stockholders and until such director's successor shall
be elected and shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office. No decrease in the number
of directors constituting the Board of Directors shall shorten the term of any
incumbent director.

SECTION 11. COMPENSATION. By resolution of the Board of Directors,
the directors may be paid their expenses, if any, of attendance at each meeting
of the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as directors. No payment
shall preclude any director from serving the Corporation in any other capacity
and receiving compensation therefor.

SECTION 12. PRESUMPTION OF ASSENT. A director of the Corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless such director votes against such action or abstains from voting in
respect of such matter because of an asserted conflict of interest.

7.
<PAGE> 12
SECTION 13. INFORMAL ACTION BY BOARD. Any action required or
permitted to be taken by any provisions of law, the Restated Certificate of
Incorporation or these bylaws at any meeting of the Board of Directors or of
any committee thereof may be taken without a meeting if a written consent
thereto is signed by all members of the Board or of such committee, as the case
may be, and filed in the minutes of the proceedings of the Board or such
committee, as the case may be.

SECTION 14. MEETING BY TELEPHONE. Directors or the members of any
committee thereof shall be deemed present at a meeting of the Board of
Directors or of any such committee, as the case may be, if the meeting is
conducted using a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time.

SECTION 15. NOMINATIONS AND ELECTIONS. Subject to the rights, if
any, of the holders of shares of Preferred Stock then outstanding, only persons
who are nominated in accordance with the following procedures shall be eligible
for election as directors at meetings of stockholders.

Nominations of persons for election to the Board of Directors of this
Corporation may be made at a meeting of stockholders by or at the direction of:
(a) the Board of Directors; (b) by any nominating committee or person appointed
by the Board; (c) or by any stockholder of this Corporation entitled to vote
for the election of directors at the meeting who complies with the notice
procedures set forth in this Article III.

Nominations by stockholders shall be made pursuant to timely notice in
writing to the Secretary of this Corporation. To be timely, a stockholder's
notice of nominations of persons for election to the Board of Directors at an
annual meeting must be delivered to, or mailed and received at, the principal
executive offices of this Corporation not less than 70 nor more than 90 days
prior to the date of the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the annual
meeting is advanced by more than 20 days, or delayed by more than 70 days, from
such anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the ninetieth day prior to such annual meeting and
not later than the close of business on the later of the seventieth day prior
to such annual meeting or the tenth day following the day on which public
announcement of the date of such meeting is first made. To be timely , a
stockholder's notice of nominations of persons for election to the Board of
Directors at a special meeting shall be delivered to, or mailed and received
at, the principal executive offices of this Corporation not earlier than the
ninetieth day prior to such special meeting and not later than the close of
business on the later of the seventieth day prior to such special meeting or
the tenth day following the day on which public announcement of such meeting is
first made of the date of the special meeting and of the nominees proposed by
the Board of Directors to be elected at such meeting.

8.
<PAGE> 13

owned by the person and (iv) any other information relating to the person that
is required to be disclosed in solicitations for proxies for election of
directors pursuant to Schedule 14A under the Securities Exchange Act of 1934,
as amended; and (b) as to the stockholder giving the notice (i) the name and
address, as they appear on this Corporation's books, of the stockholder and
(ii) the class and number of shares of this Corporation's stock which are
beneficially owned by the stockholder on the date of such stockholder notice.
This Corporation may require any proposed nominee to furnish such other
information as may reasonably be required by this Corporation to determine the
eligibility of such proposed nominee to serve as a director of this
Corporation.

The presiding officer of the meeting shall determine and declare at
the meeting whether the nomination was made in accordance with the terms of
this Section 15, Article III. If the presiding officer determines that a
nomination was not made in accordance with the terms of this Article III, he or
she shall so declare at the meeting and any such defective nomination shall be
disregarded.

ARTICLE IV

OFFICERS

SECTION 1. OFFICERS. The officers of the Corporation shall consist of
a President, Chief Executive Officer, a Secretary and a Treasurer, each of whom
shall be appointed by the Board of Directors. The Board of Directors may also
appoint a Chairman of the Board, who may be an officer of this Corporation if
the Board so determines, one or more Vice Presidents, one or more Assistant
Secretaries and Assistant Treasurers, and such other officers as the Board of
Directors shall deem appropriate. The same individual may simultaneously hold
more than one office in this Corporation.

SECTION 2. ELECTION AND TERM OF OFFICE. The officers of this
Corporation shall be appointed annually by the Board of Directors at its annual
meeting. If the appointment of officers shall not be made at such meeting,
such appointment shall be made as soon thereafter as is convenient. Each
officer shall hold office until such officer's successor is duly appointed and
qualifies, unless such officer sooner dies, resigns or is removed by the Board.
The appointment of an officer does not itself create contract rights.

SECTION 3. RESIGNATION AND REMOVAL. An officer may resign at any time
by delivering notice to this Corporation. A resignation shall be effective
when the notice is delivered unless the notice specifies a later effective
date. An officer's resignation shall not affect this Corporation's contract
rights, if any, with the officer. The Board of Directors may remove an officer
at any time with or without cause. An officer's removal shall not affect the
officer's contract rights, if any, with this Corporation.

SECTION 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise may be filled by the Board
of Directors for the unexpired portion of the term.

9.
<PAGE> 14

SECTION 5. DUTIES OF OFFICERS. The Chairman of the Board of the
Corporation, or the President if there shall not be a Chairman of the Board,
shall preside at all meetings of the Board of Directors and of the
stockholders. The Chief Executive Officer shall be the chief executive officer
of the Corporation. The Secretary shall be responsible for preparing minutes
of the directors' and stockholders' meetings and for authenticating records of
this Corporation. Subject to the foregoing, the officers of the Corporation
shall have such powers and duties as ordinarily pertain to their respective
offices and such additional powers and duties specifically conferred by law,
the Restated Certificate of Incorporation and these by-laws, or as may be
assigned to them from time to time by the Board of Directors or an officer
authorized by the Board of Directors to prescribe the duties of other officers.

SECTION 6. SALARIES. The salaries of the officers shall be fixed from
time to time by the Board of Directors, by any duly appointed committee
thereof, or otherwise as approved by the Board, and no officer shall be
prevented from receiving a salary by reason of the fact that the officer is
also a director of the Corporation.

SECTION 7. DELEGATION OF DUTIES. In the absence or disability of any
officer of the Corporation, or for any other reason deemed sufficient by the
Board of Directors, the Board may delegate the powers or duties of such officer
to any other officer or to any other director for the time being.

SECTION 8. DISASTER EMERGENCY POWERS OF ACTING OFFICERS. If, as a
result of a nuclear disaster or a state of emergency, the President is unable
to perform the duties of the office of President and/or other officers are
unable to perform their duties, (a) the powers and duties of the President
shall be held and performed by that officer of the Corporation highest on the
list of successors (adopted by the Board of Directors for such purpose) who
shall be available and capable of holding and performing such powers and
duties; and, absent any such prior designation, by that Vice President who
shall be available and capable of holding and performing such powers and duties
whose surname commences with the earliest letter of the alphabet among all such
Vice Presidents; or, if no Vice President is available and capable of holding
and performing such powers and duties, then by the Secretary; or, if the
Secretary is likewise unavailable, by the Treasurer; (b) the officer so
selected to hold and perform such powers and duties shall serve as Acting
President until the President again becomes capable of holding and performing
the powers and duties of President, or until the Board of Directors shall have
elected a new President or designated another individual as Acting President;
(c) such officer (or the President, if such person is still serving) shall have
the power, in addition to all other powers granted to the President by law, the
Certificate of Incorporation, these by-laws and the Board of Directors, to
appoint acting officers to fill vacancies that may have occurred, either
permanently or temporarily, by reason of such disaster or emergency, each of
such acting appointees to serve in such capacity until the officer for whom the
acting appointee is acting is capable of performing the duties of such office,
or until the Board of Directors shall have designated another individual to
perform such duties or shall have elected or appointed another person to fill
such office; (d) each acting officer so appointed shall be entitled to exercise
all powers invested by law, the Restated Certificate of Incorporation, these
by-laws and the Board of Directors

10.
<PAGE> 15

in the office in which such person is serving; and (e) anyone transacting
business with the Corporation may rely upon a certificate signed by any two
officers of the Corporation that a specified individual has succeeded to the
powers and duties of the President or such other specified office. Any person,
firm, corporation or other entity to which such certificate has been delivered
by such officers may continue to rely upon it until notified of a change by
means of a writing signed by two officers of this Corporation.

ARTICLE V

EXECUTIVE AND OTHER COMMITTEES

SECTION 1. CREATION OF COMMITTEES. The Board of Directors may
designate an Executive Committee and one or more other committees, each to
consist of two (2) or more of the directors of the Corporation.

SECTION 2. EXECUTIVE COMMITTEE. The Executive Committee, if there
shall be one, shall consult with and advise the officers of this Corporation in
the management of its business, and shall have, and may exercise, except to the
extent otherwise provided in the resolution of the Board of Directors creating
such Executive Committee, such powers of the Board of Directors as can be
lawfully delegated by the Board.

SECTION 3. OTHER COMMITTEES. Such other committees, to the extent
provided in the resolution or resolutions creating them, shall have such
functions and may exercise such powers of the Board of Directors as can be
lawfully delegated.

SECTION 4. REMOVAL OR DISSOLUTION. Any committee of the Board of
Directors may be dissolved by the Board at any meeting; and, any member of such
committee may be removed by the Board of Directors whenever, in its judgment,
the best interests of the Corporation will be served thereby, but, such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.

SECTION 5. VACANCIES ON COMMITTEES. Vacancies on any committee of the
Board of Directors shall be filled by the Board of Directors at any regular or
special meeting.

SECTION 6. MEETINGS OF COMMITTEES. Regular meetings of any committee
of the Board of Directors may be held without notice at such time and at such
place as shall from time to time be determined by such committee and special
meetings of any such committee may be called by any member thereof upon two (2)
days notice to each of the other members of such committee, or on such shorter
notice as may be agreed to in writing by each of the other members of such
committee, given either personally or in the manner provided in Section 6 of
Article III of these by-laws (pertaining to notice for directors' meetings).

11.
<PAGE> 16

SECTION 7. ABSENCE OF COMMITTEE MEMBERS. The Board of Directors may
designate one or more directors as alternate members of any committee of the
Board of Directors, who may replace at any meeting of such committee, any
member not able to attend.

SECTION 8. QUORUM OF COMMITTEES. At all meetings of committees of the
Board of Directors, a majority of the committee's members then in office shall
constitute a quorum for the transaction of business.

SECTION 9. MANNER OF ACTING OF COMMITTEES. The acts of a majority of
the members of any committee of the Board of Directors present at any meeting
at which there is a quorum shall be the act of such committee.

SECTION 10. MINUTES OF COMMITTEES. Each committee of the Board of
Directors shall keep regular minutes of its proceedings and report the same to
the Board of Directors when required.

SECTION 11. COMPENSATION. Members of any committee of the Board of
Directors may be paid compensation in accordance with the provisions of Section
11 of Article III of these by-laws (pertaining to compensation of directors).

SECTION 12. INFORMAL ACTION. Any committee of the Board of Directors
may take such informal action and hold such informal meetings as allowed by the
provisions of Sections 13 and 14 of Article III of these by-laws.

ARTICLE VI

INDEMNIFICATION OF DIRECTORS AND OFFICERS

SECTION 1. GENERAL. To the fullest extent permitted by law, the
Corporation shall be entitled but not obligated to indemnify any person who is
or was a party, or is threatened to be made a party, to any threatened, pending
or completed action, suit or other type of proceeding (other than an action by
or in the right of the Corporation), whether civil, criminal, administrative,
investigative or otherwise, and whether formal or informal, by reason of the
fact that such person is or was a director or officer of the Corporation or is
or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against judgments, amounts paid in settlement, penalties,
fines (including an excise tax assessed with respect to any employee benefit
plan) and expenses (including attorneys' fees, paralegals' fees and court
costs) actually and reasonably incurred in connection with any such action,
suit or other proceeding, including any appeal thereof, if such person acted in
good faith and in a manner such person reasonably believed to be in, or not
opposed to, the best interests of the Corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful. The termination of any such action, suit or other

12.
<PAGE> 17

proceeding by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner that such person
reasonably believed to be in, or not opposed to, the best interests of the
Corporation or, with respect to any criminal action or proceeding, had
reasonable cause to believe that such person's conduct was unlawful.

SECTION 2. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. To the
fullest extent permitted by law, the Corporation shall be entitled but not
obligated to indemnify any person who is or was a party, or is threatened to be
made a party, to any threatened, pending or completed action, suit or other
type of proceeding (as further described in Section 1 of this Article VI) by or
in the right of the Corporation to procure a judgment in its favor by reason of
the fact that such person is or was a director or officer of the Corporation or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees, paralegals'
fees and court costs) and amounts paid in settlement not exceeding, in the
judgment of the Board of Directors, the estimated expenses of litigating the
action, suit or other proceeding to conclusion, actually and reasonably
incurred in connection with the defense or settlement of such action, suit or
other proceeding, including any appeal thereof, if such person acted in good
faith and in a manner such person reasonably believed to be in, or not opposed
to, the best interests of the Corporation, except that no indemnification shall
be made under this Section 2 in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable unless, and only to the
extent that, the court in which such action, suit or other proceeding was
brought, or any other court of competent jurisdiction, shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnification for such expenses that such court shall deem proper.

SECTION 3. OBLIGATION TO INDEMNIFY. To the extent that a director or
officer has been successful on the merits or otherwise in defense of any
action, suit or other proceeding referred to in Section 1 or Section 2 of this
Article VI, or in the defense of any claim, issue or matter therein, such
person shall, upon application, be indemnified against expenses (including
attorneys' fees, paralegals' fees and court costs) actually and reasonably
incurred by such person in connection therewith.

SECTION 4. DETERMINATION THAT INDEMNIFICATION IS PROPER.
Indemnification pursuant to Section 1 or Section 2 of this Article VI, unless
made under the provisions of Section 3 of this Article VI or unless otherwise
made pursuant to a determination by a court, shall be made by the Corporation
only as authorized in the specific case upon a determination that the
indemnification is proper in the circumstances because the indemnified person
has met the applicable standard of conduct set forth in Section 1 or Section 2
of this Article VI. Such determination shall be made either (1) by the Board
of Directors by a majority vote of directors who were not parties to the
action, suit or other proceeding to which the indemnification relates, even
though less than a quorum; (2) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion; or (3)
by the stockholders.

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<PAGE> 18

SECTION 5. EVALUATION AND AUTHORIZATION. Evaluation of the
reasonableness of expenses and authorization of indemnification shall be made
in the same manner as is prescribed in Section 4 of this Article VI for the
determination that indemnification is permissible; provided, however, that if
the determination as to whether indemnification is permissible is made by
independent legal counsel, the persons who selected such independent legal
counsel shall be responsible for evaluating the reasonableness of expenses and
may authorize indemnification.

SECTION 6. PREPAYMENT OF EXPENSES. Expenses (including attorneys'
fees, paralegals' fees and court costs) incurred by a director or officer in
defending any civil, criminal, administrative or investigative action, suit or
other proceeding referred to in Section 1 or Section 2 of this Article VI may,
in the discretion of the Board of Directors, be paid by the Corporation in
advance of the final disposition thereof upon receipt of an undertaking by or
on behalf of such director or officer to repay such amount if such person is
ultimately found not to be entitled to indemnification by the Corporation
pursuant to this Article VI.

SECTION 7. NONEXCLUSIVITY AND LIMITATIONS. The indemnification and
advancement of expenses provided pursuant to this Article VI shall not be
deemed exclusive of any other rights to which a person may be entitled under
any law, bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise, both as to action in such person's official capacity and as to
action in any other capacity while holding office with the Corporation, and
shall continue as to any person who has ceased to be a director or officer and
shall inure to the benefit of such person's heirs and personal representatives.
The Board of Directors may, at any time, approve indemnification of or
advancement of expenses to any other person that the Corporation has the power
by law to indemnify, including, without limitation, employees and agents of the
Corporation. In all cases not specifically provided for in this Article VI,
indemnification or advancement of expenses shall not be made to the extent that
such indemnification or advancement of expenses is expressly prohibited by law.

SECTION 8. CONTINUATION OF INDEMNIFICATION RIGHT; DEFINITIONS. Unless
expressly otherwise provided when authorized or ratified by this Corporation,
indemnification and advancement of expenses as provided for in this Article VI
shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person. For purposes of this Article VI, the term
"Corporation" includes, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed
in a consolidation or merger, so that any person who is or was a director or
officer of a constituent corporation, or is or was serving at the request of a
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, is in the
same position under this Article VI with respect to the resulting or surviving
corporation as such person would have been with respect to such constituent
corporation if its separate existence had continued.

SECTION 9. INSURANCE. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Corporation, or who is or

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<PAGE> 19

was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against such person and incurred by
such person in any such capacity or arising out of such person's status as
such, whether or not the Corporation would have the power to indemnify such
person against the liability under Section 1 or Section 2 of this Article VI.

ARTICLE VII

INTERESTED PARTIES

SECTION 1. GENERAL. No contract or other transaction between the
Corporation and any one or more of its directors or any other corporation,
firm, association or entity in which one or more of its directors are directors
or officers or are financially interested shall be either void or voidable
because of such relationship or interest, because such director or directors
were present at the meeting of the Board of Directors or of a committee thereof
which authorizes, approves or ratifies such contract or transaction or because
such director's or directors' votes are counted for such purpose if: (a) the
fact of such relationship or interest is disclosed or known to the Board of
Directors or committee which authorizes, approves or ratifies the contract or
transaction by a vote or consent sufficient for the purpose without counting
the votes or consents of such interested directors; (b) the fact of such
relationship or interest is disclosed or known to the stockholders entitled to
vote on the matter, and they authorize, approve or ratify such contract or
transaction by vote or written consent; or (c) the contract or transaction is
fair and reasonable as to the Corporation at the time it is authorized by the
Board of Directors, a committee thereof or the stockholders.

SECTION 2. DETERMINATION OF QUORUM. Common or interested directors
may be counted in determining the presence of a quorum at a meeting of the
Board of Directors or a committee thereof which authorizes, approves or
ratifies a contract or transaction referred to in Section 1 of this Article
VII.

SECTION 3. APPROVAL BY STOCKHOLDERS. For purposes of Section 1(b) of
this Article VII, a conflict of interest transaction shall be authorized,
approved or ratified if it receives the vote of a majority of the shares
entitled to be counted under this Section 3. Shares owned by or voted under
the control of a director who has a relationship or interest in the transaction
described in Section 1 of this Article VII may not be counted in a vote of
stockholders to determine whether to authorize, approve or ratify a conflict of
interest transaction under Section 1(b) of this Article VII. The vote of the
shares owned by or voted under the control of a director who has a relationship
or interest in the transaction described in Section 1 of this Article VII,
shall be counted, however, in determining whether the transaction is approved
under other sections of this Corporations Bylaws and law. A majority of those
shares that would be entitled, if present, to be counted in a vote on the
transaction under this Section 3 shall constitute a quorum for the purposes of
taking action under this Section 3.

15.
<PAGE> 20

ARTICLE VIII

CERTIFICATES OF STOCK

SECTION 1. CERTIFICATES FOR SHARES. The shares of stock of the
Corporation shall be represented by certificates, provided that the Board of
Directors may provide by resolution or resolutions that some or all of any or
all classes or series of the Corporation's stock shall be uncertificated
shares. Any such resolution shall not apply to shares represented by a
certificate until such certificate is surrendered to the Corporation.
Notwithstanding the adoption of such a resolution by the Board of Directors,
every holder of stock represented by certificates and upon request every holder
of uncertificated shares shall be entitled to have a certificate signed by, or
in the name of the Corporation by the Chairman of the Board of Directors, or
the President or a Vice President, and by the Treasurer or the Secretary of the
Corporation, or as otherwise permitted by law, representing the number of
shares registered in certificate form. Any or all the signatures on the
certificate may be a facsimile.

SECTION 2. TRANSFER AGENTS AND REGISTRARS. The Board of Directors
may, in its discretion, appoint responsible banks or trust companies in such
city or cities as the Board may deem advisable from time to time to act as
transfer agents and registrars of the stock of the Corporation; and, when such
appointments shall have been made, no stock certificate shall be valid until
countersigned by one of such transfer agents and registered by one of such
registrars.

SECTION 3. TRANSFER OF SHARES. Transfers of shares of the Corporation
shall be made on the books of the Corporation by the holder of the shares in
person or by the holder's lawfully constituted representative, upon surrender
of the certificate of stock for cancellation. The person in whose name shares
stand on the books of this Corporation shall be deemed by this Corporation to
be the owner thereof for all purposes and this Corporation shall not be bound
to recognize any equitable or other claim to or interest in such share on the
part of any other person, whether or not it shall have express or other notice
thereof, save as expressly provided by the laws of the State of Delaware.

SECTION 4. LOST CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation and alleged to have been
lost or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost or destroyed. When authorizing
such issue of a new certificate or certificates, the Board of Directors may, in
its discretion and as a condition precedent to the issuance thereof, require
the owner of such lost or destroyed certificate or certificates, or the owner's
legal representative, to give the Corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost or destroyed.

16.
<PAGE> 21

SECTION 5. SIGNATURES OF PAST OFFICERS. If the person who signed
(either manually or in facsimile) a share certificate no longer holds office
when the certificate is issued, the certificate shall nevertheless be valid.

ARTICLE IX

RECORD DATE

In order that the Corporation may determine the stockholders (a)
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or (b) entitled to consent to corporate action in writing
without a meeting, or (c) entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of
any other lawful action, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date (i) in the case of clause (a)
above, shall not be more than sixty nor less than ten days before the date of
such meeting, (ii) in the case of clause (b) above, shall not be more than ten
days after the date upon which the resolution fixing the record date is adopted
by the Board of Directors, and (iii) in the case of clause (c) above, shall not
be more than sixty days prior to such action. If for any reason the Board of
Directors shall not have fixed a record date for any such purpose, the record
date for such purpose shall be determined as provided by law. Only those
stockholders of record on the date so fixed or determined shall be entitled to
any of the foregoing rights, notwithstanding the transfer of any such stock on
the books of the Corporation after any such record date so fixed or determined.

ARTICLE X

DIVIDENDS

1.
The Board of Directors may from time to time declare, and the
Corporation may pay, dividends on its outstanding shares of capital stock in
the manner and upon the terms and conditions provided in the Restated
Certificate of Incorporation and by law. Subject to the provisions of the
Certificate of Incorporation and to law, dividends may be paid in cash or
property, including shares of stock or other securities of the Corporation.

ARTICLE XI

FISCAL YEAR

The fiscal year of the Corporation shall be the period selected by the
Board of Directors as the fiscal year.

17.
<PAGE> 22

ARTICLE XII

SEAL

The corporate seal shall have the name of the Corporation, the word
"SEAL" and the year of the incorporation inscribed thereon. In lieu of the
corporate seal, when so authorized by the Board of Directors or a duly
empowered committee thereof, a facsimile thereof maybe impressed or affixed or
reproduced.

ARTICLE XIII

STOCK IN OTHER CORPORATIONS

Shares of stock in other corporations held by the Corporation shall be
voted by the President or such officer or officers of the Corporation as the
Board of Directors shall from time to time designate for the purpose or by a
proxy thereunto duly authorized by said Board.

ARTICLE XIV

EMERGENCY BYLAWS

SECTION 1. SCOPE OF EMERGENCY BYLAWS. The emergency Bylaws
provided in this Article XV shall be operative during any emergency,
notwithstanding any different provision set forth in the preceding Articles
hereof; provided, however, that to the extent not inconsistent with the
provisions of this Article XV and the emergency Bylaws, the Bylaws provided in
the preceding Articles shall remain in effect during such emergency. For
purposes of the emergency Bylaw provisions of this Article XV, an emergency
shall exist if a quorum of this Corporation's directors cannot readily be
assembled because of some catastrophic event. Upon termination of the
emergency, these emergency Bylaws shall cease to be operative.

SECTION 2. CALL AND NOTICE OF MEETING. During any emergency, a
meeting of the Board of Directors may be called by any officer or director of
this Corporation. Notice of the date, time and place of the meeting shall be
given by the person calling the meeting to such of the directors as it may be
feasible to reach by any available means of communication. Such notice shall
be given at such time in advance of the meeting as circumstances permit in the
judgment of the person calling the meeting.

SECTION 3. QUORUM AND VOTING. At any such meeting of the Board
of Directors, a quorum shall consist of any one or more directors, and the act
of the majority of the directors present at such meeting shall be the act of
this Corporation.

18.
<PAGE> 23

SECTION 4. APPOINTMENT OF TEMPORARY DIRECTORS.

(a) The director or directors who are able to be
assembled at a meeting of directors during an emergency may assemble for the
purpose of appointing, if such directors deem it necessary, one or more
temporary directors (the "Temporary Directors") to serve as directors of this
Corporation during the term of any emergency.

(b) If no directors are able to attend a meeting of
directors during an emergency, then such stockholders as may reasonably be
assembled shall have the right, by majority vote of those assembled, to appoint
Temporary Directors to serve on the Board of Directors until the termination of
the emergency.

(c) If no stockholders can reasonably be assembled in
order to conduct a vote for Temporary Directors, then the President or his or
her successor, as determined pursuant to Section 9 of Article IV herein, shall
be deemed a Temporary Director of this Corporation, and such President or his
or her successor, as the case may be, shall have the right to appoint
additional Temporary Directors to serve with him or her on the Board of
Directors of this Corporation during the term of the emergency.

(d) Temporary Directors shall have all of the rights,
duties and obligations of directors appointed pursuant to Article III hereof,
provided, however, that a Temporary Director may be removed from the Board of
Directors at any time by the person or persons responsible for appointing such
Temporary Director, or by vote of the majority of the stockholders present at
any meeting of the stockholders during an emergency, and, in any event, the
Temporary Director shall automatically be deemed to have resigned from the
Board of Directors upon the termination of the emergency in connection with
which the Temporary Director was appointed.

SECTION 5. MODIFICATION OF LINES OF SUCCESSION. Either before
or during any emergency, the Board of Directors may provide, and from time to
time modify, lines of succession different from that provided in Section 9 of
Article IV in the event that during such an emergency any or all officers or
agents of this Corporation shall for any reason be rendered incapable of
discharging their duties.

SECTION 6. CHANGE OF PRINCIPAL OFFICE. The Board of Directors
may, either before or during any such emergency, and effective during such
emergency, change the principal office of this Corporation or designate several
alternative head offices or regional offices, or authorize the officers of this
Corporation to do so.

SECTION 7. LIMITATION OF LIABILITY. No officer, director or
employee acting in accordance with these emergency Bylaws during an emergency
shall be liable except for willful misconduct.

19.
<PAGE> 24

SECTION 8. AMENDMENT OR REPEAL. These emergency Bylaws shall be
subject to amendment or repeal by further action of the Board of Directors or
by action of the stockholders, but no such amendment or repeal shall affect the
validity of any action taken prior to the time of such amendment or repeal. Any
amendment of these emergency Bylaws may make any further or different provision
that may be practical or necessary under the circumstances of the emergency.

ARTICLE XV

AMENDMENTS

The Board of Directors shall be authorized to make, amend, alter,
change, add to or repeal the Bylaws of the Corporation in any manner not
inconsistent with the laws of the State of Delaware, subject to the power of
the stockholders to amend, alter, change, add to or repeal the Bylaws made by
the Board of Directors. Notwithstanding anything contained in these Bylaws to
the contrary, the affirmative vote of the holders of at least eighty percent
(80%) in voting power of all the shares of the Corporation entitled to vote
generally in the election of directors, voting together as a single class,
shall be required in order for the stockholders to alter, amend or repeal any
provision of the Bylaws which is to the same effect as Article Fifth, Article
Sixth, and Article Eighth of the Restated Certificate of Incorporation of this
Corporation or to adopt any provision inconsistent therewith.

ARTICLE XVI

PRECEDENCE OF LAW AND ARTICLES OF INCORPORATION

Any provision of the Certificate of Incorporation of this Corporation
shall, subject to law, control and take precedence over any provision of these
Bylaws inconsistent therewith.

20.

<PAGE> 1
EXHIBIT 4

NUMBER [JLM INDUSTRIES, INC. LOGO] SHARES
JLM

INCORPORATED UNDER THE LAWS SEE REVERSE SIDE FOR
OF THE STATE OF DELAWARE CERTAIN DEFINITIONS

THIS CERTIFIES THAT CUSIP 46621D 10 3

is the owner of

FULLY-PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, PAR VALUE .01 PER SHARE OF

JLM INDUSTRIES, INC.

(herein called the "Corporation" transferable on the books of the Corporation by
the holder hereof in person or by duly authorized attorney upon surrender of
this Certificate properly endorsed.

This Certificate is not valid unless countersigned by the Transfer Agent
Witness the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.

Dated:

/s/ /s/
Secretary President & CEO
<PAGE> 2
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not
as tenants in common

UNIF GIFT MIN ACT -- ______________ Custodian ______________
(Cust) (Minor)

under Uniform Gifts to Minors Act

_________________________________
(State)

Additional abbreviations may also be used though not in the above list.

For value received, ___________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------

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

________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

________________________________________________________________________________

_________________________________________________________________________ shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

_______________________________________________________________________ Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.

Dated _________________________

______________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE
IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATEVER.

SIGNATURE(S) GUARANTEED:

____________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

<PAGE> 1
EXHIBIT 5

[TRENAM, KEMKER, SCHARF, BARKIN, FRYE, O'NEILL & MULLIS LETTERHEAD]

July 3, 1997

Securities and Exchange Commission
450 5th Street, N.W.
Judiciary Plaza
Washington, DC 20549

Re: JLM Industries, Inc.
Registration Statement on Form S-1
File No. 333-27843

Ladies and Gentlemen:

We have represented JLM Industries, Inc. (the "Company") in connection
with the Company's Registration Statement on Form S-1 (File No. 333-27843), as
amended (the "Registration Statement") relating to the proposed public offering
(the "Offering") by the Company of up to 2,501,000 shares of the Company's
Common Stock (the "Company Shares") and by John L. Macdonald of 144,000 shares
of the Company's Common Stock (the "Selling Stockholder's Shares"). This opinion
is being provided as Exhibit 5 to the Registration Statement.

In our capacity as counsel to the Company in connection with the
Registration Statement and the Offering, we have examined and are familiar with:
(1) the Company's Restated Certificate of Incorporation and Bylaws as currently
in effect, (2) the Registration Statement and (3) such other corporate records
and documents and instruments as in our opinion are necessary or relevant as the
basis for the opinions expressed below.

As to various questions of fact material to our opinion, we have relied
without independent investigation on statements or certificates of officials and
representatives of the Company, the Department of State of the State of Delaware
and others. In all such examinations, we have assumed the genuineness of all
signatures on original and certified documents and the conformity to original
and certified documents of all copies submitted to us as conformed, photostatic
or other exact copies.

We express no opinion as to the law of any jurisdiction other than of
the General Corporation Law of Delaware and the Federal laws of the United
States of America.

Based upon and in reliance on the foregoing, we are of the opinion
that:

<PAGE> 2

SECURITIES AND EXCHANGE COMMISSION JULY 3, 1997
PAGE 2
- --------------------------------------------------------------------------------

1. The Company is a duly organized and existing corporation
under the laws of the State of Delaware and its status is active.

2. When the following events shall have occurred:

a. the Registration Statement shall have become
effective in accordance with the Securities Act of
1933, as amended;

b. the shares of Common Stock shall have been offered
and sold as provided in the Registration Statement
and the consideration specified in the Registration
Statement shall have been received; and

c. the certificates representing the Company Shares
shall have been duly executed, counter-signed and
issued by or on behalf of the Company,

the Company Shares when so offered and sold in the Offering will be duly
authorized, validly issued, fully paid and non-assessable shares of the capital
stock of the Company and the Selling Stockholder's Shares when so offered and
sold in the Offering will continue to be duly authorized, validly issued and
fully paid and nonassessable shares of the capital stock of the Company.

This firm hereby consents to the filing of this opinion as an Exhibit
to the Registration Statement and to the reference to it under the heading
"Legal Matters."

Sincerely,

TRENAM, KEMKER, SCHARF, BARKIN,
FRYE, O'NEILL & MULLIS,
Professional Association

By: /s/ Richard M. Leisner
---------------------------------
Richard M. Leisner

<PAGE> 1

EXHIBIT 10.19

AMENDED AND RESTATED CREDIT AGREEMENT

dated as of June 15, 1994

among

JLM INDUSTRIES, INC.

JLM MARKETING, INC.

JLM TERMINALS, INC.

JLM INTERNATIONAL, INC.

OLEFINS MARKETING, INC.

JOHN L. MACDONALD

and

STATE STREET BANK AND TRUST COMPANY

<PAGE> 2

Table of Contents

ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS ................................. 2
Section 1.01 Definitions ......................................... 2
Section 1.02 Accounting Terms .................................... 10

ARTICLE 2. THE LOANS ..................................................... 11
Section 2.01 The Loans ........................................... 11
Section 2.02 The Notes ........................................... 11
Section 2.03 Purposes ............................................ 12
Section 2.04 Borrowing Procedures ................................ 12
Section 2.05 Prepayments ......................................... 12
Section 2.06 Changes of Commitments .............................. 12
Section 2.07 Certain Notices ..................................... 12
Section 2.08 Minimum Amounts ..................................... 13
Section 2.09 Interest ............................................ 13
Section 2.10 Fees ................................................ 13
Section 2.11 Payments Generally .................................. 14

ARTICLE 3. THE LETTERS OF CREDIT ......................................... 14
Section 3.01 Letters of Credit ................................... 14
Section 3.02 Purposes ............................................ 14
Section 3.03 Procedures for Issuance of Letters of Letters
of Credit ........................................... 14
Section 3.04 Payments ............................................ 15
Section 3.05 Further Assurances .................................. 15
Section 3.06 Obligations Absolute ................................ 15
Section 3.07 Cash Collateral Account ............................. 16
Section 3.08 Letter of Credit Fees ............................... 16

ARTICLE 4. CONDITIONS OF PRECEDENT ....................................... 17
Section 4.01 Documentary Conditions Precedent .................... 17
Section 4.02 Additional Conditions Precedent ..................... 18
Section 4.03 Deemed Representations .............................. 19

ARTICLE 5. REPRESENTATIONS AND WARRANTIES ................................ 19
Section 5.01 Incorporation, Good Standing and Due
Qualification ....................................... 19
Section 5.02 Corporate Power and Authority; No
Conflicts ........................................... 19
Section 5.03 Legally Enforceable Agreements ...................... 20
Section 5.04 Litigation .......................................... 20
Section 5.05 Financial Statements ................................ 20
Section 5.06 Ownership and Liens ................................. 20
Section 5.07 Taxes ............................................... 21
Section 5.08 ERISA ............................................... 21
Section 5.09 Subsidiaries and Ownership of Stock ................. 21
Section 5.10 Credit Arrangements ................................. 21
Section 5.11 Operation of Business ............................... 22
Section 5.12 Hazardous Materials ................................. 22
Section 5.13 No Default on Outstanding Judgements or
Orders .............................................. 22
Section 5.14 No Defaults on Other Agreements ..................... 22

<PAGE> 3

Section 5.15 Labor Disputes and Acts of God ...................... 22
Section 5.16 Governmental Regulation ............................. 23
Section 5.17 No Forfeiture ....................................... 23
Section 5.18 Solvency ............................................ 23
Section 5.19 Security Documents .................................. 24

ARTICLE 6. AFFIRMATIVE COVENANTS ......................................... 24
Section 6.01 Maintenance of Existance ............................ 24
Section 6.02 Conduct of Business ................................. 24
Section 6.03 Maintenance of Properties ........................... 24
Section 6.04 Maintenance of Records .............................. 24
Section 6.05 Maintenance of Insurance ............................ 24
Section 6.06 Compliance with Laws ................................ 24
Section 6.07 Right of Inspection ................................. 25
Section 6.08 Reporting Requirements .............................. 25
Section 6.09 Additional Subsidiary Guarantors .................... 28

ARTICLE 7. NEGATIVE COVENANTS ............................................ 28
Section 7.01 Debt ................................................ 28
Section 7.02 Guaranties, Etc ..................................... 29
Section 7.03 Liens ............................................... 29
Section 7.04 Leases .............................................. 30
Section 7.05 Investments ......................................... 31
Section 7.06 Dividends ........................................... 31
Section 7.07 Sale of Property .................................... 32
Section 7.08 Stock of Subsidiaries, Etc .......................... 32
Section 7.09 Transaction with Affiliates ......................... 32
Section 7.10 Mergers, Etc ........................................ 32
Section 7.11 Acquisitions ........................................ 33
Section 7.12 No Activities Leading to Forfeiture ................. 33
Section 7.13 Restrictions ........................................ 33

ARTICLE 8. FINANCIAL COVENANTS ........................................... 33
Section 8.01 Net Income .......................................... 33
Section 8.02 Minimum Tangible Net Worth .......................... 34
Section 8.03 Leverage Ratio ...................................... 34
Section 8.04 Cash Flow Ratio ..................................... 34

ARTICLE 9. EVENTS OF DEFAULT ............................................. 34
Section 9.01 Events of Default ................................... 34
Section 9.02 Remedies ............................................ 36

ARTICLE 10. GUARANTY OF JLM DOMESTIC ENTITIES ............................ 37
Section 10.01 Guarantied Obligations ............................. 37
Section 10.02 Performance under this Agreement ................... 37
Section 10.03 Waivers ............................................ 37
Section 10.04 Releases ........................................... 39
Section 10.05 Marshaling ......................................... 40
Section 10.06 Liability .......................................... 40
Section 10.07 Primary Obligation ................................. 40
Section 10.08 Election to Perform Obligations .................... 40
Section 10.09 No Election ........................................ 41
Section 10.10 Severability ....................................... 41
Section 10.11 Other Enforcement Rights ........................... 41

<PAGE> 4

Section 10.12 Delay or Omission; No Waiver ....................... 41
Section 10.13 Restoration of Rights and Remedies ................. 42
Section 10.14 Cumulative Remedies ................................ 42
Section 10.15 Survival ........................................... 42

ARTICLE 11. GUARANTY OF MACDONALD ........................................ 42
Section 11.01 Guarantied Obligations ............................. 42
Section 11.02 Performance Under This Agreement ................... 43
Section 11.03 LIMITED GUARANTY ................................... 43
Section 11.04 Waivers ............................................ 43
Section 11.05 Releases ........................................... 44
Section 11.06 Marshaling ......................................... 45
Section 11.07 Liability .......................................... 45
Section 11.08 Primary Obligation ................................. 46
Section 11.09 Election to Perform Obligations .................... 46
Section 11.10 No Election ........................................ 46
Section 11.11 Severability ....................................... 46
Section 11.12 Other Enforcement Rights ........................... 46
Section 11.13 Delay or Omission; No Waiver ....................... 47
Section 11.14 Restoration of Rights and Remedies ................. 47
Section 11.15 Cumulative Remedies ................................ 47
Section 11.16 Survival ........................................... 47

ARTICLE 12. MISCELLANEOUS ................................................ 48
Section 12.01 Amendments and Waivers ............................. 48
Section 12.02 Usury .............................................. 48
Section 12.03 Expenses ........................................... 48
Section 12.04 Survival ........................................... 48
Section 12.05 Assignment; Participations ......................... 48
Section 12.06 Notices ............................................ 49
Section 12.07 Setoff ............................................. 50
Section 12.08 JURISDICTION; IMMUNITIES ........................... 50
Section 12.09 Table of Contents; Headings ........................ 51
Section 12.10 Severability ....................................... 51
Section 12.11 Counterparts ....................................... 51
Section 12.12 Integration ........................................ 51
Section 12.13 GOVERNING LAW ...................................... 51
Section 12.14 Confidentiality .................................... 51
Section 12.15 Treatment of Certain Information ................... 52

<PAGE> 5

EXHIBITS

Exhibit A1 Revolving Credit Note
Exhibit A2 Florida Term Note
Exhibit A3 North Carolina Term Note
Exhibit B1 Borrowing Base Certificate
Exhibit B2 Compliance Certificate
Exhibit C1 Opinion of Counsel to the Obligors
Exhibit C2 Opinion of Canadian Counsel
Exhibit D Amended and Restated Security Agreement
Exhibit E Canadian Guarantee
Exhibit F Canadian Security Agreement

SCHEDULES

Schedule I Subsidiaries
Schedule II Credit Arrangements
Schedule III Liens

<PAGE> 6

AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 15, 1994 among
JLM INDUSTRIES, Inc., a corporation organized under the laws of Delaware ("JLM
Industries"), JLM MARKETING, INC., a corporation organized under the laws of
Delaware ("JLM Marketing"), JLM TERMINALS, INC., a corporation organized under
the laws of North Carolina ("JLM Terminals"), JLM INTERNATIONAL, INC., a
corporation organized under the laws of Delaware ("JLM International") and
OLEFINS MARKETING, INC., a corporation organized under the laws of Delaware
("Olefins Marketing" and collectively, together with JLM Industries, JLM
Marketing, JLM Terminals and JLM International, the "JLM Domestic Entities");
JOHN L. MACDONALD, an individual residing at 921 Anchorage Rd., Tampa, Fl 33602
("MacDonald); and STATE STREET BANK AND TRUST COMPANY, a Massachusetts bank and
trust company (the "Bank").

WHEREAS, JLM Marketing and the Bank have entered into that certain
Revolving Line of Credit Agreement dated as of July 13, 1992 pursuant to which
the Bank has extended credit to JLM Marketing evidenced by that certain
Promissory Note issued by JLM Marketing and guarantied by JLM Industries, JLM
International and Olefins Marketing;

WHEREAS, JLM Industries and the Bank have entered into that certain
Construction Loan Agreement dated as of December 2, 1992 pursuant to which the
Bank has extended credit to JLM Industries and JLM Marketing evidenced by that
certain Promissory Note issued by JLM Industries and JLM Marketing and
guarantied by JLM Marketing, JLM International, and Olefins Marketing;

WHEREAS, the Bank has agreed to extend additional credit to JLM
Terminals to be secured by a bulk liquid chemical storage terminal in Cape
Fear, North Carolina;

WHEREAS, the JLM Domestic Entities, MacDonald and the Bank have agreed
to enter this Agreement to provide for, among other things, (a) the issuance of
the Revolving Credit Note by JLM Marketing to be guarantied by the other JLM
Domestic Entities, (b) the issuance of the Florida Term Note by JLM Industries
to be guarantied by the other JLM Domestic Entities and (c) the issuance of the
North Carolina Term Note by JLM Terminals to be guarantied by the other JLM
Domestic Entities and MacDonald;

WHEREAS, the JLM Domestic Entities are and will be operated on an
integrated basis in connection with their respective financial resources; the
JLM Domestic Entities are and will be operated as separate entities but will
constitute part of one business enterprise and are and will be operated on an
integrated basis in connection with their respective business activities and
their respective financial resources; each of the JLM Domestic Entities will
receive direct economic and financial benefits from the Debt incurred under
this Agreement and the incurrence of such Debt is in the best interests of such
JLM Domestic Entity; each of the JLM Domestic Entities acknowledges that the
Bank would not provide the financing hereunder but for the joint and several
obligations of

<PAGE> 7

such JLM Domestic Entity hereunder with respect hereto; each of the JLM
Domestic Entities will receive direct economic and financial benefits from the
Debt incurred under this Agreement by such JLM Domestic Entity and the
incurrence of such Debt is in the best interests of such JLM Domestic Entity.

NOW THEREFORE, the parties hereto agree as follows:

ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.

Section 1.01. Definitions. As used in this Agreement the following
terms have the following meanings (terms defined in the singular to have a
correlative meaning when used in the plural and vice versa):

"Acquisition" means any transaction pursuant to which any JLM entity (a)
acquires equity securities (or warrants, options or other rights to acquire such
securities) of any Person, (b) causes or permits any Person be merged into
any JLM Entity, in any case pursuant to a merger, purchase of assets or any
reorganization providing for the delivery or issuance to the holders of such
Person's then outstanding securities, in exchange for such securities, of cash
or securities of any JLM Entity, or a combination thereof, or (c) purchases all
or substantially all of the business or assets of any Person.

"Affiliate" means any Person (other than an Obligor): (a) which directly
or indirectly controls, or is controlled by, or is under common control with,
any JLM Entity; (b) which directly or indirectly beneficially owns or holds 10%
or more of any class of voting stock of any JLM Entity; (c) 10% or more of the
voting stock of which is directly or indirectly beneficially owned or held by
any JLM Entity; or (d) which is a partnership in which any JLM Entity is a
general partner. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.

"Agreement" means this Amended and Restated Credit Agreement, as amended
or supplemented from time to time. References to Articles, Sections, Exhibits,
Schedules and the like refer to the Articles, Sections, Exhibits, Schedules and
the like of this Agreement unless otherwise indicated.

"Banking Day" means any day on which commercial banks are not authorized
or required to close in Boston, Massachusetts.

"Borrowing Base" means at any date of determination thereof, the sum of
(a) eighty-five percent (85%) of Eligible Receivables plus (b) the lesser of
(i) fifty percent (50%) of Eligible Inventory and (ii) $4,000,000; the
Borrowing Base shall be determined by the Bank based upon a Borrowing Base
Certificate submitted by JLM Marketing to the Bank not less frequently than

<PAGE> 8

monthly and certified as accurate and complete by the chief financial officer
of JLM Marketing.

"Borrowing Base Certificate" means each certificate delivered by JLM
Marketing substantially in the form of Exhibit B1.

"Canadian Guarantee" means the guaranty in the form of Exhibit E to be
delivered by JLM Canada under the terms of this agreement, as amended or
supplemented from time to time.

"Canadian Security Agreement" means the security agreement in the form of
Exhibit F to be delivered by JLM Canada under the terms of this Agreement, as
amended or supplemented from time to time.

"Capital Expenditures" means, with respect to any Person, with respect
to any fiscal period, the aggregate amount of expenditures made by such Person
to acquire or construct fixed assets, plant and equipment (including renewals,
improvements, replacements and incurrence of obligations under Capital Leases
but excluding repairs) for such period.

"Capital Lease" means any lease which has been or should be capitalized
on the books of the lessee in accordance with GAAP.

"Cash Flow" means, with respect to any Person, with respect of any fiscal
period, the result of (a) net income for such Person for such period plus (b)
the aggregate amount of depreciation, amortization and other non-cash charges
to the extent such amount was deducted in the computation of net income for
such period minus (c) the aggregate amount of Capital Expenditures of such
Person for such period to the extent such amount is not financed with Debt
incurred by such Person.

"Cash Flow Ratio" means, with respect to any Person, at any date of
determination thereof, the ratio of (a) Cash Flow of such Person for the most
recently ended four fiscal quarters to (b) current maturities at such date of
Debt payable more than one year from the date of its incurrence.

"Closing Date" means the date this Agreement has been executed by the JLM
Domestic entities, Macdonald and the Bank.

"Code" means the Internal Revenue code of 1986, as amended from time to
time.

"Collateral" means all of each Obligor's right, title and interest in and
to Property in which such Obligor has granted a Lien to the Bank under any
Facility Document.

"Compliance Certificate" means the compliance certificate in the form of
Exhibit B2 to be delivered by the JLM Domestic Entities under the terms of this
Agreement.

<PAGE> 9

"Consolidated Cash Flow" means, with respect to any fiscal period, Cash
Flow of the JLM Entities for such fiscal period, as determined on a
consolidated basis in accordance with GAAP.

"Consolidated Cash Flow Ratio" means, with respect to any Person, at any
date of determination thereof, the ratio of (a) Consolidated Cash Flow of such
Person for the most recently ended four fiscal quarters to (b) current
maturities at such date of Debt payable more than one year from the date of its
incurrence.

"Consolidated Liabilities" means with respect to any fiscal period, net
income of the JLM Entities for such fiscal period, as determined on a
consolidated basis in accordance with GAAP.

"Consolidated Net Income" means, with respect to any fiscal period, net
income of the JLM Entities for such fiscal period, as determined on a
consolidated basis in accordance with GAAP.

"Consolidated Tangible Assets" means, at any date of determination
thereof, all assets of the JLM Entities except assets of the JLM Entities which
would be classified as intangibles under GAAP including, without limitation,
patents, copyrights, trademarks, trade names, franchises, goodwill and other
similar intangible assets, as determined on a consolidated basis in accordance
with GAAP.

"Consolidated Tangible Net worth" means, at any date of determination
thereof, the difference between (a Consolidated Tangible Assets and (b)
Consolidated Liabilities.

"Customer" shall have the meaning assigned to such term in the Security
Agreement.

"Debt" means, with respect to any Person: (a) indebtedness of such Person
for borrowed money; (b) indebtedness for the deferred purchase price of
Property or services (except trade payables in the ordinary course of
business); (c) Unfunded Benefit Liabilities of such Person (if such Person is
not a JLM Entity, determined in a manner analogous to that of determining
Unfunded Benefit Liabilities of a JLM Entity); (d) the face amount of any
outstanding letters of credit issued for the account of such Person; (e)
obligations arising under acceptance facilities; (f) Guaranties of such Person;
(g) obligations secured by any Lien on Property of such Person; and (h)
obligations of such Person as lessee under Capital Leases.

"Default" means any event which with the giving of notice or lapse of
time, or both, would become an Event of Default.

"Default Rate" means, with respect to the principal of any Loan and, to
the extent permitted by law, any other amount payable by any Obligor under this
Agreement or any other Facility Document, or any Note that is not paid when due
(whether at stated maturity, by acceleration or otherwise), a rate per annum
during the period

<PAGE> 10

from and including the due date, to, but excluding the date on which such
amount is paid in full equal to two percent (2%) above the Prime Rate as in
effect from time to time.

"Dollars" and the sign "$" mean lawful money of the United States of
America.

"Eligible Inventory" means such Inventory of such part of such Inventory
of JLM Marketing and JLM Canada as shall be designated by the Bank from time to
time as being acceptable to it in its sole discretion in all respects; provided
that no Inventory shall constitute "Eligible Inventory" unless such Inventory
is owned solely by JLM Marketing and JLM Canada and no other Person has and
right, title, interest, claim or Lien thereon, or thereto, other than in favor
of the Bank securing the obligations hereunder and the Lien granted by such JLM
Marketing and JLM Canada in favor of the Bank constitutes a first priority
security interest in such Inventory.

"Eligible Receivables" means such Receivables of the JLM Marketing and
JLM Canada (but in the case of Receivables of JLM Canada as to which the Bank
so requires only to the extent that such receivables are fully insured and are
assigned to JLM Marketing) as shall be designated by the Bank from time to time
as being acceptable to it in its sole discretion in all respects; provided that
no Receivable shall constitute an "Eligible Receivable" unless (a) such
Receivable is bona fide, valid and constitutes an enforceable order or
contract, written or oral, for goods sold, and the same were sold in accordance
with such order or contract, (b) such Receivable is owned solely by an Obligor
and no other Person has any right, title, interest, claim or Lien thereon, or
thereto, other than in favor of the Bank securing the obligations hereunder and
the Lien granted by such Obligor in favor of the Bank constitutes a first
priority security interest in such Receivable, (c) such Receivable is not
outstanding for more than 90 days from the earlier of the date of shipment of
goods to the Customer or the invoice date, (d) such Receivable is not subject
to any claim of reduction, counterclaim, setoff, recoupment, or other defense
in law or equity, or any claim for credits , contractual allowances, discounts,
or other credit adjustments by the Customer, (e) the Bank in the exercise of
its sole discretion has not deemed such Receivable ineligible because of
uncertainty as the creditworthiness of the Customer in relation to the amount of
credit extended and (f) such Receivable is not the obligation of a JLM entity
or an Affiliate of a JLM Entity.

"Environmental Indemnity Agreements" means the Environmental Indemnity
Agreement, dated as of June 15, 1994 between the Bank and JLM Terminals and the
Environmental Indemnity Agreement, dated December 2, 1992, among the Bank, JLM
Marketing and JLM Industries.

"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, licenses, agreements or other

<PAGE> 11

governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminates,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminates, chemicals, or industrial, toxic or hazardous
substances or wastes.

"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.

"ERISA Affiliate" means any corporation or trade or business which is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which any ELM Entity is a member, or (ii) solely for purposes of
potential liability under Section 302 (c)(11) of ERISA and Section 412(c)(11)
of the Code and the lien created under Section 302(f) of ERISA and Section
412(n) if the Code, described in Section 414(m) or (o) of the Code of which any
JLM Entity is a member.

"Event of Default" has the meaning given such term in Section 9.01.

"Facility Documents" means this Agreement, the Notes, the Letters of
Credit, the Canadian Guarantee, the Security Documents and the Environmental
Indemnity Agreements as each may be amended from time to time.

"First Florida Mortgage Modification" means the Mortgage Modification
Agreement and Notice of Future Advance, executed June 4, 1994, by and between
JLM Marketing, JLM Industries and the Bank, as amended or supplemented from
time to time.

"Fiscal Year Net worth Increases Amounts" means (a) $600,000 for each of
the fiscal years of the JLM Entities ending on December 31, 1994 and December
31, 1995 and (b) $750,000 for each of fiscal years ending thereafter.

"Florida Term Note" means the promissory note of JLM Industries and JLM
Marketing in the form of Exhibit A2 hereto evidencing the Florida Term Loan
made by the Bank hereunder and all promissory notes delivered in substitution
or exchange therefor, as amended or supplemented from time to time.

"Florida Mortgage" means the Mortgage from JLM Marketing and JLM
Industries in favor of the Bank, dated December 2, 1992, as recorded in
Official Records Book 6812, page 1027, of the public records of Hillsborough
County, Florida as modified by the First Florida Mortgage Modification.

<PAGE> 12

"Forfeiture Proceeding" means any action, proceeding or investigation
affecting any JLM Entity or any of its Affiliates before any court,
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, or the receipt of notice by any such party that any of
them is a suspect in or a target of any governmental inquiry or investigation,
which may result in an indictment of any of them or the seizure or forfeiture
of any of their Property.

"GAAP" means generally accepted accounting principles in the United
States of America as is effect from time to time, applied on a basis consistent
with those used in the preparation of the financial statements referred to in
Section 5.05 (except for changes concurred in by the JLM Entities' independent
public accountants).

"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

"Guaranty" means, with respect to any Person, guaranties, endorsements
(other that for collection in the ordinary course of business) and other
contingent obligations of such Person with respect to the obligations of any
other Person (including, but not limited to, an agreement to purchase any
obligation, stock, assets, goods or services or to supply or advance any funds,
assets, goods or services, or an agreement to maintain or cause such Person to
maintain a minimum working capital or net worth or otherwise to assure the
creditors of any such other Person against loss).

"Hazardous Materials" means any and all pollutants, contaminants, toxic or
hazardous wastes or any other substances, the removal of which is required or
the generation, manufacture, refining, production, processing, treatment,
storage, handling, transportation, transfer, use, disposal, release, discharge,
spillage, seepage, or filtration of which is restricted, prohibited or
penalized by any applicable law.

"Inventory" shall have the meaning assigned to such term in the Security
Agreement.

"JLM Canada" means JLM Chemicals Canada Ltd., a corporation organized
under the laws of the Province of Ontario, Canada.

"JLM Entity" means JLM Industries or any Subsidiary of JLM Industries
whose accounts are or are required to be consolidated or included with the
accounts of JLM Industries in accordance with GAAP.

"Lending Office" means the lending office of the Bank (or of an affiliate
of the Bank) on its signature page hereof or such other office of the Bank (or
of an affiliate of the Bank) as the

<PAGE> 13
Bank may from time to time specify to the JLM Domestic Entities as the office by
which its Loans are to be made and maintained.

"Letter of Credit Availability" means, at any date of determination
thereof, the amount by which (a) the result of (i) the aggregate amount of the
Revolving Credit Commitment as of such date minus (ii) the unpaid aggregate
principal amount of the Revolving Credit Loans then outstanding exceeds (b) the
aggregate amount of the Letter of Credit Obligations at such date; provided that
in no event shall the Letter of Credit Obligations exceed $3,500,000 for Letters
of Credit whose expiry date is more than 90 days from such date of
determination.

"Letter of Credit Obligations" means, at any date of determination
thereof, all liabilities of JLM Marketing with respect to Letters of Credit,
whether or not any liability is contingent, including, without limitation, the
sum of (a) the aggregate amount available to be drawn under the Letters of
Credit then outstanding plus (b) the aggregate amount of all unpaid
Reimbursement Obligations.

"Leverage Ratio" means, at any date of determination thereof, the ratio
of (a) Consolidated Liabilities to (b) Consolidated Tangible Net Worth.

"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, charge, conditional sale, title
retention agreement, financing lease or other encumbrance or similar right of
others, or any agreement to give any of the foregoing.

"Loan" means any loan made by the Bank pursuant to Section 2.01.

"Material Adverse Effect" means any material adverse effect on (a) the
business, profits, properties or condition of the JLM Entities, taken as a
whole, (b) the ability of any Obligator to perform their respective obligations
under each of the Facility Documents to which it is a party, (c) the binding
nature, validity or enforceability of any of the Facility Documents and (d) the
validity, perfection, priority or enforceability of the Liens in favor of the
Bank securing the obligations hereunder, which, in each case, arises from, or
reasonably could be expected to arise from, any action or omission of action on
the part of any JLM Entity or the occurrence of any event or the existence of
any fact or condition in respect of any JLM Entity or any of their respective
properties.

"Multiemployer Plan" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by any JLM Entity or any ERISA
Affiliate and which is covered by Title IV of ERISA.

<PAGE> 14
"North Carolina Deed of Trust" means the Deed of Trust and Security
Agreement, dated June 1994, from JLM Terminals to _____________________, as
trustee, for the benefit of the Bank.

"North Carolina Term Note" means the promissory note of JLM Terminals in
the form of Exhibit A3 hereto evidencing the North Carolina Term Loans made by
the Bank hereunder and all promissory notes delivered in substitution or
exchange therefor, as amended or supplemented from time to time.

"Notes" means the Revolving Credit Note, the Florida Term Note and the
North Carolina Term Note.

"Obligors" Means, collectively, the JLM Domestic Entities, JLM Canada and
MacDonald.

"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.

"Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by any JLM Entity or any
ERISA Affiliate and which is covered by Title IV of ERISA, other than a
Multiemployer Plan.

"Prime Rate" means that rate of interest from time to time announced by
the Bank at its Principal Office as its prime commercial lending rate.

"Principal Office" means the principal office of the Bank, presently
located at 225 Franklin Street, Boston, MA 02110.

"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.

"Purchase Money Lien" means a Lien on any Property acquired by any JLM
Entity or placed on any Property in order to finance the acquisition or
construction of such Property or the construction of improvements located on
such Property, or the assumption of any Lien on Property existing at the time of
the acquisition of such Property or of the Person holding such Property or a
Lien incurred in connection with any conditional sale or other title retention
agreement or a Capital Lease.

"Receivables" shall have the meaning assigned to such term in the
Security Agreement.

<PAGE> 15
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.

"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.

"Reimbursement Obligation" means the obligation of JLM Marketing to
reimburse State Street in accordance with the terms of this Agreement for the
payment made by State Street under any Letter of Credit.

"Revolving Credit Commitment" means the obligation of the Bank to make
the Revolving Credit Loans under this Agreement in the aggregate principal
amount of $9,000,000, as such amount may be reduced or otherwise modified from
time to time.

"Revolving Credit Note" means the promissory note of JLM Marketing in the
form of Exhibit A1 hereto evidencing the Revolving Credit Loans made by the Bank
hereunder and all promissory notes delivered in substitution or exchange
therefor, as amended or supplemented from time to time.

"Revolving Credit Termination Date" means May 25, 1997.

"Security Agreement" means the security agreement in the form of
Exhibit D to be delivered by each of the JLM Domestic Entities under the terms
of this Agreement, as amended or supplemented from time to time.

"Security Documents" means the Security Agreement, the Canadian Security
Agreement, the Florida Mortgage, the North Carolina Deed of Trust and each other
security document that may from time to time be delivered to the Bank in
connection therewith.

"Subsidiary" means, with respect to any Person, any corporation or other
entity of which at least a majority of the securities or other ownership
interest having ordinary voting power (absolutely or contingently) for the
election of directors or other persons performing similar functions are at the
time owned directly or indirectly by such Person.

"Term Loans" means the Florida Term Loan and the North Carolina Term
Loan.

"UCP" means the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500, as the
same may be amended from time to time.

"Unfunded Benefit Liabilities" means, with respect to any Plan, the
amount (if any) by which the present value of all benefit liabilities (within
the meaning of Section 4001(a)(16) of ERISA) under the Plan exceeds the fair
market value of all Plan assets

<PAGE> 16
allocable to such benefit liabilities, as determined on the most recent
valuation date of the plan and in accordance with the provisions of ERISA for
calculating the potential liability of any JLM Entity or any ERISA Affiliate
under Title IV of ERISA.

Section 1.02. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data required to be delivered hereunder shall be prepared in accordance with
GAAP.

ARTICLE 2. THE LOANS.

Section 2.01. The Loans. (a) Subject to the terms and conditions of
this Agreement, the Bank agrees to make revolving credit loans (the "Revolving
Credit Loans") to JLM Marketing from time to time from and including the date
hereof to and including the Revolving Credit Termination Date, up to but not
exceeding in the aggregate principal amount at any one time outstanding, the
amount of the lesser of (i) the difference between the Revolving Credit
Commitment and the Letter of Credit Obligations and (ii) the difference between
the Borrowing Base and the Letter of Credit Obligations. The revolving Credit
Loans shall be due and payable on the Revolving Credit Termination Date.

(b) Subject to the terms and conditions of this Agreement, the Bank
agrees to modify and extend an existing term loan (the "Florida Term Loan") to
JLM Industries on the Closing Date in the aggregate original principal amount of
$2,000,000. The Florida Term Loan will be repaid in 120 consecutive monthly
installments each in an amount necessary to fully amortize the original
principal amount, together with accrued interest thereon, on an accrual basis
over a period of 240 consecutive months. The first such installment shall be
due on June 1, 1994 with subsequent installments due on the 1st day of each
month thereafter to and including May 1, 2004. The last such installment shall
be in an amount necessary to repay in full the unpaid principal amount of the
Florida Term Loan.

(c) Subject to the terms and conditions of this Agreement, the Bank
agrees to make a term loan (the "North Carolina Term Loan") the JLM Terminals on
the Closing Date in the aggregate original principal amount of $1,250,000. The
North Carolina Term Loan will be repaid in 72 consecutive monthly installments
each in amount necessary to fully amortize the original principal amount,
together with accrued interest thereon, on an accrual basis as follows: (i)
$50,000 of the original principal amount during the first year of the North
Carolina Term Loan, (ii) $150,000 of the original principal amount during the
second year of the North Carolina Term Loan, (iii) $250,000 of the original
principal amount during each of the next three years of the North Carolina Term
Loan and (iv) $300,000 during the sixth and final year of the North Carolina
Term Loan. The first such installment shall be due on June 1, 1994 with
subsequent installments due on the 1st day of each month thereafter to an
including May 1, 2000. The last such

<PAGE> 17
installment shall be in an amount necessary to repay in full the unpaid
principal amount of the North Carolina Term Loan.

Section 2.02. The Notes. The Revolving Credit Loans shall be evidenced
by a single promissory note in favor of the Bank in the form of Exhibit A1,
dated the Closing Date, duly completed and executed by JLM Marketing. The
Florida Term Loans shall be evidenced by a single promissory note in favor of
the Bank in the form of Exhibit A2, dated the Closing Date, duly completed and
executed by JLM Industries and JLM Marketing. The North Carolina Term Loan
shall be evidenced by a single promissory note in favor of the Bank in the form
of Exhibit A3, dated the Closing Date, duly completed and executed by JLM
Terminals.

Section 2.03. Purposes. The JLM Industries, JLM Marketing and JLM
Terminals shall use the proceeds of the Loans for general corporate purposes.
Such proceeds shall not be used for the purpose, whether immediate, incidental
or ultimate, of buying or carrying "margin stock" within the meaning of
Regulation U.

Section 2.04. Borrowing Procedures. JLM Marketing when it intends to
effect a borrowing shall give the Bank notice of each borrowing to be made
hereunder as provided in Section 2.08. Not later than 1:00 p.m. Boston,
Massachusetts time on the date of such borrowing, the Bank, shall through its
Lending Office and subject to the conditions of this Agreement, make the amount
of the Revolving Credit Loan to be made on such day available to JLM Marketing,
in immediately available funds, by the Bank crediting an account of JLM
Marketing designated by JLM Marketing and maintained with the Bank at the
Lending Office.

Section 2.05. Prepayments. JLM Marketing shall have the right to make
prepayments of principal on the Revolving Credit Note at any time or from time
to time; provided that JLM Marketing shall give the Bank notice of each such
prepayment as provided in Section 2.08. In the case of the Term Loans, all
prepayments shall be applied to the principal installments of the Term Loans in
the inverse order of their maturities and shall be subject to the prepayment
premiums set forth in the Florida Term Note and the North Carolina Term Note,
respectively.

Section 2.06. Changes of Commitments. JLM Marketing shall have the
right to reduce or terminate the amount of the unused Revolving Credit
Commitment at any time or from time to time, provided that: (a) JLM Marketing
shall give notice of each such reduction or termination to the Bank as provided
in Section 2.08; and (b) each partial reduction shall be in an aggregate amount
at least equal to $1,000,000. The Revolving Credit Commitment once reduced or
terminated may not be reinstated.

Section 2.07. Certain Notices. Notices by JLM Marketing to the Bank of
each borrowing pursuant to Section 2.04 and each prepayment pursuant to Section
2.05, and each reduction or termination of the Revolving Credit Commitment
pursuant to Section

<PAGE> 18

2.06 shall be irrevocable and shall be effective only if received by the Bank
not later than 1;00 p.m. Boston, Massachusetts time, and (a) in the case of
borrowings and prepayments of Loans, given the same Banking Day; and (b) in the
case of reductions or terminations of the Revolving Credit Commitment, given
three Banking Days prior thereto. Each such notice shall specify the Loans to
the borrowed or prepaid and the date of the borrowing or prepayment (which shall
be a Banking Day). Each such notice of reduction or termination shall specify
the amount of the Revolving Credit Commitment to be reduced or terminated.

Section 2.08. Minimum Amounts. Except for borrowings which exhaust the
full remaining amount of the Revolving Credit Commitment, each borrowing of
Revolving Credit Loans and prepayment of Loans shall be in an amount not less
than $100 in the aggregate for the Bank unless such minimum amount is waived by
the Bank.

Section 2.09 Interest. (a) Interest shall accrue on the outstanding
and unpaid payment amount of each Loan for the period from and including the
date of such Loan to but excluding the date such Loan is due at the following
rates per annum: (i) for the Revolving Credit Loan, at a variable rate per
annum equal to the Prime Rate, (ii) for the Florida Term Loan, at a fixed rate
per annum equal to __% and (iii) for the North Carolina Term Loan, at a variable
rate per annum equal to the Prime Rate plus 1.50% with an option to allow the
Borrower to convert the North Carolina Terms Loan interest rate to a fixed rate
within 180 days of the date of this Agreement. If the principal amount of any
Loan and any other amount payable by JLM Marketing hereunder or under the Notes
shall not be paid when due (at stated maturity, by acceleration or otherwise),
interest shall accrue on such amount to the fullest extent permitted by law from
and including such due date to but excluding the date such amount is paid in
full at the Default Rate.

(b) The interest rate on each Loan shall change when the variable rate
changes and interest on each such Loan shall be calculated on the basis of a
year of 360 days for the actual number of days elapsed.

(c) Accrued interest shall be due and payable in arrears upon any full
payment of principal and on the first day of each month commencing the first
such date after such Loan.

Section 2.10. Fees. (a) JLM Marketing shall pay to the Bank a facility
fee for the Revolving Credit Loans at a rate per annum equal to .75% on the
aggregate amount of the Revolving Credit Commitment per year payable quarterly
in advance. JLM Industries shall pay to the Bank a facility fee for the Florida
Term Loan equal to .75% of the aggregate principal amount of the Florida Term
Loan payable on the Closing Date. JLM Terminals shall pay to the Bank a
facility fee for the North Carolina Term Loan equal to 1% on the aggregate
principal amount of the North Carolina Term Loan payable on the Closing Date.

<PAGE> 19
(b) JLM Marketing shall pay to the Bank a commitment fee at a rate per
annum equal to .25% on the daily average of the difference among (i) the
aggregate amount of the Revolving Credit Commitment minus (ii) the unpaid
aggregate principal amount of the Revolving Credit Loans then outstanding minus
(iii) the Letter of Credit Obligations minus (iv) the aggregate principal amount
of banker's acceptance than outstanding, for the period from and including the
Closing Date to the earlier of the date the Revolving Credit Commitment is
terminated or the Revolving Credit Termination Date, calculated on the basis of
a year of 360 days for the actual number of days elapsed. The accrued
commitment fee shall be due and payable in arrears upon any reduction or
termination of the Revolving Credit Commitment and on the first day of each
June, September, December and March.

Section 2.11. Payments Generally. All payments under this Agreement or
the Notes shall be made in Dollars in immediately available funds not later
than 1:00 p.m. Boston, Massachusetts time on the relevant dates specified above
(each such payment made after such time on such due date to be deemed to have
been made on the next succeeding Banking Date) at the Lending Office. The Bank
may (but shall not be obligated to) debit the amount of any such payment which
is not made by such time to any ordinary deposit account of JLM Industries, JLM
Marketing, JLM Terminals or JLM Canada with the Bank. JLM Industries, JLM
Marketing, JLM Terminals or JLM Canada Entities shall, at the time of making
each payment under this Agreement or the Notes, specify to the Bank the
principal or other amount payable by JLM Industries, JLM Marketing, JLM
Terminals or JLM Canada under this Agreement or the Notes to which such payment
is to be applied (and in the event that it fails to so specify, or if a Default
or Event of Default has occurred and is continuing, the Bank may apply such
payment as it may elect in its sole discretion). If the due date of any
payment under this Agreement or the Notes would otherwise fall on a day which
is not a Banking Day, such date shall be extended to the next succeeding
Banking Day and interest shall be payable for any principal so extended for
the period of such extension.

ARTICLE 3. THE LETTERS OF CREDIT.

Section 3.01. Letters of Credit. (a) Subject to the terms and
conditions of this Agreement, the Bank agrees to issue on any Banking Day prior
to the Revolving Credit Termination Date for the account of JLM Marketing
documentary and standby letters of credit in such form as may from time to time
be approved by the Bank acting reasonably (together with the applications
therefor, the "Letters of Credit"); provided that on the date of the issuance of
any Letter of Credit, and after giving effect to such issuance, the Letter of
Credit Obligations shall not exceed the Letter of Credit Availability.

(b) Each Letter of Credit shall (i) have an expiry date no later than
the Revolving Credit Termination Date, (ii) be denominated in Dollars, (iii) be
in a minimum face amount of

<PAGE> 20

$10,000 and (iv) provide for the payment of sight drafts when presented for
honor thereunder in accordance with the terms thereof and when accompanied by
the documents described or when such documents are presented, as the case may
be.

Section 3.01. Purposes. JLM Marketing shall use the Letters of Credit
for the purpose of securing obligations incurred in the ordinary course of its
business.

Section 3.03. Procedures for Issuance of Letters of Credit. JLM
Marketing may from time to time request that the Bank issue a Letter of Credit
by delivering to the Bank at its address for notices specified herein an
application therefor in such form as may from time to time be approved by the
Bank acting reasonably, completed to the satisfaction of the Bank, and such
other certificates, documents and other papers and information as the Bank may
reasonably request. Upon receipt of any application, the Bank will process such
application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue the Letter of Credit in such customized form
as may reasonably be requested by JLM Marketing (but in no event shall the Bank
issue any Letter of Credit later than five Banking Days after receipt of the
application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by the Bank and
JLM Marketing. The Bank shall furnish a coy of such Letter of Credit to JLM
Marketing promptly following the issuance thereof.

Section 3.04. Payments. In order to induce the Bank to issue the
Letters of Credit, JLM Marketing hereby agrees to reimburse the Bank, unless
such Reimbursement Obligation has been accelerated pursuant to Section 9.02, on
each date that JLM Marketing has been notified by the Bank that any draft
presented under any Letter of Credit is paid by the Bank, for (i) the amount of
the draft paid by the Bank and (ii) the amount of any taxes, reasonably fees,
reasonable charges or other reasonable costs or expenses whatsoever incurred by
the Bank in connection with any payment made by the Bank under, or with respect
to, such Letter of Credit. Each such payment shall be made to the Bank at its
office specified in Section 12.06, in lawful money of the United States and in
immediately available funds on the day that payment is made by the Bank.
Interest on any and all amounts remaining unpaid by JLM Marketing under this
Section 3.04 at any time from the date such amounts become payable (whether at
stated maturity, by acceleration or otherwise) until payment in full shall be
payable to the Bank on demand at a fluctuating rate per annum equal to Default
Rate.

Section 3.05. Further Assurances. JLM Marketing hereby agrees to do and
perform any and all acts and to execute any and all further instruments from
time to time reasonably requested by the Bank more fully to effect the purposes
of this Agreement and the issuance of the Letters of Credit opened hereunder.

<PAGE> 21

Section 3.06. Obligations Absolute. Provided that the Bank has
fulfilled its obligations under the UCP, the payment obligations of JLM
Marketing under Section 3.05 shall be unconditional and irrevocable and shall
be paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:

(a) the existence of any claim, set-off, defense or other right which
JLM Marketing may have at any time against any beneficiary, or any transferee,
of any Letter of Credit (or any Persons for whom any such beneficiary or any
such transferee may be acting), the Bank, or any other Person, whether in
connection with this Agreement, any other Facility Document, the transactions
contemplated herein, or any unrelated transaction;

(b) any statement or any other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect unless the
Bank's actions with respect thereto constituted gross negligence or willful
misconduct;

(c) payment by the Bank under any Letter of Credit against
presentation of a draft or certificate which does not comply with the terms of
such Letter of Credit, except payment resulting solely from the gross negligence
or willful misconduct of the Bank; or

(d) any other circumstances or happening whatsoever, whether or not
similar to any of the foregoing, except circumstances or happenings resulting
solely from the gross negligence or willful misconduct of the Bank.

Section 3.07. Cash Collateral Account. If the Revolving Credit
Commitment is terminated and all amounts owing under this Agreement, the Notes
and the Letters of Credit become due and payable pursuant to Section 9, JLM
Marketing shall deposit with the Bank, on the date such obligations become due
and payable, an amount in cash equal to the Letter of Credit Obligations as of
such date and the other amounts owning hereunder. Such amounts shall be
deposited in a cash collateral account to be established by the Bank and shall
constitute collateral security for the Letter of Credit Obligations and other
amounts owing hereunder. All amounts in such cash collateral account shall be
maintained pursuant to the cash collateral account agreement which shall grant
to the Bank exclusive dominion and control (including exclusive rights of
withdrawal) over all such amounts and shall be otherwise satisfactory in form
and substance to the Bank.

Section 3.08. Letter of Credit Fees. (a) JLM Marketing agrees to pay
in advance the Bank a non-refundable letter of credit fee with respect to each
Letter of Credit, payable in the same currency as that in which such Letter of
Credit is denominated, computed at the rate per annum equal to one percent of
the

<PAGE> 22

aggregate undrawn amount under such Letter of Credit on the date on which such
fee is calculated.

(b) JLM Marketing agrees to pay the Bank, for its own account, its
normal and customary administration, amendment, transfer, payment and
negotiation fees charged in connection with its issuance and administration of
letters of credit.

ARTICLE 4. CONDITIONS PRECEDENT.

Section 4.01. Documentary Conditions Precedent. The obligations of the
Bank to make any Loan and to issue any Letter of Credit are subject to the
condition precedent that the Bank shall have received on or before the date of
such Loans or date of the issuance of such Letters of Credit each of the
following, in form and substance satisfactory to the Bank and its counsel:

(a) counterparts of this Agreement executed by each of the JLM
Domestic Entities, MacDonald and the Bank;

(b) the Revolving Credit Note duly executed by JLM Marketing, the
North Carolina Term Note duly executed by JLM Terminals and the Florida Term
Note duly executed by JLM Industries and JLM Marketing;

(c) the North Carolina Deed of Trust duly executed by JLM Terminals,
the First Florida Mortgage Modification duly executed by JLM Industries and the
Florida Mortgage shall be in full force and effect;

(d) the Security Agreement duly executed by each of the JLM Domestic
Entities together with (i) executed copies of the financing statements (UCC-1)
to be duly filed under the Uniform Commercial Code of all jurisdictions
necessary or, in the opinion of the Bank, desirable to perfect the security
interests created by the Security Agreement; (ii) executed copies of the
amendment statements (UCC-3) to be duly filed under the Uniform Commercial Code
of all jurisdictions necessary or, in the opinion of the Bank, desirable to
perfect the security interests created by the Security Agreement and (iii)
copies of searches identifying all of the financing statements on file with
respect to each of the JLM Domestic Entities in all jurisdictions referred
to under (i);

(e) the Canadian Guarantee duly executed by JLM Canada;

(f) the Canadian Security Agreement duly executed by JLM Canada
together with (i) executed copies of the financing statements to be duly filed
under the Personal Property Securities Act and the Uniform Commercial Code of
all jurisdictions necessary or, in the opinion of the Bank, desirable to perfect
the security interests created by the Canadian Security Agreement and (ii)
copies of searches identifying all of the financing statements on

<PAGE> 23

file with respect to JLM Canada in all jurisdictions referred to under (i);

(g) the Participation Agreement duly executed by the Bank and Barnette
Bank of Tampa, N.A.;

(h) commitments to issue (i) a policy of mortgagee title insurance in
favor of the Bank with respect to the Property subject to the Lien of the North
Carolina Deed of Trust and (ii) endorsements to the policy of mortgagee title
insurance in favor of the Bank with respect to the Property subject to the Lien
of the Florida Mortgage;

(i) "Phase II" environmental assessments with respect to the Property
subject to the Lien of the North Carolina Deed of Trust;

(j) certificates or other evidence of casualty insurance policies
covering all of the Property subject to the Lien of the Security Documents with
appropriate loss payable endorsements indicating assignment of proceeds
thereunder to the Bank and certificates or other evidence of liability insurance
with appropriate endorsements indicating the coverage of the Bank as an
additional insured;

(k) certificates of the Secretary or Assistant Secretary of each of
the Obligors, dated the Closing Date, (i) attesting to all corporate action
taken by such Obligor, including resolutions of its Board of Directors
authorizing the execution, delivery and performance of each of the Facility
Documents to which it is a party and each other document to be delivered
pursuant to this Agreement, (ii) certifying the names and true signatures of the
officers of such Obligor authorized to sign the Facility Documents to which it
is a party and the other documents to be delivered by such Person under this
Agreement and (iii) verifying that the charter and by-laws of such Obligor
attached thereto are true, correct and complete as of the date thereof;

(l) a certificate of a duly authorized officer of each of the
Obligors, dated the Closing Date, stating that the representations and
warranties in Article 5 are true and correct in all material respects on such
date as though made on and as of such date and that no event has occurred and is
continuing which constitutes a Default or Event of Default;

(m) good standing certificates and certified copies of all charter
documents with respect to each Obligor certified by the appropriate officer of
its jurisdiction of incorporation, and evidence that each of the Obligors is
qualified as a foreign corporation in every other jurisdiction in which it does
business; and

(n) favorable opinions of John T. White, Esq., inside counsel to the
Obligors, and Brans, Lehun, Baldwin & Champagne,

<PAGE> 24
special Canadian counsel, each dated the Closing Date, in substantially the
forms of Exhibit C1 and Exhibit C2 and as to such other matters as the Bank may
reasonably request.

Section 4.02. Additional Conditions Precedent. The obligations of the
Bank to make any Loans pursuant to a borrowing which increases the amount
outstanding hereunder (including the initial borrowing) or to issue any Letter
of Credit shall be subject to the further conditions precedent that on the date
of such Loans, the following statements shall be true: (i) the representations
and warranties contained in Article 5, in Article 3 of the Security Agreement,
and in any other Facility Document, are true and correct on and as of the date
of such Loans or the issuance of such Letters of Credit as though made on and as
of such date; and (ii) no Default or Event of Default has occurred and is
continuing, or would result from such Loans or the issuance of such Letter of
Credit.

Section 4.03. Deemed Representations. Each Notice of borrowing
hereunder or request for the issuance of a Letter of Credit and acceptance by
JLM Marketing of the proceeds of such borrowing or of the issuance of such
Letter of Credit shall constitute a representation and warranty that the
statements contained in Section 4.02 are true and correct both on the date of
such notice or request and, unless JLM Marketing otherwise notifies the Bank
prior to such borrowing or such issuances, as of the date of such borrowing or
such issuance.

ARTICLE 5. REPRESENTATIONS AND WARRANTIES.

Each of the JLM Domestic Entities hereby represents and warrants that:

Section 5.01. Incorporation, Good Standing and Due Qualification. Each
of the JLM Entities is duly incorporated, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, has the corporate power
and authority to own its assets and to transact the business in which it is now
engaged or proposed to be engaged, and is duly qualified as a foreign
corporation and in good standing under the laws of each other jurisdiction in
which such qualification is required.

Section 5.02. Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by each of the Obligors of the Facility
Documents to which it is a party have been duly authorized by all necessary
corporate action and do not and will not: (a) require any consent or approval of
its stockholders; (b) contravene its charter or by-laws; (c) violate any
provision of, or require any filing (other than as required under the Security
Documents), registration, consent or approval under, any law, rule, regulation
(including, without limitation, Regulation U), order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to any JLM Entity; (d) result in a breach of or constitute a
default or require any

<PAGE> 25
consent under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which any JLM Entity is a party or by which it or its
properties may be bound or affected; (e) result in, or require, the creation or
imposition of any Lien (other than as created under the Security Documents),
upon or with respect to any Property now owned or hereafter acquired by any JLM
Entity; or (f) cause any JLM Entity to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
or any such indenture, agreement, lease or instrument.

Section 5.03. Legally Enforceable Agreements. Each Facility Document
to which any Obligor is a party is, or when delivered under this Agreement will
be, a legal, valid and binding obligation of such Obligor enforceable against
such Obligor in accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights generally.

Section 5.04. Litigation. Except as set forth on Schedule I, there are
no actions, suits or proceedings pending or, to the knowledge of any JLM
Domestic Entity, threatened, against or affecting any JLM Entity before any
court, governmental agency or arbitrator

Section 5.05. Financial Statements. The consolidated and consolidating
balance sheets of the JLM Entities as at December 31, 1993, 1992 and 1991, and
the related consolidated and consolidating income statements and statements of
cash flows and changes in stockholders' equity of the JLM Entities for the
fiscal years then ended, and the accompanying footnotes, together with the
opinion on the consolidated statements of Deloitte & Touche, independent
certified public accountants, and the interim consolidated and consolidating
balance sheets of the JLM Entities as at March 31, 1994, and the related
consolidated and consolidating income statements and statements of cash flows
and changes in stockholders' equity of the JLM Entities for the three month
period then ended, are complete and correct and fairly present the financial
condition of the JLM Entities at such dates and the results of the operations
of the JLM Entities for the periods covered by such statements, all in
accordance with GAAP consistently applied. There are no liabilities of any JLM
Entity, fixed or contingent, which are material but are not reflected in the
financial statements or in the notes thereto and which would be required to be
recorded in such financial statements or notes in accordance with GAAP, other
than liabilities arising in the ordinary course of business since March 31,
1994. No information, exhibit or report furnished by any JLM Entity to the Bank
in connection with the negotiation of this Agreement contained any material
misstatements of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not materially misleading. Since March
31, 1994, there has been no change which could have a Material Adverse Effect.

20
<PAGE> 26
Section 5.06. Ownership and Liens. Each of the JLM Entities has title
to, or valid leasehold interests in, all of its Property including the Property
reflected in the financial statements referred to in Section 6.05 (other than
any Property disposed of in the ordinary course of business), and none of the
Property owned by any JLM Entity and none of its leasehold interests is subject
to any Lien, except as disclosed in such financial statements or as may be
permitted hereunder and except for the Liens created by the Security Documents.

Section 5.07. Taxes. Each of the JLM Entities has filed all tax
returns (federal, state and local) required to be filed and has paid all taxes,
assessments and governmental charges and levies thereon to be due, including
interest and penalties. The federal income tax liability of the JLM Entities
has been audited by the Internal Revenue Service and has been finally
determined and satisfied for all taxable years up to and including the taxable
year ended December 31, 1988.

Section 5.08. ERISA. To the best knowledge of each JLM Domestic
Entity, each Plan and Multiemployer Plan, is in compliance in all material
respects with, and has been administered in all material respects in compliance
with, the applicable provisions of ERISA, the Code and any other applicable
Federal or state law, and no event or condition is occurring or exists
concerning which any JLM Domestic Entity would be under an obligation to
furnish a report to the Bank in accordance with Section 6.08(h) hereof. As of
the most recent valuation date for each Plan, each Plan was "fully funded",
which for purposes of this Section 5.08 shall mean that the fair market value
of the assets of the Plan is not less than the present value of the accrued
benefits of all participants in the Plan, computed on a Plan termination basis.
To the best knowledge of each JLM Domestic Entity, no Plan has ceased being
fully funded as of the date these representations are made with respect to any
Loan under this Agreement. For purposes of this Section 5.08, "material" shall
be determined in relation to the financial position of the JLM Entities as
specified in Section 6.08(g)(viii).

Section 5.09. Subsidiaries and Ownership of Stock. Schedule I sets
forth the name of each Subsidiary of JLM Industries, the jurisdiction of its
incorporation and the Persons owning the outstanding capital stock of such
Subsidiary. Except as set for in Schedule I, all of the outstanding capital
stock of each Subsidiary of JLM Industries are validly issued, fully paid and
nonassessable, and all such shares are owned by JLM Industries or another
Subsidiary of JLM Industries free and clear of all Liens. Except as set forth
in Schedule I, neither JLM Industries nor any of its Subsidiaries owns or holds
the right to acquire any shares of stock or any other security or interest in
any other Person.

Section 5.10. Credit Arrangements. Schedule II is a complete and
correct list of all credit agreements, indentures, purchase agreements,
guaranties, Capital Leases and other investments,

21
<PAGE> 27
agreements and arrangements presently in effect (the "Credit Arrangements")
providing for or relating to extensions of credit (including agreements and
arrangements for the issuance of letters of credit or for acceptance financing)
in respect of which any JLM Entity is in any manner directly or contingently
obligated; and the maximum principal or face amounts of the credit in question,
outstanding and which can be outstanding, are correctly stated, and all Liens
of any nature given or agreed to be given as security therefor are correctly
described or indicated in such Schedule.

Section 5.11. Operation of Business. Each of the JLM Entities
possesses all licenses, permits, franchises, patents, copyrights, trademarks
and trade names, or rights thereto, which are material to conduct its business
substantially as now conducted and as presently proposed to be conducted and no
JLM Entity is in violation of any valid rights of others with respect to any of
the foregoing.

Section 5.12. Hazardous Materials. To the knowledge of the Borrower,
each of the JLM Entities is in compliance with all Environmental Laws in effect
in each jurisdiction where it is presently doing business. No JLM Entity is
subject to any liability under any Environmental Law.

In addition except as set forth on Schedule I, no JLM Entity has
received any (i) notice from any Governmental Authority by which any of its
present or previously-owned or leased real Property has been designated,
listed, or identified in any manner by any Governmental Authority charged with
administering or enforcing any Environmental Law as a Hazardous Material
disposal or removal site, "Super Fund" clean-up site, or candidate for removal
or closure pursuant to any Environmental Law, (ii) notice of any Lien arising
under or in connection with any Environmental Law that has attached to any
revenues of, or to, any of its owned or leased real Property, or (iii) summons,
citation, notice, directive, letter, or other written or oral communication
from any Governmental Authority concerning any intentional or unintentional
action or omission by such JLM Entity in connection with its ownership or
leasing of any real Property resulting in the releasing, spilling, leaking,
pumping, pouring, emitting, emptying, dumping, or otherwise disposing of any
Hazardous Material into the environment resulting in any violation of any
Environmental Law.

Section 5.13. No Default on Outstanding Judgments or Orders. Each of
the JLM Entities has satisfied all judgments and no JLM Entity is in default
with respect to any final judgment, writ, injunction, decree, rule or
regulation of any court, arbitrator or federal, state, municipal or other
governmental authority, commission, board, bureau, agency or instrumentality,
domestic or foreign.

Section 5.14. No Defaults on Other Agreements. No JLM Entity is a
party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or

22
<PAGE> 28
corporate restriction which could have a Material Adverse Effect. No JLM Entity
is in default in any respect in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any agreement or
instrument material to its business to which it is a party.

Section 5.15. Labor Disputes and Acts of God. Neither any material
part of the business nor the properties of any JLM Entity are affected by any
fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance), which could have a Material
Adverse Effect.

Section 5.16. Governmental Regulation. No JLM Entity is subject to
regulation under the Public Utility Holding Company Act of 1935, the Investment
Company Act of 1940, the Interstate Commerce Act, the Federal Power Act or any
statute or regulation limiting its ability to incur indebtedness for money
borrowed as contemplated hereby.

Section 5.17. No Forfeiture. Neither any JLM Entity nor any of its
Affiliates is engaged in or proposes to be engaged in the conduct of any
business or activity which could result in a Forfeiture Proceeding and no
Forfeiture Proceeding against any of them is pending or threatened.

Section 5.18. Solvency.

(a) The present fair saleable value of the assets of JLM
Industries, JLM Marketing, JLM Terminals and JLM Canada after giving effect to
all the transactions contemplated by the Facility Documents and the funding of
the Revolving Credit Commitment and the issuance of all Letters of Credit
hereunder exceeds the amount that will be required to be paid on or in respect
of the existing debts and other Liabilities (including contingent liabilities)
of such JLM Domestic Entity as they mature.

(b) The property of each JLM Domestic Entity does not
constitute unreasonably small capital for such JLM Domestic Entity to carry out
its business as now conducted and as proposed to be conducted including the
capital needs of such JLM Domestic Entity.

(c) No JLM Domestic Entity intends to, nor does any JLM
Domestic Entity believe that it will, incur debts beyond its ability to pay
such debts as they mature (taking into account the timing and amounts of cash
to be received by such JLM Domestic Entity, and of amounts to be payable on or
in respect of debt of such JLM Domestic Entity). The cash available to such JLM
Domestic Entity after taking into account all other anticipated uses of the
cash of such JLM Domestic Entity, is anticipated to be sufficient to pay all
such amounts on or in respect of debt of such JLM Domestic Entity when such
amounts are required to be paid.

23
<PAGE> 29

(d) No JLM Domestic Entity believes that final judgments against it
in actions for money damages will be rendered at a time when, or in an amount
such that, such JLM Domestic Entity will be unable to satisfy any such judgments
promptly in accordance with their terms (taking into account the maximum
reasonable amount of such judgments might be rendered). The cash available to
each JLM Domestic Entity after taking into account all other anticipated uses
of the cash of such JLM Domestic Entity (including the payments on or in
respect of debt referred to in paragraph (c) of the Section 5.18), is
anticipated to be sufficient to pay all such judgments promptly in
accordance with their terms.

Section 5.19. Security Documents. The Security Documents are effective
to create in favor of the Bank a legal, valid and enforceable Lien on and
security interest in all right, title and interest of each Obligor in the
Collateral securing the obligations of the Obligors under this Agreement, the
Notes, the Letters of Credit and the other Facility Documents. The Bank has a
fully perfected and continuing first priority Lien on and security interest in
such Collateral described in the Security Documents, free from all Liens other
than Liens permitted under Section 7.03.

ARTICLE 6. AFFIRMATIVE COVENANTS.

So long as any Note shall remain unpaid, any Letter of Credit Obligation
shall remain outstanding or the Bank shall have any revolving Credit Commitment
under this Agreement, JLM Industries shall:

Section 6.01. Maintenance of Existence. Preserve and maintain, and
cause each of its Subsidiaries to preserve and maintain, its corporate
existence and good standing in the jurisdiction of its incorporation, and
qualify and remain qualified as a foreign corporation in each jurisdiction in
which such qualification is required.

Section 6.02. Conduct of Business. Continue, and cause each of its
Subsidiaries to continue, to engage in a business of the same general type as
conducted by it on the date of this Agreement.

Section 6.03. Maintenance of Properties. Maintain, keep and preserve,
and cause each of its subsidiaries to maintain, keep and preserve, all of its
Property necessary or useful in the proper conduct of its business in good
working order and condition, ordinary wear and tear excepted.

Section 6.04. Maintenance of Records. Keep, and cause each of its
subsidiaries to keep, adequate records and books of account, in which complete
entries will be made in accordance with GAAP, reflecting all financial
transactions of the JLM Entities.

<PAGE> 30

Section 6.05. Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in the same or a similar business and
similarly situated, which insurance may provide for reasonable deductibility
from coverage thereof.

Section 6.06. Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, in all respects with all applicable laws, rules,
regulations and orders, such compliance to include, without limitation, paying
before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its Property unless contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established in accordance with GAAP.

Section 6.07. Right of Inspection. At any reasonable time and from time
to time, permit the Bank or any agent or representative thereof, to examine and
make copies and abstracts from the records and books of account of, and visit
the Property of, any JLM Entity, and to discuss the affairs, finances and
accounts of such JLM Entity with any or their respective officers and directors
and independent accountants.

Section 6.08. Reporting Requirements. Furnish directly to the Bank:

(a) as soon as available and in any event within 90 days after the
end of each fiscal year of the JLM entities, the consolidated and consolidating
balance sheets of the JLM Entities, as of the end of such fiscal year and the
consolidated and consolidating income statements and statements of cash flows
and changes in stockholders' equity of the JLM Entities for such fiscal year,
all in reasonable detail and stating in comparative form the respective
consolidated and consolidating figures for the corresponding date and period in
the prior fiscal year and all prepared in accordance with GAAP and as to the
consolidated and consolidating statements accompanied by an opinion thereon
acceptable to the Bank by Deloitte & Touche or other independent accountants of
national standing selected by the JLM Entities;

(b) as soon as available and in any event within 45 days after the
end of each month of each fiscal year of the JLM Entities, consolidated and
consolidating balance sheets of the JLM Entities as of the end of such month
and consolidated and consolidating income statements and statements of cash
flows and changes in stockholders' equity of the JLM Entities for the period
commencing at the end of the previous fiscal year and ending with the end of
such month, all in reasonable detail and stating in comparative form the
respective consolidated and consolidating figures for the corresponding date
and period in the previous fiscal year and all prepared in accordance with
GAAP and certified

<PAGE> 31

by the chief financial officer of the JLM Entities (subject to year-end
adjustments);

(c) simultaneously with the delivery of the financial statements
referred to above, a Compliance Certificate of the chief financial officer of
the JLM Industries (i) certifying that to the best of his knowledge no Default
or Event of Default has occurred and is continuing or, if a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof
and the action which is proposed to be taken with respect thereto, and (ii) at
the end of each fiscal quarter with computations demonstrating compliance with
the covenants contained in article 8;

(d) simultaneously with the delivery of the annual financial
statements referred to in Section 6.08(a), a certificate of the independent
public accountants who audited such statements to the effect that, in making
the examination necessary for the audits of such statements, they have obtained
no knowledge of any condition or event which constitutes a Default or Event of
Default, or if such accountants shall have obtained knowledge of any such
condition or event, specifying in such certificate each such condition or event
of which they have knowledge and the nature and status thereof;

(e) as soon as available and in any event within 30 days after the end
of each of fiscal month of the JLM Entities, a schedule showing the amounts and
aging of all Receivables of the JLM Entities as of the end of such month
together with a reconciliation of all Receivables and together with a schedule
showing the quantity, the amounts and the value of Inventory of the JLM
Entities existing as of the end of such month;

(f) promptly after the commencement thereof, notice of all actions,
suits, and proceedings before any court or governmental department, commission,
board, bureau, agency, or instrumentality, domestic or foreign, affecting any
JLM Entity;

(g) as soon as possible and in any event within 10 days after becoming
aware of or having reason to become aware of the occurrence of each Default or
Event of Default a written notice setting forth the details of such Default or
Event of Default and the action which is proposed to be taken by the JLM
Entities with respect thereto;

(h) as soon as possible and in any event within ten days after any JLM
Entity knows or has reason to know that any of the events or conditions
specified below with respect to any Plan or Multiemployer Plan have occurred or
exist, a statement signed by a senior financial officer of such JLM Entity
setting forth details respecting such event or condition and the action, if
any, which such JLM Entity or an ERISA Affiliate proposes to take with respect
thereto (and a copy of any report or notice required to be filed with or given
to PBGC by such by such JLM Entity or an ERISA Affiliate with respect to such
event or condition):

<PAGE> 32
(i) any reportable event, as defined in Section 4043(b) of
ERISA, with respect to a Plan, as to which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event (provided that a failure to meet the minimum
funding standard of Section 412 of the Code or Section 302 of ERISA including,
without limitation, the failure to make on or before its due date a required
installment under Section 412(m) of the Code or Section 302(e) of ERISA, shall
be a reportable event regardless of the issuance of any waivers in accordance
with Section 412(d) of the Code) and any request for a waiver under Section
412(d) of the Code for any Plan;

(ii) the distribution under Section 4041 of ERISA of a notice
of intent to terminate any Plan or any action taken by such JLM Entity or an
ERISA Affiliate to terminate any Plan;

(iii) the institution by PBGC of proceedings under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan, or the receipt by such JLM Entity or any ERISA Affiliate of a notice
from a Multiemployer Plan that such action has been taken by PBGC with respect
to such Multiemployer Plan;

(iv) the complete or partial withdrawal from a Multiemployer
Plan by such JLM Entity or any ERISA Affiliate that results in liability under
Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary
liability as a result of a purchaser default) or the receipt of such JLM Entity
or any ERISA Affiliate of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that
it intends to terminate or has terminated under section 4041A of ERISA;

(v) the institution of a proceeding by a fiduciary or any
Multiemployer Plan against such JLM Entity or any ERISA Affiliate to enforce
Section 515 of ERISA, which proceeding is not dismissed within 30 days;

(vi) the adoption of an amendment to any Plan that pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA would result in the loss
of tax-exempt status of the trust of which such Plan is a part if such JLM
Entity or an ERISA Affiliate fails to timely provide security to the Plan in
accordance with the provisions of said Sections;

(vii) any event or circumstance exists which may reasonably be
expected to constitute grounds for such JLM Entity or any ERISA Affiliate to
incur liability under Title IV of ERISA or under Sections 412(c)(11) or 412(n)
of the Code with respect to any Plan; and

(viii) the Unfunded Benefit Liabilities of one or more Plans
increase after the date of this Agreement in an amount

<PAGE> 33

which is material in relation to the financial condition of the JLM Entities;
provided, however, that such increase shall not be deemed to be material so long
as it does not exceed during any consecutive 3 year period $100,000;

(i) promptly after the request of the Bank, copies of each annual
report filed pursuant to Section 104 of ERISA with respect to each Plan
(including, to the extent required by Section 104 of ERISA, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information referred to in Section 103) and each
annual report filed with respect to each Plan under Section 4065 of ERISA;
provided, however, that in the case of a Multiemployer Plan, such annual reports
shall be furnished only if they are available to such JLM Entity or an ERISA
Affiliate;

(j) promptly after the sending or filing thereof, copies of all proxy
statements, financial statements and reports which any JLM Entity sends to its
stockholders, and copies of all regular, periodic and special reports, and all
registration statements which such JLM Entity files with the Securities and
Exchange Commission or any Governmental Authority which may be substituted
therefor, or with any national securities exchange;

(k) promptly after becoming aware of the existence of any violation
or alleged violation in any material respect of any Environmental Law by any JLM
Entity, prompt written notice of and a description of the nature of such
violation or alleged violation, what action such JLM Entity is taking or
proposes to take with respect thereto and, when-known, any action taken, or
proposed to be taken, by any Governmental Authority with respect thereto;

(1) promptly after the commencement thereof or promptly after any JLM
Entity knows of the commencement or threat thereof, notice of any Forfeiture
Proceeding; and

(m) such other information respecting the condition or operations,
financial or otherwise, of any JLM Entity as the Bank may from time to time
reasonably request.

Section 6.03 Additional Subsidiary Guarantors. Cause each of its
Subsidiaries acquired or formed after the date hereof with funds advanced by the
Bank under this Agreement to become an obligor hereunder pursuant to an
assumption agreement in form and substance satisfactory to the Bank, and shall
deliver such proof of corporate action, incumbency of officers, opinions of
counsel and other documents as is consistent with those delivered by the JLM
Domestic Entities pursuant to Article 4 hereof upon the Closing Date or as the
Bank shall have reasonably requested.

ARTICLE 7. NEGATIVE COVENANTS.

So long as any Note shall remain unpaid, any Letter of Credit Obligation
shall remain outstanding or the Bank shall have any

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<PAGE> 34

Revolving Credit commitment under this Agreement, JLM Industries shall not:

Section 7 01. Debt. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist, any Debt,
except:

(a) Debt of the JLM Domestic Entities under this Agreement, the Notes,
the Letters of Credit and the other Facility Documents;

(b) Debt described in Schedule II;

(c) Debt of any Obligor to any other Obligor so long as (i)if such
debt is secured, such Debt is evidenced by a promissory note and such note
together with such security is pledged as collateral for the Loans, the Letter
of Credit Obligations and the other obligations under the Facility Documents and
(ii) if such Debt is evidenced by a promissory note or other Instrument, such
note or other instrument is pledged to the Bank as collateral for the Loans, the
Letter of Credit Obligations and the other obligations under the Facility
Documents;

(d) accounts payable to trade creditors for goods or services and
current operating liabilities (other than for borrowed money), in each case
incurred in the ordinry course of business and paid within prescribed time
limits that are in the ordinary course of business, unless contested in good
faith and by appropriate proceedings; or

(e) Debt of any JLM Entity secured by Purchase Money Liens permitted
by Section 7.03(j) provided that the aggregate principal amount of all such Debt
for all JLM Entities does not exceed at any time $100,000.

Section 7.02. Guaranties. Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Guaranty, except Guaranties by endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of business.

Section 7.03. Liens. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien,
upon or with respect to any of its Property, now owned or hereafter acquired,
except:

(a) Liens in favor of the Bank securing the Loans and the Letter of
Credit obligations hereunder;

(b) Liens for taxes or assessments or other government charges or
levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained in accordance with GAAP;

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<PAGE> 35
(c) Liens imposed by law, such as mechanic's materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than 60 days, or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established in accordance with GAAP;

(d) Liens under workmen's compensation, unemployment
insurance, social security or other similar legislation (other than ERISA);

(e) Liens, deposits or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment of money),
leases (permitted under the terms of this Agreement), public or statutory
obligations, surety, stay, appeal, indemnity, performance or other similar
bonds, or other similar obligations arising in the ordinary course of business;

(f) judgment and other similar Liens arising in connection
with court proceedings which do not exceed $100,000 in the aggregate or where
the execution or other enforcement of such Lien is effectively stayed and the
claims secured thereby are being actively contested in good faith and by
appropriate proceedings;

(g) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use and enjoyment by any JLM Entity of the Property or assets
encumbered thereby in the normal course of its business or materially impair
the value of the Property subject thereto;

(h) Liens securing obligations of any Obligor to any other
Obligor;

(i) Liens described on Schedule III;

(j) Purchase Money Liens; provided that:

(i) any Property subject to any of the foregoing is
acquired by any JLM Entity in the ordinary course of its business and the Lien
on any such Property is created contemporaneously with such acquisition;

(ii) the obligation secured by any Lien so created,
assumed or existing shall not exceed 100% of the lesser of cost or fair market
value as of the time of acquisition of the Property covered thereby to such JLM
Entity acquiring the same;

(iii) each such Lien shall attach only to the Property
so acquired and fixed improvements thereon; and

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<PAGE> 36
(iv) the obligations secured by such Lien are permitted
by the provisions of Section 7.01(h) and the related expenditure is permitted
under Section 8.03.

Section 7.04. Leases. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
obligation as lessee for the rental or hire of any real or personal Property,
except:

(a) leases existing on the date of this Agreement and any
extensions or renewals thereof;

(b) operating leases (other than Capital Leases) which do
not in the aggregate require the JLM Entities on a consolidated basis to make
payments (excluding taxes, insurance, maintenance and similar expense which any
Consolidated Entity is required to pay under the terms of any lease) in any
fiscal year of the JLM Entities in excess of $1,000,000;

(d) Capital Leases permitted by Section 7.01 and Section
7.03.

Section 7.05. Investments. Make, or permit any of its Subsidiaries to
make, any loan or advance to any Person or purchase or otherwise acquire, any
capital stock, assets, obligations or other securities of, make any capital
contribution to, or otherwise invest in, or acquire any interest in, any
Person, except:

(a) direct obligations of the United States of America or
any agency thereof with maturities of one year or less from the date of
acquisition;

(b) commercial paper of a domestic issuer rated at least
"A-1" by Standard & Poor's Corporation or "P-1" by Moody's Investors Service,
Inc.;

(c) time deposits or certificates of deposit with maturities
of one year or less from the date of acquisition issued by any commercial bank
operating within the United States of America having capital and surplus in
excess of $50,000,000;

(d) money market or mutual funds whose sole investments are
comprised of investments permitted under the foregoing clauses (a) through (c);

(e) for stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing to any
JLM Entity;

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<PAGE> 37
(f) Property to be used or useful in the ordinary course of
business of the JLM Entities; or

(g) Subsidiaries, provided that the aggregate investment in
all Subsidiaries during the term of this Agreement shall not exceed $750,000
and further provided that JLM Industries and\or its Subsidiaries shall at all
times own, directly and indirectly, 100% of the securities or other ownership
interests having ordinary voting power (absolutely and contingently) for the
election of directors or other persons performing similar functions with
respect to such Subsidiary.

Section 7.06. Dividends. Declare or pay, or permit any of its
Subsidiaries to declare or pay, any dividends, purchase, redeem, retire or
otherwise acquire for value, or permit any such Subsidiary to purchase, redeem,
retire or otherwise acquire for value, any of its capital stock now or
hereafter outstanding, or make, or permit any such Subsidiary to make, any
distribution of assets to its stockholders as such whether in cash, assets or
in obligations of the JLM Entities, or allocate or otherwise set apart, or
permit any such Subsidiary to allocate or otherwise set apart, any sum for the
payment of any dividend or distribution on, or for the purchase, redemption or
retirement of any shares of its capital stock, or make, or permit any such
Subsidiary to make, any other distribution by reduction of capital or otherwise
in respect of any shares of its capital stock, except that:

(a) JLM Industries may declare and deliver dividends and make
distributions payable solely in its common stock;

(b) JLM Industries may purchase or otherwise acquire shares
of its capital stock by exchange for or out of the proceeds received from a
substantially concurrent issue of new shares of its capital stock; and

SECTION 7.07. Sale of Property. Sell, lease, assign, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease, assign,
transfer or otherwise dispose of, any of its now owned or hereafter acquired
Property (including, without limitation, shares of stock and indebtedness,
receivables and leasehold interests); except:

(a) for Inventory disposed of in the ordinary course of
business;

(b) the sale or other disposition of Property no longer used
or useful in the conduct of its business; or

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<PAGE> 38
Section 7.08. Stock of Subsidiaries. Etc. Sell or otherwise dispose
of any shares of capital stock of any of its Subsidiaries, or permit any such
Subsidiary to issue any additional shares of its capital stock, except
directors, qualifying shares.

Section 7.09. Transactions with Affiliates. Enter, or permit any
Subsidiary enter, into any transaction, including, without limitation, the
purchase, sale or exchange of Property or the rendering of any service, with
any Affiliate, including, without limitation, the purchase, sale or exchange of
Property or the rendering of any service, with any Affiliate, except in the
ordinary course of and pursuant to the reasonable requirements of the JLM
Industries's or such Subsidiary's business and upon fair and reasonable terms
no less favorable to JLM Industries's or such Subsidiary than would obtain in a
comparable arm's length transaction with a Person not an Affiliate.

Section 7.10. Mergers, Etc. Merge or consolidate with, or sell,
assign, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to, any Person, or acquire all or substantially
all of the assets or the business of any Person (or enter into any agreement to
do any of the foregoing), or permit any of its Subsidiaries to do so, except
that any obligor may merge into or consolidate with or transfer assets to any
other Obligor.

Section 7.11. Acquisitions. Make, or permit any of its Subsidiaries,
to make any Acquisition without the prior written approval of the Bank.

Section 7.12. No Activities Leading to Forfeiture. Engage in or
propose to be engaged in, or permit any of its Subsidiaries to engage in or
propose to be engaged in, the conduct of any business or activity which could
result in a Forfeiture Proceeding.

Section 7.13. Restrictions. Enter into, or suffer to exist, or
permit any of its Subsidiaries to enter into, or suffer to exist, any agreement
with any Person other than the Bank that (a) prohibits, requires the consent of
such Person for or limits the ability of (i) any JLM Entity to pay dividends or
make other distributions or pay Debt owed to any other JLM Entity, make loans
or advances to any other JLM Entity or transfer any of its Property which
constitutes Collateral to any other JLM Entity, (ii) any JLM Entity to create,
incur, assume or suffer to exist any Lien upon any of its Property or revenues
which constitutes Collateral, whether now owned or hereafter acquired, or (iii)
any Obligor to enter into any modification or supplement of the Facility
Documents; or (b) contains financial covenants which, taken as a whole, are
more restrictive on the JLM Entities than the financial covenants contained in
Article 8.

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<PAGE> 39
ARTICLE 8. FINANCIAL COVENANTS.

So long as any Note shall remain unpaid, any Letter of Credit
Obligation shall remain outstanding or the Bank shall have any Revolving Credit
Commitment under this Agreement:

Section 8.01. Net Income. (a) JLM Industries shall maintain (i) as
determined as of the end of each fiscal quarter of the JLM Entities,
Consolidated Net Income of not less than $300,000 for the two most recently
ended fiscal quarters and (ii) as determined as of the end of each fiscal year
of the JLM Entities, (A) Consolidated Net Income of not less than $600,000 for
the fiscal years ending on December 31, 1994 and December 31, 1995 and (B)
Consolidated Net Income of not less than $750,000 for each fiscal year ending
thereafter.

(b) JLM Marketing shall maintain (i) as determined as of the end of
each fiscal quarter of the JLM Entities, net income of not less than $150,000
for the two most recently ended fiscal quarters and (ii) as determined as of
the end of each fiscal year of the JLM Entities, (A) net income of not less
than $300,000 for the fiscal years ending on December 31, 1994 and December 31,
1995 and (B) net income of not less than $450,000 for each fiscal year ending
thereafter.

Section 8.02. Minimum Tangible Net Worth. JLM Industries shall
maintain, as determined as of the end of each fiscal year of the JLM Entities,
Consolidated Tangible Net Worth of not less than (a) $6,000,000 on the Closing
Date, (b) $6,600,000 at December 31, 1994, (c) $7,200,000 at December 31, 1995
and (d) at each December 31 thereafter, $750,000 more than at December 31 of
the previous year.

SECTION 8.03. Leverage Ratio. JLM Industries shall maintain, as
determined as of the end of each fiscal quarter of the JLM Entities, a Leverage
Ratio of not greater than 6.00 to 1.00.

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<PAGE> 40

Section 8.04. Cash Flow Ratio. (a) JLM Terminals shall maintain, as
determined as of the end of each fiscal year of the JLM Entities, a
Consolidated Cash Flow Ratio of not less than (i) 1.50 to 1.00 for the fiscal
year ending on December 31, 1994 and (ii) 1.25 to 1.00 for each fiscal year
ending thereafter.

(b) JLM Industries shall maintain, as determined as of the end of
each fiscal year of the JLM Entities, a Cash Flow Ratio of not less than 1.50
to 1.00 for each fiscal year ending on or after the Closing Date.

ARTICLE 9. EVENTS OF DEFAULT.

Section 9.01. Events of Default. Any of the following events shall
be an "Event of Default":

(a) any Obligor shall: (i) fail to pay the principal of any Note when
due; (ii) fail to pay any Reimbursement Obligation when due; or (iii) fail to
pay interest on any Note or any fee or other amount due hereunder or under any
other Facility Document when due;

(b) any representation or warranty made or deemed made by any JLM
Entity in this Agreement or in any other Facility Document or which is
contained in any certificate, document, opinion, financial or other statement
furnished at any time under or in connection with any Facility Document shall
prove to have been incorrect in any material respect on or as of the date made
or deemed made;

(c) any JLM Domestic Entity shall: (i) fail to perform or observe any
term, covenant or agreement contained in Section 2.03 or Articles 7 or 8; or
(ii) fail to perform or observe any term, covenant or agreement on its part to
be performed or observed (other than the obligations specifically referred to
elsewhere in this Section 9.01) in any Facility Document and such failure shall
continue for 30 consecutive days;

(d) any JLM Entity shall: (i) fail to pay any other indebtedness when
due, including but not limited to material indebtedness for borrowed money
(excluding the payment obligations described in (a) above), or any interest or
premium thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise); or (ii) fail to perform or observe any
term, covenant or condition on its part to be performed or observed under any
agreement or instrument relating to any such indebtedness, when required to be
performed or observed, if the effect of such failure to perform or observe is
to accelerate, or to permit the acceleration of, after the giving of notice or
passage of time, or both, the maturity of such indebtedness, whether or not
such failure to perform or observe shall be waived by the holder of such
indebtedness; or any such indebtedness shall be declared to be due and payable,
or required to be prepaid (other

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<PAGE> 41
than by a regularly scheduled required prepayment), prior to the stated
maturity thereof;

(e) any JLM Entity: (i) shall generally not, or be unable to, or shall
admit in writing its inability to, pay its debts as such debts become due; or
(ii) shall make an assignment for the benefit of creditors, petition or apply
to any tribunal for the appointment of a custodian, receiver or trustee for it
or a substantial part of its assets; or (iii) shall commence any proceeding
under any bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect; or (iv) shall have had any such petition or application
filed or any such proceeding shall have been commenced, against it, in which an
adjudication or appointment is made or order for relief is entered, or which
petition, application or proceeding remains undismissed for a period of 30 days
or more; or shall be the subject of any proceeding under which its assets may
be subject to seizure, forfeiture or divestiture (other than a proceeding in
respect of a Lien permitted under Section 7.03(b)); or (v) by any act or
omission shall indicate its consent to, approval of or acquiescence in any such
petition, application or proceeding or order for relief or the appointment of a
custodian, receiver or trustee for all or any substantial part of its Property;
or (vi) shall suffer any such custodianship, receivership or trusteeship to
continue undischarged for a period of 30 days or more;

(f) one or more final judgments, decrees or orders for the payment of
money in excess of $100,000 in the aggregate shall be rendered against any JLM
Entity and such judgments, decrees or orders shall continue unsatisfied and in
effect for a period of 30 consecutive days without being vacated, discharged,
satisfied or stayed or bonded pending appeal;

(g) any event or condition shall occur or exist with respect to any
Plan or Multiemployer Plan concerning which any JLM Entity is under an
obligation to furnish a report to the Bank in accordance with Section 6.08(h)
hereof and as a result of such event or condition, together with all other such
events or conditions, such JLM Entity has incurred or in the opinion of the
Banks is reasonably likely to incur a liability to a Plan, a Multiemployer
Plan, the PBGC, or a Section 4042 Trustee (or any combination of the foregoing)
which is material in relation to the financial position of the JLM Entities;
provided, however, that any such amount shall not be deemed to be material so
long as all such amounts do not exceed $100,000 in the aggregate during the
term of this Agreement;

(h) The Unfunded Benefit Liabilities of one or more Plans have
increased after the date of this Agreement in an amount which is material (as
specified in Section 6.08(g) hereof);

(i) (i) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the

36
<PAGE> 42
meaning of Rules 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 25% or more of the outstanding shares of
voting stock of JLM Industries; and (ii) during any period of 12 consecutive
months, commencing before or after the date of this Agreement, individuals who
at the beginning of such 12-month period were directors of the JLM Industries
cease for any reason to constitute a majority of the board of directors of JLM
Industries;

(j) any Forfeiture Proceeding shall have been commenced or any JLM
Entity shall have given the Bank written notice of the commencement of any
Forfeiture Proceeding as provided in Section 6.08(h); or

(k) any of the Security Documents shall at any time after its
execution and delivery and for any reason cease: (i) to create a valid and
perfected first priority security interest in and to the Collateral; or (ii) to
be in full force and effect or shall be declared null and void, or the validity
or enforceability thereof shall be contested by any Obligor or any Obligor
shall deny it has any further liability or obligation under the Security
Documents or any Obligor shall fail to perform any of its obligations
thereunder.

Section 9.02. Remedies. If any Event of Default shall occur and be
continuing, the Bank may, by written notice to the JLM Domestic Entities, (a)
declare the Revolving Credit Commitment to be terminated, whereupon the same
shall forthwith terminate and so shall the obligations of the Bank to issue any
Letter of Credit, (b) declare the outstanding principal of the Notes, all
interest thereon and all other amounts payable under this Agreement, the Notes
and the other Facility Documents to be forthwith due and payable, whereupon the
Notes, all such interest and all such amounts shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the JLM Domestic Entities
and/or (c) direct JLM Marketing to pay to the Bank an amount, to be held as
cash security in the cash collateral account held by the Bank under Section
3.07, equal to the Letter of Credit Obligations then outstanding; provided
that, in the case of an Event of Default referred to in Section 9.01(e) or
Section 9.01(i)(i) above, the Revolving Credit Commitment shall be immediately
terminated, and the Notes, the Letter of Credit Obligations, all interest
thereon and all other amounts payable under this Agreement shall be immediately
due and payable without notice, presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the JLM
Domestic Entities.

ARTICLE 10. GUARANTY OF JLM DOMESTIC ENTITIES.

Section 10.01. Guarantied Obligations. Each of the JLM Domestic
Entities, jointly and severally, in consideration of the execution and delivery
of this Agreement by the Bank, hereby irrevocably and unconditionally
guarantees to the Bank, as and for

37
<PAGE> 43
such JLM Domestic Entity's own debt, until final payment has been made:

(a) the due and punctual payment of the principal of, and interest on,
the Notes and the Letter of Credit Obligations at any time outstanding and the
due and punctual payment of all other amounts payable, and all other
indebtedness owing, by each of the Obligors under each of the Facility
Documents to which it is a party (all such obligations so guarantied are herein
collectively referred to as the "Guarantied Obligations"), in each case when
and as the same shall become due and payable, whether at maturity, pursuant to
mandatory or optional prepayment, by acceleration or otherwise, all in
accordance with the terms and provisions hereof and thereof, it being the
intent of the JLM Domestic Entities that the guaranty set forth in this Section
10.01 (the "Unconditional Guaranty") shall be a guaranty of payment and not a
guaranty of collection; and

(b) the punctual and faithful performance, keeping, observance, and
fulfillment by each of the Obligors of all duties, agreements, covenants and
obligations of such Obligor contained in each of the Facility Documents to
which it is a party.

Section 10.02. Performance Under This Agreement. In the event any
Obligor fails to make, on or before the due date thereof, any payment of the
principal of, or interest on, the Notes, the Letter of Credit Obligations or of
any other amounts payable, or any other indebtedness owing, under any of the
Facility Documents or if any Obliger shall fail to perform, keep, observe, or
fulfill any other obligation referred to in clause (a) or clause (b) of Section
10.01 hereof in the manner provided in the Notes, the Letters of Credit or in
any of the other Facility Documents, the JLM Domestic Entities shall cause
forthwith to be paid the moneys, or to be performed, kept, observed, or
fulfilled each of such obligations, in respect of which such failure has
occurred.

Section 10.03. Waivers. To the fullest extent permitted by law, each
of the JLM Domestic Entities does hereby waive:

(a) notice of acceptance of the Unconditional Guaranty;

(b) notice of any borrowings under this Agreement, or the creation,
existence or acquisition of any of the Guarantied Obligations, subject to such
JLM Domestic Entity's right to make inquiry of the Bank to ascertain the amount
of the Guarantied Obligations at any reasonable time;

(c) notice of the amount of the Guarantied Obligations, subject to
such JLM Domestic Entity's right to make inquiry of the Bank to ascertain the
amount of the Guarantied Obligations at any reasonable time;

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<PAGE> 44

(d) notice of adverse change in the financial condition of any other
Obligor or any other fact that might increase such JLM Domestic Entity's risk
hereunder;

(e) notice of presentment for payment, demand, protest, and notice
thereof as to the Notes, the Letters of Credit or any other instrument;

(f) notice of any Default or Event of Default;

(g) all other notices and demands to which such JLM Domestic Entity
might otherwise be entitled (except if such notice or demand is specifically
otherwise required to be given to such JLM Domestic Entity hereunder or under
the other Facility Documents);

(h) the right by statute or otherwise to require the Bank to institute
suit against any other Obligor or to exhaust the rights and remedies of the
Bank against any other Obligor, such JLM Domestic Entity being bound to the
payment of each and al' Guarantied Obligations, whether now existing or
hereafter accruing, as fully as if such Guarantied Obligations were directly
owing to the Bank by such JLM Domestic Entity;

(i) any defense arising by reason of any disability or other defense
(other than the defense that the Guarantied Obligations shall have been fully
and finally performed and indefeasibly paid) of any other Obligor or by reason
of the cessation from any cause whatsoever of the liability of any other
Obligor in respect thereof;

(j) any stay (except in connection with a pending appeal), valuation,
appraisal, redemption or extension law now or at any time hereafter in force
which, but for this waiver, might be applicable to any sale of Property of such
JLM Domestic Entity made under any judgment, order or decree based on this
Agreement, and such JLM Domestic Entity covenants that it will not at any time
insist upon or plead, or in any manner claim or take the benefit or advantage
of such law; and

(k) any claim of any nature arising out of any right of indemnity,
contribution, reimbursement or any similar right, or any claim of subrogation
arising, in respect of any payment made under the Unconditional Guaranty or in
connection with the Unconditional Guaranty, against any other Obligor or the
estate of such other Obligor (including, without limitation, Liens on the
Property of such other Obligor or the estate of such other Obligor), in each
case if, but only if, and for so long as, such other Obligor is the subject of
any proceeding brought under the Federal Bankruptcy Code or under the
applicable bankruptcy laws of any appropriate jurisdiction, whether now or
hereafter in effect, and further agrees that such JLM Domestic Entity will not
file any claims against such other Obligor or the estate of such other Obligor
in the course of any such proceeding in respect of the rights referred

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<PAGE> 45

to in this clause (k) and further agrees that the Bank may specifically enforce
the provisions of this clause (k)

Until all of the Guarantied Obligations shall have been paid in full, none of
the JLM Domestic Entities shall have any right of subrogation, reimbursement,
or indemnity whatsoever in respect thereof and no right of recourse to or with
respect to any assets or Property of any other Obligor. Nothing shall discharge
or satisfy the obligations of the JLM Domestic Entities hereunder except the
full and final performance and indefeasible payment of the Guarantied
Obligations by the JLM Domestic Entities, upon which the Bank agrees to
transfer and assign its interest in the Notes to the JLM Domestic Entities
without recourse, representation or warranty of any kind (other than that the
Bank owns such Notes and that such Notes are free of Liens created by such
holder). All of the Guarantied Obligations shall in the manner and subject to
the limitations provided herein for the acceleration of, the Notes and the
Letter of Credit Obligations, forthwith become due and payable without notice.

Section 10.04. Releases. Each of the JLM Domestic Entities consents
and agrees that, without notice to or by such JLM Domestic Entity and without
affecting or impairing the obligations of such JLM Domestic Entity hereunder,
the Bank, in the manner provided herein, by action or inaction, may:

(a) compromise or settle, extend the period of duration or the time
for the payment, or discharge the performance of, or may refuse to, or
otherwise not, enforce, or may, by action or inaction, release all or any one
or more parties to, any one or more of the Notes, the Letters of Credit or the
other Facility Documents;

(b) grant other indulgences to any other Obligor in respect thereof;

(c) amend or modify in any manner and at any time (or from time to
time) any one or more of the Notes, the Letters of Credit and the other
Facility Documents in accordance with Section 12.01 or otherwise;

(d) release or substitute any one or more of the endorsers or
guarantors of the Guaranteed Obligations whether parties hereto or not; and

(e) exchange, enforce, waive, or release, by action or inaction, any
security for the Guarantied Obligations (including, without limitation, any of
the collateral therefor) or any other guaranty of any of the Notes or the Letter
of Credit Obligations.

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<PAGE> 46

Section 10.05. Marshaling. Each of the JLM Domestic Entities consents
and agrees that:

(a) the Bank shall be under no obligation to marshal any assets in
favor of such JLM Domestic Entity or against or in payment of any or all of the
Guarantied Obligations; and

(b) to the extent any other Obligor makes a payment or payments to the
Bank, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, or required,
for any of the foregoing reasons or for any other reason, to be repaid or paid
over to a custodian, trustee, receiver, or any other party under any bankruptcy
law, common law, or equitable cause, then to the extent of such payment or
repayment, the obligation or part thereof intended to be satisfied thereby
shall be revived and continued in full force and effect as if said payment or
payments had not been made and such JLM Domestic Entity shall be primarily
liable for such obligation.

Section 10.06. Liability. Each of the JLM Domestic Entities agrees
that the liability of such JLM Domestic Entity in respect of this Article 10
shall not be contingent upon the exercise or enforcement by the Bank of
whatever remedies the Bank may have against any other Obligor or the
enforcement of any Lien or realization upon any security the Bank may at any
time possess.

Section 10.07. Primary Obligation. The Unconditional Guaranty set
forth in this Article 10 is a primary and original obligation of each of the
JLM Domestic Entities and an absolute, unconditional, continuing and
irrevocable guaranty of payment and performance and shall remain in full force
and effect until the full and final payment of the Guarantied Obligations
without respect to future changes in conditions, including change of law or any
invalidity or irregularity with respect to the issuance or assumption of any
obligations (including, without limitation, the Notes and the Letter of Credit
Obligations) of or by any other Obligor, or with respect to the execution and
delivery of any agreement (including, without limitation, the Notes and the
other Facility Documents) of any other Obligor.

Section 10.08 Election to Perform Obligations. Any election by any of
the JLM Domestic Entities to pay or otherwise perform any of the obligations of
any other Obligor under the Notes or under any of the other Facility Documents,
whether pursuant to this Article 10 or otherwise, shall not release such other
Obligor from such obligations or any of its other obligations under the Notes
or under any of the other Facility Documents.

Section 10.09. No Election. The Bank shall have the right to seek
recourse against any one or more of the JLM Domestic Entities to the fullest
extent provided for herein for such JLM Domestic Entity's obligations under
this Agreement (including, without limitation, this Article 10) in respect of
the Notes. No election

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<PAGE> 47

to proceed in one form of action or proceeding, or against any party, or on any
obligation, shall constitute a waiver of the Bank's right to proceed in any
other form of action or proceeding or against other parties unless such holder
has expressly waived such right in writing. Specifically, but without limiting
the generality of the foregoing, no action or proceeding by the Bank against
any other Obligor under any document or instrument evidencing obligations of
such other Obligor to the Bank shall serve to diminish the liability of any of
the JLM Domestic Entities under this Agreement (including, without limitation,
this Article 10) except to the extent that the Bank finally and unconditionally
shall have realized payment by such action or proceeding, notwithstanding the
effect of any such action or proceeding upon any JLM Domestic Entity's right of
subrogation against any other Obligor.

Section 10.10. Severability. Subject to Article 9 hereof and applicable
law, each of the rights and remedies granted under this Article 10 to the Bank
may be exercised by the Bank without notice by the Bank to, or the consent of
or any other action by, the Bank.

Section 10.11. Other Enforcement Rights. The Bank may proceed, as
provided in Article 10 hereof, to protect and enforce the Unconditional
Guaranty by suit or suits or proceedings in equity, at law or in bankruptcy,
and whether for the specific performance of any covenant or agreement contained
herein (including, without limitation, in this Article 10) or in execution or
aid of any power herein granted; or for the recovery of judgment for the
obligations hereby guarantied or for the enforcement of any other proper, legal
or equitable remedy available under applicable law. The Bank shall have, to the
fullest extent permitted by law and this Agreement, a right of set-off against,
any and all credits and any and all other Property of any JLM Domestic Entity,
now or at any time whatsoever with, or in the possession of, such holder, or
anyone acting for such holder, as security for any and all obligations of the
JLM Domestic Entities hereunder and such Lien shall be deemed permitted for all
purposes under Article 7 hereof.

Section 10.12. Delay or Omission: No Waiver. No course of dealing on
the part of the Bank and no delay or failure on the part of any such Person to
exercise any right hereunder (including, without limitation, this Article 10)
shall impair such right or operate as a waiver of such right or otherwise
prejudice such Person's rights, powers and remedies hereunder. Every right and
remedy given by the Unconditional Guaranty or by law to the Bank may be
exercised from time to time as often as may be deemed expedient by such Person.

Section 10.13. Restoration of Rights and Remedies. If the Bank shall
have instituted any proceeding to enforce any right or remedy under the
Unconditional Guaranty, under any Note held by the Bank, or under any Security
Document, and such proceeding shall have been discontinued or abandoned for any
reason, or shall have been determined adversely to the Bank, then and in every
such case

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<PAGE> 48

the Bank and each JLM Domestic Entity shall, except as may be limited or
affected by any determination in such proceeding, be restored severally and
respectively to its respective former positions hereunder and thereunder, and
thereafter, subject as aforesaid, the rights and remedies of the Bank shall
continue as though no such proceeding had been instituted.

Section 10.14. Cumulative Remedies. No remedy under this Agreement
(including, without limitation, this Article 10), the Notes or any of the other
Facility Documents is intended to be exclusive of any other remedy, but each
and every remedy shall be cumulative and in addition to any and every other
remedy given hereunder this Agreement (including, without limitation, this
Article 10), under the Notes, the Letters of Credit or under any of the other
Facility Documents.

Section 10.15. Survival. So long as the Guarantied Obligations shall
not have been fully and finally performed and indefeasibly paid, the
obligations of the JLM Domestic Entities under this Article 10 shall survive
the transfer and payment of any Note or Letter of Credit Obligation and the
payment in full of all the Notes and the Letter of Credit Obligations and the
expiration and termination of the Revolving Credit Commitment.

ARTICLE 11. GUARANTY OF MACDONALD.

Section 11.01. Guarantied obligations. MacDonald, in consideration of
the execution and delivery of this Agreement by the Bank, hereby irrevocably
and unconditionally guarantees to the Bank, as and for his own debt, until
final payment has been made:

(a) the due and punctual payment of the principal of, and interest on,
the North Carolina Term Note at any time outstanding and the due and punctual
payment of all other amounts payable, and all other indebtedness owing, by JLM
Terminals with respect to the North Carolina Term Loan (all such obligations so
guarantied are herein collectively referred to as the ''MacDonald Guarantied
Obligations"), in each case when and as the same shall become due and payable,
whether at maturity, pursuant to mandatory or optional prepayment, by
acceleration or otherwise, all in accordance with the terms and provisions
hereof and thereof, it being the intent of MacDonald that the guaranty set
forth in this Section 11.01 (the "Limited Guaranty") shall be a guaranty of
payment and not a guaranty of collection; and

(b) the punctual and faithful performance, keeping, observance, and
fulfillment by JLM Terminals of all duties, agreements, covenants and
obligations of JLM Terminals with respect to the North Carolina Term Loan.

Section 11.02. Performance Under This Agreement. In the event any
Obligor fails to make, on or before the due date thereof, any payment of the
principal of, or interest on, the North Carolina Term Note or of any other
amounts payable, or any other

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<PAGE> 49

indebtedness owing, with respect to the North Carolina Term Loan or if any
Obligor shall fail to perform, keep, observe, or fulfill any other obligation
referred to in clause (a) or clause (b) of Section 11.01 hereof in the manner
provided in the North Carolina Term Note or in any other Facility Document
evidencing or securing the North Carolina Term Loan, MacDonald shall cause
forthwith to be paid the moneys, or to be performed, kept, observed, or
fulfilled each of such obligations, in respect of which such failure has
occurred.

SECTION 11.03. LIMITED GUARANTY. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED HEREIN, MACDONALD'S OBLIGATIONS UNDER THIS AGREEMENT ARE
LIMITED TO $250,000.

Section 11.04. Waivers. To the fullest extent permitted by law,
MacDonald does hereby waive:

(a) notice of acceptance of the Limited Guaranty;

(b) notice of any borrowings under this Agreement, or the creation,
existence or acquisition of any of the MacDonald Guarantied Obligations,
subject to MacDonald's right to make inquiry of the Bank to ascertain the
amount of the MacDonald Guarantied Obligations at any reasonable time;

(c) notice of the amount of the MacDonald Guarantied Obligations,
subject to MacDonald's right to make inquiry of the Bank to ascertain the
amount of the MacDonald Guarantied Obligations at any reasonable time;

(d) notice of adverse change in the financial condition of any Obligor
or any other fact that might increase MacDonald's risk hereunder;

(e) notice of presentment for payment, demand, protest, and notice
thereof as to the North Carolina Term Note;

(f) notice of any Default or Event of Default;

(g) all other notices and demands to which MacDonald might otherwise
be entitled (except if such notice or demand is specifically otherwise required
to be given to MacDonald hereunder or under the other Facility Documents);

(h) the right by statute or otherwise to require the Bank to institute
suit against any Obligor or to exhaust the rights and remedies of the Bank
against any Obligor, MacDonald being bound to the payment of each and all
MacDonald Guarantied Obligations, whether now existing or hereafter accruing,
as fully as if such MacDonald Guarantied Obligations were directly owing to the
Bank by MacDonald;

(i) any defense arising by reason of any disability or other defense
(other than the defense that the MacDonald Guarantied Obligations shall have
been fully and finally performed and

44
<PAGE> 50

indefeasibly paid) of any Obligor or by reason of the cessation from any cause
whatsoever of the liability of any Obligor in respect thereof;

(j) any stay (except in connection with a pending appeal), valuation,
appraisal, redemption or extension law now or at any time hereafter in force
which, but for this waiver, might be applicable to any sale of Property of
MacDonald made under any judgment, order or decree based on this Agreement, and
MacDonald covenants that he will not at any time insist upon or plead, or in
any manner claim or take the benefit or advantage of such law; and

(k) any claim of any nature arising out of any right of indemnity,
contribution, reimbursement or any similar right, or any claim of subrogation
arising, in respect of any payment made under the Limited Guaranty or in
connection with the Limited Guaranty, against any Obligor or the estate of such
Obligor (including, without limitation, Liens on the Property of such Obligor
or the estate of such Obligor), in each case if, but only if, and for so long
as, such Obligor is the subject of any proceeding brought under the Federal
Bankruptcy Code or under the applicable bankruptcy laws of any appropriate
jurisdiction, whether now or hereafter in effect, and further agrees that
MacDonald will not file any claims against such Obligor or the estate of such
Obligor in the course of any such proceeding in respect of the rights referred
to in this clause (k), and further agrees that the Bank may specifically
enforce the provisions of this clause (k).

Until all of the MacDonald Guarantied Obligations shall have been paid in full,
MacDonald shall not have any right of subrogation, reimbursement, or indemnity
whatsoever in respect thereof and no right of recourse to or with respect to
any assets or Property of any Obligor. Nothing shall discharge or satisfy the
obligations of MacDonald hereunder except the full and final performance and
indefeasible payment of the MacDonald Guarantied Obligations by MacDonald or
any Obligor, upon which the Bank agrees to transfer and assign its interest in
the North Carolina Term Note to MacDonald without recourse, representation or
warranty of any kind (other than that the Bank owns such Note and that such
Note is free of Liens created by such holder). All of the MacDonald Guarantied
Obligations shall in the manner and subject to the limitations provided herein
for the acceleration of, the North Carolina Term Note, forthwith become due and
payable without notice.

Section 11.05. Releases. MacDonald consents and agrees that, without
notice to or by MacDonald and without affecting or impairing the obligations of
MacDonald hereunder, the Bank, in the manner provided herein, by action or
inaction, may:

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<PAGE> 51

more of the North Carolina Term Note or the other Facility Documents evidencing
or securing the North Carolina Term Loan;

(b) grant other indulgences to any other Obligor in respect thereof;

(c) amend or modify in any manner and at any time (or from time to
time) any one or more of North Carolina Term Note or the other Facility
Documents evidencing or securing the North Carolina Term Loan in accordance
with Section 12.01 or otherwise;

(d) release or substitute any one or more of the endorsers or
guarantors of the Guaranteed Obligations whether parties hereto or not; and

(e) exchange, enforce, waive, or release, by action or inaction, any
security for the MacDonald Guarantied obligations (including, without
limitation, any of the collateral therefor) or any other guaranty of the North
Carolina Term Note.

Section 11.06. Marshaling. MacDonald consents and agrees that:

(a) the Bank shall be under no obligation to marshal any assets in
favor of MacDonald or against or in payment of any or all of the MacDonald
Guarantied Obligations; and

(b) to the extent any Obligor makes a payment or payments to the Bank,
which payment or payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, or required, for any of
the foregoing reasons or for any other reason, to be repaid or paid over to a
custodian, trustee, receiver, or any other party under any bankruptcy law,
common law, or equitable cause, then to the extent of such payment or
repayment, the obligation or part thereof intended to be satisfied thereby
shall be revived and continued in full force and effect as if said payment or
payments had not been made and MacDonald shall be primarily liable for such
obligation.

Section 11.07. Liability. MacDonald agrees that the liability of
MacDonald in respect of this Article 11 shall not be contingent upon the
exercise or enforcement by the Bank of whatever remedies the Bank may have
against any other Obligor or the enforcement of any Lien or realization upon
any security the Bank may at any time possess.

Section 11.08. Primary obligation. The Limited Guaranty set forth in
this Article 11 is a primary and original obligation of each of the JLM
Domestic Entities and an absolute, unconditional, continuing and irrevocable
guaranty of payment and performance and shall remain in full force and effect
until the full and final payment of the MacDonald Guarantied Obligations
without respect to future changes in conditions, including change of law or any
invalidity or irregularity with respect to the issuance or

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<PAGE> 52

assumption of any obligations (including, without limitation, the North
Carolina Term Note) of or by any Obligor, or with respect to the execution and
delivery of any agreement (including, without limitation, the North Carolina
Term Note and the other Facility Documents evidencing or securing the North
Carolina Term Loan) of any Obligor.

Section 11.09. Election to Perform obligations. Any election by
MacDonald to pay or otherwise perform any of the obligations of any Obligor
under the North Carolina Term Note or under any of the other Facility Documents
evidencing or securing the North Carolina Term Loan, whether pursuant to this
Article II or otherwise, shall not release such Obligor from such obligations
or any of its other obligations under the North Carolina Term Note or under any
of the other Facility Documents evidencing or securing the North Carolina Term
Loan.

Section 11.10. No Election. The Bank shall have the right to seek
recourse against any MacDonald to the fullest extent provided for herein for
MacDonald's obligations under this Agreement (including, without limitation,
this Article 11) in respect of the North Carolina Term Note. No election to
proceed in one form of action or proceeding, or against any party, or on any
obligation, shall constitute a waiver of the Bank's right to proceed in any
other form of action or proceeding or against other parties unless such holder
has expressly waived such right in writing. Specifically, but without limiting
the generality of the foregoing, no action or proceeding by the Bank against
any Obligor under any document or instrument evidencing obligations of such
Obligor to the Bank shall serve to diminish the liability of MacDonald under
this Agreement (including, without limitation, this Article 11) except to the
extent that the Bank finally and unconditionally shall have realized payment by
such action or proceeding, notwithstanding the effect of any such action or
proceeding upon MacDonald's right of subrogation against any Obligor.

Section 11.11. Severability. Subject to Article 9 hereof and
applicable law, each of the rights and remedies granted under this Article 11
to the Bank may be exercised by the Bank without notice by the Bank to, or the
consent of or any other action by, the Bank.

Section 11.12. Other Enforcement Rights. The Bank may proceed, as
provided in Article 11 hereof, to protect and enforce the Limited Guaranty by
suit or suits or proceedings in equity, at law or in bankruptcy, and whether
for the specific performance of any covenant or agreement contained herein
(including, without limitation, in this Article 11) or in execution or aid of
any power herein granted; or for the recovery of judgment for the obligations
hereby guarantied or for the enforcement of any other proper, legal or
equitable remedy available under applicable law. The Bank shall have, to the
fullest extent permitted by law and this Agreement, a right of set-off against,
any and all credits and any and all other Property of MacDonald, now or at any
time whatsoever with, or in

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<PAGE> 53

the possession of, such holder, or anyone acting for such holder, as security
for any and all obligations of MacDonald hereunder.

Section 11.13. Delay or Omission No Waiver. No course of dealing on
the part of the Bank and no delay or failure on the part of any such Person to
exercise any right hereunder (including, without limitation, this Article II)
shall impair such right or operate as a waiver of such right or otherwise
prejudice such Person's rights, powers and remedies hereunder. Every right and
remedy given by the Limited Guaranty or by law to the Bank may be exercised
from time to time as often as may be deemed expedient by such Person.

Section 11.14. Restoration of Rights and Remedies. If the Bank shall
have instituted any proceeding to enforce any right or remedy under the Limited
Guaranty, under the North Carolina Term Note, or under any Security Document
securing the North Carolina Term Loan, and such proceeding shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Bank, then and in every such case the Bank and MacDonald
shall, except as may be limited or affected by any determination in such
proceeding, be restored severally and respectively to its respective former
positions hereunder and thereunder, and thereafter, subject as aforesaid, the
rights and remedies of the Bank shall continue as though no such proceeding had
been instituted.

Section 11.15. Cumulative Remedies. No remedy under this Agreement
(including, without limitation, this Article 11), the North Carolina Term Note
or any of the other Facility Documents evidencing or securing the North
Carolina Term Note is intended to be exclusive of any other remedy, but each
and every remedy shall be cumulative and in addition to any and every other
remedy given hereunder this Agreement (including, without limitation, this
Article 11), under the North Carol na Term Note or under any of the other
Facility Documents evidencing or securing the North Carolina Term Note.

Section 11.16. Survival. So long as the MacDonald Guarantied
Obligations shall not have been fully and finally performed and indefeasibly
paid, the obligations of MacDonald under this Article 11 shall survive the
transfer and payment of the North Carolina Term Note and the expiration and
termination of the Revolving Credit Commitment.

ARTICLE 12. MISCELLANEOUS.

Section 12.01. Amendments and Waivers. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be amended or
modified only by an instrument in writing signed by the JLM Domestic Entities
and the Bank and any provision of this Agreement may be waived by the JLM
Domestic Entities and the Bank. No failure on the part of the Bank to

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<PAGE> 54
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof or preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

Section 12.02. Usury. Anything herein to the contrary notwithstanding,
the obligations of the JLM Domestic Entities under this Agreement and the Notes
shall be subject to the limitation that payments of interest shall not be
required to the extent that receipt thereof would be contrary to provisions of
law applicable to the Bank limiting rates of interest which may be charged or
collected by the Bank.

Section 12.03. Expenses. The JLM Domestic Entities shall reimburse the
Bank on demand for all reasonable costs, expenses, and charges (including,
without limitation, reasonable fees and charges of external legal counsel for
the Bank) incurred by the Bank in connection with the preparation, performance,
or enforcement of this Agreement, the Notes and the other Facility Documents.
Each of the JLM Domestic Entities agrees to indemnify the Bank and its
directors, officers, employees and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims, damages or expenses incurred
by any of them arising out of or by reason of any investigation or litigation or
other proceedings (including any threatened investigation or litigation or other
proceedings) arising under or relating to the Facility Documents or to any
actual or proposed use by any JLM Entity of the proceeds of the Loans, including
without limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation or litigation or other proceedings (but
excluding any such losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or wilful misconduct of the Person to be
indemnified).

Section 12.04. Survival. The obligations of the JLM Domestic
Entities under Section 12.03 shall survive the repayment of the Loans and the
Letters of Credit and the termination of the Revolving Credit Commitment.

SECTION 12.05. Assignment Participations.

(a) This Agreement shall be binding upon, and shall inure to
the benefit of, the JLM Domestic Entities, MacDonald, the Bank and their
respective successors and assigns, except that the JLM Domestic Entities and
MacDonald may not assign or transfer THEIR RIGHTS OR OBLIGATIONS hereunder. The
Bank may, with the prior written consent of the JLM Domestic Entities or
MacDonald, assign, or sell participation in, all or any part of any Loan or its
rights and obligations under the Letters of Credit to another bank or other
entity, in which event (i) in the case of an assignment, upon notice thereof by
the Bank to the JLM Domestic Entities, the assignee shall have, to the extent of
such assignment (unless otherwise provided therein), the same rights, benefits
and

<PAGE> 55

obligations as it would have if it were a Bank hereunder) and (ii) in the case
of a participation, the participant shall have no rights under the Facility
Documents and all amounts payable by the JLM Domestic Entities under Articles 2
and 3 shall be determined as if the Bank had not sold such participation. The
agreement executed by the Bank in favor of the participant shall not give the
participant the right to require the Bank to take or omit to take any action
hereunder except action directly relating to (i) the extension of a payment date
with respect to any portion of the principal of or interest on any amount
outstanding hereunder allocated to such participant, (ii) the reduction of the
principal amount outstanding hereunder or (iii) the reduction of the rate of
interest payable on such amount or any amount of fees payable hereunder to a
rate or amount, as the case may be, below that which the participant is entitled
to receive under its agreement with the Bank. The Bank may furnish any
information concerning any JLM Entity or MacDonald in the possession of the Bank
from time to time to assignees and participants (including prospective assignees
and participants); provided that the Bank shall require any such prospective
assignee or such participant (prospective or otherwise) to agree in writing to
maintain the confidentiality of such information.

(b) In addition to the assignments and participations
permitted under paragraph (a) above, the Bank may assign and pledge all or any
portion of its Loans, its Notes and its rights and obligations under the Letters
of Credit to (i) any affiliate of the Bank or (ii) any Federal Reserve Bank but
only as collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank. No such assignment or the exercise of any rights thereunder shall
release the assigning Bank from its obligations hereunder or the relationship
among the JLM Domestic Entities, MacDonald and the Bank.

Section 12.06. Notices. Unless the party to be notified otherwise
notifies the other party in writing as provided in this Section, and except as
otherwise provided in this Agreement, notices shall be given to the Bank, to the
JLM Domestic Entities and to MacDonald by ordinary mail or telecopier addressed
to such party at its address on the signature page of this Agreement. Notices
shall be effective: (a) if given by mail, 72 hours after DEPOSIT IN THE MAILS
with first class postage prepaid, addressed as aforesaid; and (b) if given by
telecopier, when the telecopy is transmitted to the telecopier number as
aforesaid; provided that notices to the Bank shall be effective upon receipt.

Section 12.07. Setoff. Each of the JLM Domestic Entities and MacDonald
agrees that, in addition to (and without limitation of) any right of setoff,
banker's lien or counterclaim the Bank may otherwise have, the Bank shall be
entitled, at its option, to offset balances (general or special, time or demand,
provisional or final) held by it for the account of any JLM Domestic Entity or
MacDonald at any of the Bank's offices, in Dollars or in any other

<PAGE> 56

currency, against any amount payable by the JLM Domestic Entities or MacDonald
to the Bank under this Agreement, the Notes or the Letters of Credit which is
not paid when due (regardless of whether such balances are then due to such JLM
Domestic Entity or the MacDonald), in which case it shall promptly notify the
JLM Domestic Entities and MacDonald thereof; provided that the Bank's failure to
give such notice shall not affect the validity thereof. Payments by the JLM
Domestic Entities and MacDonald hereunder shall be made without setoff or
counterclaim.

SECTION 12.08. JURISDICTION IMMUNITIES. {a) EACH OF THE JLM DOMESTIC
ENTITIES AND MACDONALD HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
MASSACHUSETTS STATE OR UNITED STATES FEDERAL COURT SITTING IN SUFFOLK COUNTY
OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. THE
NOTES. THE LETTERS OF CREDIT OR THE OTHER FACILITY DOCUMENTS AND EACH OF THE JLM
DOMESTIC ENTITIES AND MACDONALD HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
MASSACHUSETTS STATE OR FEDERAL COURT. EACH OF THE JLM DOMESTIC ENTITIES AND
MACDONALD IRREVOCABLY consents TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH JLM
DOMESTIC ENTITY OR MACDONALD AT ITS ADDRESS SPECIFIED IN SECTION 12.06. EACH OF
THE JLM DOMESTIC ENTITIES AND MACDONALD AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY Be ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
EACH OF THE JLM DOMESTIC ENTITIES AND MACDONALD FURTHER WAIVES ANY OBJECTION TO
VENUE IN SUCH STATE AND ANY OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE
ON THE BASIS OF FORUM NON COVENIENS. EACH OF THE JLM DOMESTIC ENTITIES AND
MACDONALD FURTHER AGREES THAT ANY ACTION OR PROCEEDING BROUGHT AGAINST THE BANK
SHALL BE BROUGHT ONLY IN MASSACHUSETTS STATE OR UNITED STATES FEDERAL COURT
SITTING IN SUFFOLK COUNTY. EACH OF THE JLM DOMESTIC ENTITIES AND MACDONALD
WAIVES ANY RIGHT IT MAY HAVE TO JURY TRIAL.

(b) Nothing in this Section 12.08 shall affect the right of
the Bank to serve legal process in any other manner permitted by law or affect
the right of the Bank to bring any action or PROCEEDING AGAINST ANY JLM Domestic
Entity, MacDonald or any of their respective properties in the courts of any
other jurisdictions.

(c) To the extent that any JLM Domestic Entity or MacDonald
has or hereafter may acquire any immunity from jurisdiction of any court or from
any legal process (whether from service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, such JLM Domestic Entity and MacDonald hereby irrevocably
waives such immunity in respect of its obligations under this Agreement, the
Note, the Letters of Credit and the other Facility Documents.

<PAGE> 57

Section 12.09. Table of Contents: Headings. Any table of contents and
the headings and captions hereunder are for convenience only and shall not
affect the interpretation or construction of this Agreement.

Section 12.10. Severability. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.

Section 12.11. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart.

Section 12.12. Integration. The Facility Documents set forth the entire
agreement among the parties hereto relating to the transactions contemplated
thereby and supersede any prior oral or written statements or agreements with
respect to such transactions.

SECTION 12.13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH. THE LAW OF THE COMMONWEALTH OF
MASSACHUSETTS.

Section 12.14. Confidentiality. The Bank agrees (on behalf of itself
and each of its affiliates, directors, officers, employees and representatives)
to use reasonable precautions to keep confidential, in accordance with safe and
sound banking practices, any non-public information supplied to it by the JLM
Domestic Entities or MacDonald pursuant to this Agreement which is identified by
the JLM Domestic Entities or MacDonald as being confidential at the time the
same is delivered to the Bank, provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for the Bank, (iii) to bank
examiners, auditors or accountants, (iv) in connection with any litigation to
which the Bank is a party or (v) to any assignee or PARTICIPANT (or prospective
assignee or participant) so long as such assignee or participant (or prospective
assignee or participant) agrees to use reasonable precautions to keep such
INFORMATION CONFIDENTIAL; and provided finally that in no event shall the Bank
be obligated or required to return any materials furnished by the JLM Domestic
Entities or MacDonald.

Section 12.15. Treatment of Certain Information. Each JLM Domestic
Entity and MacDonald (a) acknowledges that services may be offered or provided
to it (in connection with this Agreement or otherwise) by the Bank or by one or
more of its subsidiaries or affiliates and (b) acknowledges that information
delivered to the

<PAGE> 58

Bank by each JLM Domestic Entity and MacDonald may be provided to each such
subsidiary and affiliate.

[BALANCE OF PAGE LEFT INTENTIONALLY BLANK]

<PAGE> 59

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

JLM INDUSTRIES, INC.

BY /s/ Frank A. Musto
---------------------
Name: Frank A. Musto
Title:VP & CFO

JLM MARKETING, INC.

BY /s/ Frank A. Musto
---------------------
Name: Frank A. Musto
Title:VP & CFO

JLM TERMINALS, INC.

BY /s/ Frank A. Musto
---------------------
Name: Frank A. Musto
Title:VP & CFO

JLM INTERNATIONAL, INC.

BY /s/ Frank A. Musto
---------------------
Name: Frank A. Musto
Title:VP & CFO

OLEFINS MARKETING, INC.

BY /s/ Frank A. Musto
---------------------
Name: Frank A. Musto
Title:VP & CFO

/s/ John L. MacDonald
-------------------------
John L. MacDonald

Address for Notices:

8675 Hidden Parkway
Tampa, FL 33637
Telecopier No.: (813) 632-3301
Attn: Chief Executive Office

54
<PAGE> 60

BANK:
STATE STREET BANK & TRUST
COMPANY

By /s/ William F. Zola
----------------------
Name: William F. Zola
Title:Assistant Vice President

Address for Notices:

225 Franklin Street
Boston, MA 02110
Telecopier No.: (617) 654-4176
Attention: William F. Zola

[SIGNATURE PAGE TO CREDIT AGREEMENT]

<PAGE> 61
AMENDED AND RESTATED PROMISSORY NOTE

$11,000,000.00 July 19, 1995

FOR VALUE RECEIVED, JLM MARKETING, INC., a Delaware corporation (the
"Maker"), HEREBY PROMISES to pay to the order of STATE STREET BANK AND TRUST
COMPANY (hereinafter called the "Bank"), on the Revolving Credit Termination
Date (as such term is defined in that certain Amended and Restated Credit
Agreement, dated as of July 19, 1995 (the "Credit Agreement"), and all other
capitalized terms which are used herein and not otherwise defined herein shall
have the meanings ascribed to them in the Credit Agreement), the principal sum
of the lesser of (i) Eleven Million Dollars ($11,000,000) or (ii) the
outstanding amount of Revolving Credit Loans; together with interest (computed
on the basis of the actual number of days elapsed over a year of three hundred
sixty (360) days) on the unpaid principal amount thereof outstanding hereunder
from time to time from the date hereof, at a fluctuating interest rate per
annum (the "Interest Rate") equal to the rate of interest announced by the Bank,
in Boston, from time to time as the Bank's prime rate (the "Prime Rate")
payable monthly in arrears, on the 1st day of each calendar month during the
term hereof beginning August 1, 1995 and on the final day when said principal
amounts are paid in full. Each change in the Interest Rate hereunder due to a
<PAGE> 62
change in the Prime Rate shall take effect on the date of change in the Prime
Rate. Any amounts advanced by the Bank with regard to a payment upon a
banker's acceptance, documentary letter of credit or standby letter of credit
shall be payable as a cash advance pursuant to this Note, and subject to the
payment of interest, as of the date such amounts are advanced by the Bank.

Both principal and interest are payable in lawful money of the United
States of America to the Bank at 225 Franklin Street, Boston, Massachusetts
02110 or such other address as the Bank may designate to the Maker; provided,
however, the Bank may charge from time to time such amounts against any account
of the Maker with the Bank.

Anything herein contained to the contrary notwithstanding, the maximum
rate of interest payable in respect of the unpaid principal amount hereof shall
not exceed the maximum rate allowable under such provisions of law, as in
effect from time to time, as is applicable to the indebtedness evidenced hereby
and to the payee or holder thereof.

This Note is the Revolving Credit Note referred to in, and entitled to
the benefits of, the Credit Agreement and is secured by an Amended and Restated
Security Agreement, dated as of June 15, 1994 (the "Security Agreement"), as
more fully described in the Credit Agreement. The prompt payment of this Note
is guaranteed, all as more fully described in the Credit Agreement. The Bank
or any subsequent holder of this Note shall have all of the rights arising
under this Note, the Credit Agreement and the
<PAGE> 63
Security Agreement hereinbefore referred to. The Credit Agreement and the
Security Agreement grant to the Bank certain security interests in property of
the Maker and the Guarantors, and the Bank or any subsequent holder of this
Note shall, in addition to all other rights, be entitled to all the rights of a
secured party under the Massachusetts Uniform Commercial Code.

Upon the occurrence of any Event of Default specified in said Credit
Agreement or Security Agreement, the principal of this Note, premium if any,
principal amount of outstanding banker's acceptance, documentary letters of
credit and standby letters of credit, fees with respect to such amounts and the
interest and penalties accrued thereon may be declared forthwith due and
payable as provided in said Credit Agreement.

Notwithstanding anything to the contrary herein, principal and interest
hereunder shall be payable in the manner set forth in the Credit Agreement and
the Security Agreement.

If any required payment of principal, premium, if any, fees or
interest, or any part thereof, be not paid when due the same shall bear
interest at the rate per annum equal to the Prime Rate plus two (2) percentage
points until paid (computed on the basis of the actual number of days elapsed
over a year of three hundred sixty (360) days). In addition, the Bank may
collect, and the Maker agrees to pay, a late charge equal to five percent (5%)
of any principal, fee or interest payment due under this Note if such payment
is not made within ten (10) days of the due date
<PAGE> 64
thereof to defray the extra expense of handling the delinquent payment.

The maker hereby waives presentment for payment, demand, notice of
dishonor and protest and all other demands or notices in connection with the
delivery, performance, default or enforcement of this Note.

The Bank shall have a lien upon the right to set off against all
deposits and property of the Maker now or hereafter in the Bank's possession or
in transit to it.

[BALANCE OF PAGE LEFT BLANK INTENTIONALLY]
<PAGE> 65
This Note shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts.

JLM MARKETING, INC.

By: /s/ John T. White
----------------------------
Name: John T. White
Title: Vice President
<PAGE> 66
AMENDMENT NO. 1

Dated as of December 30, 1995

This AMENDMENT among JLM INDUSTRIES, INC., a Delaware corporation ("JLM
Industries"), JLM MARKETING, INC., a Delaware corporation ("JLM Marketing"),
JLM TERMINALS, INC., a North Carolina corporation ("JLM Terminals") JLM
INTERNATIONAL, INC., a Delaware corporation ("JLM International"), and OLEFINS
MARKETING, INC., a Delaware corporation ("Olefins Marketing" and together with
JLM Industries, JLM Marketing, JLM Terminals and JLM International,
collectively, the "JLM domestic Entities"); JOHN L. MACDONALD, an individual
residing at 921 Ankorage Rd., Tampa, FL 33602 ("MacDonald"); and STATE STREET
BANK AND TRUST COMPANY, a Massachusetts bank and trust company (the "Bank").

PRELIMINARY STATEMENT.

A. The JLM Domestic Entities, MacDonald and the Bank have entered
into an Amended and Restated Credit Agreement dated as of June 15, 1994 (the
"Credit Agreement"; the capitalized terms defined therein being used herein as
therein defined unless otherwise defined herein).

B. The JLM Domestic Entities, MacDonald and the Bank have agreed to
amend the Credit Agreement and the Revolving Credit Note as hereinafter set
forth.

SECTION 1. Amendments to Credit Agreement. The Credit Agreement is,
effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 4 hereof, hereby amended as follows;

(a) The definition of the term "Revolving Credit Commitment"
contained in Section 1.01 of the Credit Agreement is amended and restated in
full to read as follows:

"Commitment" means the obligation of the Bank to make the
Revolving Credit Loans under this Agreement in the
aggregate principal amount of $11,000,000, as such amount
may be reduced or otherwise modified from time to time.

(b) Article 8 is amended and restated in its entirety to read
as follows:

<PAGE> 67

ARTICLE 8. FINANCIAL COVENANTS.

Section 8.01. Net Income, (a) JLM Industries shall maintain
(i) as determined as of the end of each of each fiscal quarter of the
JLM Entities, Consolidated Net Income of not less than $1,000,000 for
the two most recently ended fiscal quarters and (ii) as determined as
of the end of each fiscal year of the JLM Entities, Consolidated Net
Income of not less than $2,000,000 for such fiscal year.

(b) JLM Marketing shall maintain (i) as
determined as of the end of each fiscal quarter of the JLM Entities,
net income of not less than $250,000 for the two most recently ended
fiscal quarters and (ii) as determined as of the end of each fiscal
year of the JLM Entities, net income of not less than $500,000 for
such fiscal year.

Section 8.02. Minimum Tangible Net Worth. JLM Industries
shall maintain, as determined as of the end of each fiscal year of the
JLM Entities, Consolidated Tangible Net Worth of not less than (a)
$11,000,000 at December 31, 1995, and (b) for each fiscal year
thereafter, an amount equal to the minimum required (not actual)
amount for the immediately preceding fiscal year plus $2,000,000

Section 8.03. Leverage Ratio. JLM Industries shall
maintain, as determined as of the end of each fiscal quarter of the JLM
Entities, a Leverage Ratio of not greater than (a) 11.0 to 1.0 for the
fiscal quarter ending December 31, 1995, (b) 9.5 to 1.0 for each
fiscal quarter ending during fiscal year 1996, (c) 7.0 to 1.0 for each
fiscal quarter ending during fiscal year 1997, (d) 5.5 to 1.0 for each
fiscal quarter ending during fiscal year 1998, (e) 4.0 to 1.0 for each
fiscal quarter ending during fiscal year 1999, (f) 3.0 to 1.0 for each
fiscal quarter ending during fiscal year 2000, and (g) 2.0 to 1.0 for
each fiscal quarter ending thereafter.

Section 8.04. Cash Flow Ratio. (a) JLM Terminals shall
maintain, as determined as of the end of each fiscal year of the JLM
Entities, a Consolidated Cash Flow Ratio of not less than 1.25 to 1.00.

(b) JLM Industries shall maintain, as determined
as of the end of each fiscal year of the JLM Entities, a Cash Flow
Ratio of not less than 1.30 to 1.00.

(c) Article 11 of the Credit Agreement is hereby
deleted in its entirety and the words "INTENTIONALLY OMITTED"
substituted therefore. MacDonald is hereby released from all liability
in respect of his guaranty contained in said Article 11

<PAGE> 68
-3-

and shall no longer be an "Obligor" under the Credit Agreement. From and after
the date of effectiveness of this Amendment, any reference in the Credit
Agreement or the other Facility Documents to MacDonald in his capacity as a
guarantor under the Credit Agreement, or to Article 11 of the Credit Agreement
or any of the Sections contained within Article 11, shall be of no further force
and effect.

(d) The form of Revolving Credit Note attached to the Credit Agreement
as Exhibit A1 is hereby replaced with the form of Revolving Credit Note attached
hereto as Exhibit A1.

(e) The form of Borrowing Base Certificate attached to the Credit
Agreement as Exhibit B1 is hereby replaced with the form of Borrowing Base
Certificate attached hereto as Exhibit B1.

SECTION 2. Amendments to Revolving Credit Note. Effective as of the date
hereof and subject to the satisfaction of the conditions precedent set forth in
Section 4 hereof, the Revolving Credit Note shall be amended and restated in its
entirety by an amended and restated promissory note in the form of Exhibit A1
hereto.

SECTION 3. Waiver. Effective as of the date hereof and subject to the
satisfaction of the conditions precedent set forth in Section 4 hereof, the Bank
hereby waives any Default or Event of Default due to the failure to comply with
the covenants contained in Article 8 of the Credit Agreement for the fiscal
quarters ending prior to December 31, 1995.

SECTION 4. Conditions of Effectiveness. This Amendment shall become
effective when, and only when, the Bank shall have received counterparts of this
Amendment executed by the JLM Domestic Entities, MacDonald and the Bank, and
Sections 1, 2 and 3 hereof shall become effective when, and only when, the Bank
shall have additionally received all of the following documents, each document
(unless otherwise indicated) being dated the date of receipt thereof by the Bank
(which date shall be the same for all such documents), in form and substance
satisfactory to the Bank:

(a) The Amended and Restated Promissory Note in the form of Exhibit
A1 hereto.

(b) Certified copies of (i) the resolutions of the Board of Directors of
each JLM Domestic Entity approving this Amendment and the matters contemplated
hereby and (ii) all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Amendment and the matters
contemplated hereby.

<PAGE> 69

-4-

(c) A certificate of the Secretary or an Assistant Secretary of each JLM
Domestic Entity certifying the names and true signatures of the officers of such
JLM Domestic Entity authorized to sign this Amendment and the other documents to
be delivered hereunder.

(d) A consent in the form appended hereto as Annex I (the "Consent"),
executed by JLM Canada.

(e) Certified copies of (i) the resolutions of the Board of Directors of
JLM approving the Consent and the matters contemplated hereby and thereby and
(ii) all documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to the Consent and the matters contemplated
hereby.

(f) A certificate of the Secretary or an Assistant Secretary of JLM
Canada certifying the names and true signatures of the officers of JLM Canada
authorized to sign the Consent.

(g) A favorable opinion of John Tower White, counsel for the JLM
Domestic Entities and MacDonald, to the effect that this Amendment has been duly
authorized, executed and delivered by the JLM Domestic Entities and MacDonald,
and that the amended and restated Revolving Credit Note has been duly
authorized, executed and delivered by JLM Marketing, Inc., and such instruments
constitute the legal, valid and binding obligations of such parties, enforceable
against such parties in accordance with their respective terms, and confirming
the opinion of such counsel furnished on June 15, 1994 pursuant to Section 4.01
(n) of the Credit Agreement, with references therein to the Credit Agreement to
mean the Credit Agreement as amended by this Amendment.

(h) A favorable opinion of Brans, Lehun, Baldwin & Champagne, counsel
for JLM Canada, to the effect that the Consent has been duly authorized,
executed and delivered by JLM Canada and constitutes the legal, valid and
binding obligation of JLM Canada, enforceable against JLM Canada in accordance
with its terms, and confirming the opinion of such counsel furnished on June 15,
1994 pursuant to Section 4.01(n) of the Credit Agreement, with references
therein to the Credit Agreement to mean the Credit Agreement as amended by this
Amendment.

(i) A certificate signed by a duly authorized officer of each JLM
Domestic Entity stating that:

(i) The representations and warranties contained in Section 5 hereof are
correct on and as of the date of such certificate as though made on and
as of such date, and

<PAGE> 70

-5-

(ii) No event has occurred and is continuing which constitutes a Default
or Event of Default.

SECTION 5. Representations and Warranties of the JLM Domestic Entities
and MacDonald. Each of each JLM Domestic Entity and MacDonald represent and
warrant as follows:

(a) Such JLM Domestic Entity is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction indicated at
the beginning of this Amendment.

(b) The execution, delivery and performance by such JLM Domestic
Entity and MacDonald of this Amendment, the amended and restated Revolving
Credit Note and the Facility Documents, as amended hereby, to which it is or is
to be a party are within such JLM Domestic Entity's corporate powers, have been
duly authorized by all necessary corporate action and do not contravene (i) such
JLM Domestic Entity's charter or by-laws, (ii) any law or any contractual
restriction binding on or affecting such JLM Domestic Entity or MacDonald, as
the case may be, or result in, or require, the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest or other charge,
encumbrance or preferential arrangement of any nature upon or with respect to
any of the properties now owned or hereafter acquired by such JLM Domestic
Entity or MacDonald, as the case may be.

(c) No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by such JLM Domestic Entity or
MacDonald, as the case may be, of this Amendment, the amended and restated
Revolving Credit Note or any of the Facility Documents, as amended hereby, to
which it is or is to be a party.

(d) This Amendment, the amended and restated Revolving Credit Note
and each of the other Facility Documents, as amended hereby, to which such JLM
Domestic Entity or MacDonald, as the case may be, is a party constitute legal,
valid and binding obligations of such JLM Domestic Entity or MacDonald, as the
case may be, enforceable against such JLM Domestic Entity or MacDonald, as the
case may be, in accordance with their respective terms.

(e) The Security Agreement constitutes valid and perfected first
priority Liens in and to the Collateral covered thereby enforceable against all
third parties in all jurisdictions and secure the payment of all obligations of
the JLM Domestic Entities under the Facility Documents, as amended hereby,
including all obligations of JLM Marketing, Inc. under the amended and restated
Revolving Credit Note; and the execution, delivery and performance of this
Amendment do not adversely affect the aforesaid Liens of such Security
Agreement.

<PAGE> 71

-6-

(f) The consolidated and consolidated balance sheets of the JLM Entities
as at December 31, 1994, and the related consolidated and consolidated income
statements and statements of cash flows and changes in stockholders' equity of
the JLM Entities for the fiscal years then ended, copies of which have been
furnished to the Bank, fairly present the financial condition of the JLM
Entities as at such date and the results of the operations of the JLM Entities
for the periods covered by such statements, and since December 31, 1994, there
has been no material adverse change in such condition or operations.

(f) There is no pending or threatened action or proceeding affecting
such JLM Domestic Entity before any court, governmental agency or arbitrator,
which may materially adversely affect the financial condition or operations of
such JLM Domestic Entity or which purport to affect the legality, validity or
enforceability of this Amendment, the amended and restated Revolving Credit Note
or any of the other Facility Documents, as amended hereby.

SECTION 6. Reference to and Effect on the Facility Documents.

(a) Upon the effectiveness of Sections 1, 2 and 3 hereof, on and after
the date hereof each reference in the Credit Agreement to "this Agreement,"
"hereunder," "hereof," "herein" or words of like import, and each reference in
the other Facility Documents to the Credit Agreement, shall mean and be a
reference to the Credit Agreement as amended hereby, and each reference in the
other Facility Documents to the Revolving Credit Note shall mean and be a
reference to the Revolving Credit Note as amended by the delivery of the amended
and restated promissory note in the form of Exhibit Al.

(b) Except as specifically amended above and by the delivery of the
amended and restated promissory note in the form of Exhibit A1, the Credit
Agreement and the Revolving Credit Note, and all other Facility Documents, shall
remain in full force and effect and are hereby ratified and confirmed. Without
limiting the generality of the foregoing, the Security Agreement and all of the
described therein, does and shall continue to secure the payment of all "Secured
Obligations" described therein, as amended hereby.

(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Bank under any of the Facility Documents, nor constitute
a waiver of any provision of any of the Facility Documents.

SECTION 7. Costs. Expenses and Taxes. The JLM Domestic Entities jointly and
severally agree to pay on demand all costs and expenses of the Bank in

<PAGE> 72

-7-

connection with the preparation, execution and delivery of this Amendment, the
Revolving Credit Note and the other instruments and documents to be delivered
hereunder, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Bank with respect thereto and with respect to
advising the Bank as to its rights and responsibilities hereunder and
thereunder. The JLM Domestic Entities further jointly and severally agree to pay
on demand all costs and expenses, if any (including, without limitation,
reasonable counsel fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Amendment, the Revolving Credit Note and the other instruments and documents to
be delivered hereunder, including, without limitation, reasonable counsel fees
and expenses in connection with the enforcement of rights under this Section 7.
In addition, the JLM Domestic Entities shall pay any and all stamp and other
taxes payable or determined to be payable in connection with the execution and
delivery of this Amendment, the Revolving Credit Note and the other instruments
and documents to be delivered hereunder, and agree to save the Bank harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes.

SECTION 8. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.

SECTION 9. Governing Law. This AMENDMENT SHALL be governed by, and
construed in accordance with, the laws of the State of Massachusetts.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.

JLM INDUSTRIES, INC.

By: /s/Frank A. Musto
--------------------
Name: Frank A.Musto
Title: VP & CFO

JLM MARKETING, INC.

By: /s/ Frank A. Musto
--------------------
Name: Frank A. Musto
Title: VP & CFO

<PAGE> 73

-8-

JLM TERMINALS, INC.

By: /s/ Frank A. Musto
--------------------
Name: Frank A. Musto
Title: VP & CFO

JLM INTERNATIONAL, INC.

By: /s/ Frank A. Musto
--------------------
Name: Frank A. Musto
Title: VP & CFO

OLEFINS MARKETING, INC.

By: /s/ Frank A. Musto
-----------------------
Name: Frank A. Musto
Title: VP & CFO

/s/John L. MacDonald
----------------------
John L. MacDonald

STATE STREET BANK AND TRUST
COMPANY

By: /s/ William F. Zola
----------------------
William F. Zola
Vice President
<PAGE> 74
[LOGO STATE STREET BANK] Steven W. Harvey
Vice President

Corporate Banking
225 Franklin Street
Boston, MA 02110-2804

Telephone: (617) 664-3021
Facsimile: (617) 664-4178
[email protected]

June 18, 1997

Mr. Frank A. Musto
Vice President and Treasurer
JLM Industries, Inc.
8675 Hidden River Parkway
Tampa, FL 33637

Dear Frank:

The Amended and Restated Credit Agreement ("Credit Agreement") dated June 15,
1994, as amended from time to time, by and among JLM Industries, Inc., JLM
Marketing, Inc. JLM Terminals, Inc., JLM International, Olefins Marketing,
Inc., John L. Macdonald and State Street Bank and Trust Company ("Bank") has a
Revolving Credit Termination Date (as defined in the Credit Agreement) of May
15, 1997. We are temporarily extending the facility and will forbear from
enforcing the maturity date of the Revolving Credit until July 31, 1997.
Interest payments will continue to be payable as though the Revolving Credit
has not matured.

All of the terms and conditions of the Credit Agreement and Security documents
governing and/or securing the Loan, remain in full force and effect and are
applicable to this letter except to the extent hereby modified. This
forbearance is not a waiver or novation on behalf of the Bank.

If you have any questions, please contact me at (617) 664-3021.

Sincerely,

State Street Bank and Trust Company

/s/ Steven W. Harvey 6/19/97
- ------------------------- -------
By: Steven W. Harvey Date

ACKNOWLEDGED AND AGREED:

Barnett Bank, N.A.

/s/ Lynn Billingsley, SVP 6/24/97
- ------------------------- -------
By: Lynn Billingsley Date

<PAGE> 1
EXHIBIT 10.22

SECURITY AGREEMENT

In consideration of one dollar and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and to induce STANDARD
CHARTERED BANK ("Bank"), having an office at 160 Water Street, New York, New
York, 10038 to extend credit and other financial accommodations to JLM
International, Inc. ("Borrower") on the terms set forth in the Financing
Agreements, as hereinafter defined, between Borrower and Bank, Borrower hereby
agrees that Bank shall have the rights, remedies and benefits hereinafter set
forth.

A. DEFINITIONS. As used in this Security Agreement:

1. All terms used herein which are defined in Article 1 or Article 9 of the
New York Uniform Commercial Code shall have the meanings set forth therein
unless otherwise defined in this Agreement, and all references to the
plural herein shall also mean the singular.

2. If there is more than a single borrower that is a signatory hereto, all
references to the term "Borrower" wherever used herein shall be deemed to
mean and include each of them, jointly and severally, individually and
collectively, and shall include the successors and assigns of each. All
references to the term "Bank" wherever used herein shall be deemed to mean
and include its parent, affiliates, subsidiaries, agents, correspondents,
representatives, bailees, and any participants in the financing of
Borrower; provided that the rights and remedies of Bank set forth herein
may only be exercised by Standard Chartered Bank and its successors or
assigns.

3. "Collateral" shall mean and include:

a. all personal and real property of Borrower whether now or
hereafter existing or now owned or hereafter acquired and wherever
located, of every kind and description, tangible or intangible,
including but not limited to, all accounts, instruments,
documents, notes, claims, choses in action, money, contract
rights, general intangibles (including, but not limited to, good
will, tax refunds, copyrights, trademarks, trademark applications,
trade styles, trade names, patents and patent applications),
securities, stock, chattel paper, credits, license agreements,
inventory (including, but not limited to, raw materials,
work-in-process, semi-finished and finished goods, returned goods,
in transit goods, goods under letters of credit or trust receipts
and bill and hold goods), leases with respect to both real and
personal property, demands, security deposits, bank accounts,
machinery and equipment (whether or not attached or affixed to
real property), furniture, fixtures, tools, dies, molds, jigs,
blueprints, customer lists, motor vehicles, and any other real and
personal property, rights and interests of Borrower and the
proceeds (including any insurance proceeds), products and
accessions of and to any thereof, and all books and records
pertaining to all of the foregoing; and

b. all personal property of Borrower which is or shall be financed by
Bank or is in, or shall come into the possession or control of
Bank, including without limitation, inventory, goods, documents
(including any documents made available to Borrower pursuant to
trust receipts or other security agreements ) and present or
future accounts receivable resulting from the sale of goods, the
purchase of which was financed by Bank or for which Bank has made
advances; and the products and proceeds thereof, together with all
improvements and additions thereto whether same be cash, accounts,
chattel paper, instruments, notes, drafts, acceptances, contract
rights or general intangibles.

<PAGE> 2

4. "Event of Default" shall mean and include the occurrence or existence of
any event or condition described in Section E hereof.

5. "Financing Agreements" shall mean and include the agreements described on
Exhibit A hereto, all amendments and supplements thereto, and all other
agreements, documents, instruments and guaranties granting collateral
security or creating or evidencing indebtedness, executed by Borrower or
its subsidiaries, affiliates or guarantors in favor of Bank, together with
all present and future agreements, supplements or instruments relating
thereto, as all of the foregoing may now exist or may hereafter be
amended, modified or supplemented.

6. "Obligations" shall mean and include any and all indebtedness, liabilities
and obligations of every kind, nature and description of Borrower to Bank,
however evidenced, whether arising under the Financing Agreements, this
Agreement or otherwise, whether now existing or hereafter arising, whether
direct or indirect, absolute or contingent, joint and/for several, due or
not due, primary or secondary, liquidated or unliquidated, secured or
unsecured, or on original, renewed or extended terms and whether arising
directly or acquired by Bank from any other entity outright, conditionally
or as collateral security, by assignment, by merger with any other entity,
by assumption, by subrogation, by operation of law or otherwise
(including, without limitation, Bank participations or interests of Bank
in the obligations of Borrower to others), including, but without limiting
the generality of the foregoing, indebtedness, obligations or liabilities
of Borrower to Bank as member of any partnership, syndicate, association
or other group, principal, interest, fees and whether incurred by Borrower
as principal, surety, endorser, guarantor, accommodation party, indemnitor
or otherwise; provided, however, that the term "Obligation" shall not
include or be deemed to include any indebtedness of Borrower to Bank which
is, at the time of its creation, subject to the provisions of any state or
federal consumer credit or truth-in-lending disclosure statute or
regulation, nor shall the term "Obligation" include or be deemed to
include any indebtedness of Borrower to Bank which does not arise under
the Financing Agreements and which is secured by real property, unless the
note or other evidence of such indebtedness specifically states that it is
secured by the security interests granted in this Agreement.

7. "Obligor" shall mean and include any guarantor, co-maker, endorser,
acceptor, surety or other person or entity liable on the Obligations in
addition to the Borrower.

B. GRANT OF SECURITY INTEREST.

1. To secure payment, performance and observance in fu11 of all Obligations,
Borrower hereby grants to Bank a continuing security interest in, a lien
upon, and a right of set-off against, and Borrower hereby assigns,
transfers, pledges and sets over to Bank all of the Collateral. All
Collateral shall be security for the payment, performance and observance
of all Obligations notwithstanding the maintenance of separate accounts by
Bank or the existence of any instruments evidencing any of the
Obligations.

2. Borrower hereby constitutes Bank and any designee of Bank as Borrower's
attorney-in-fact and authorizes Bank or such designee, at Borrower's sole
cost and expense, to exercise at any time or times in Bank's discretion
all or any of the following powers, at the sole expense of Borrower, which
power-of-attorney being coupled with an interest shall be irrevocable
until all Obligations have been paid in full: (a) receive, take, endorse,
assign, deliver, accept, and deposit, in the name of Bank or Borrower, any
and all cash, checks, commercial paper, drafts, remittances and other
instruments and documents relating to the Collateral, (b)

<PAGE> 3

receive, open and dispose of all mail addressed to Borrower and notify postal
authorities to change the address for delivery thereof to such address as Bank
may designate, (c) transmit to account debtors and any bailees notice of the
interest of Bank in the Collateral or request from account debtors or such
bailees at any time, in the name of Borrower or Bank or any designee of Bank,
information concerning the Collateral and any amount owing with respect thereto,
(d) notify account debtors to make payment directly to Bank, (e) take or bring,
in the name of Bank or Borrower, all steps, actions, suits or proceedings deemed
by Bank necessary or desirable to effect collection of the Collateral, (f) enter
Borrower's premises for the purpose of inspecting, verifying, auditing,
maintaining, preserving, protecting and removing the Collateral, (g) obtaining,
adjusting, compromising, settling and cancelling insurance policies on the
Collateral and any claims thereunder, and (h) execute in the name and on behalf
of Borrower one or more Uniform Commercial Code financing statements or
amendments with respect to the Collateral, naming Borrower as debtor and Bank as
secured party and indicating and describing therein the types and the items of
Collateral. Borrower hereby releases Bank, its officers, employees and designees
from any liability arising from any act or acts under such power-of-attorney or
otherwise under this Agreement, the Financing Agreements or in furtherance
hereof or thereof, whether by omission or commission, and whether based upon any
error of judgment or mistake of law or fact.

C. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants
to Bank the following, each of which is a continuing representation and
warranty, the continuing truth and accuracy of each of such representations and
warranties being a continuing condition of financing of Borrower by Bank:

1. If Borrower is a corporation, Borrower is a duly organized and validly
existing corporation in good standing under the laws of the jurisdiction
of its organization with perpetual corporate existence, and has the
corporate power and authority to own its properties and to transact the
business in which it is engaged or presently proposes to engage. Borrower
has qualified as a foreign corporation in all states or other
jurisdictions where the nature of its business or ownership or use of its
property requires such qualification and where the failure to so qualify
would have an adverse effect on the business of Borrower.

2. If Borrower is a corporation, Borrower has the corporate power to borrow
and to execute, deliver and perform the terms and provisions of this
Agreement, the Financing Agreements and all other instruments and
documents delivered by it pursuant hereto and thereto. Borrower has taken
or caused to be taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement, the Financing
Agreements and such other instruments and documents.

3. If Borrower is a partnership, Borrower is duly organized and existing
under the laws of its jurisdiction of organization, and the execution,
delivery and performance of this Agreement is within Borrower's powers.

4. This Agreement, the Financing Agreements and such other instruments and
documents constitute and will constitute legal, valid and binding
obligations of Borrower, enforceable in accordance with their respective
terms.

5. Borrower is not in default under any indenture, mortgage, deed of trust,
agreement or other instrument to which it is a party or by which it or its
properties may be bound. Neither the execution and delivery by Borrower of
this Agreement, the Financing Agreements or any of the instruments and
documents to be delivered pursuant hereto or thereto, nor the consummation
of the transactions herein or therein contemplated, nor compliance with
the provisions hereof or thereof, will violate any law or regulation, or
any order or decree

<PAGE> 4

of any court or governmental instrumentality in any respect, or wilt
conflict with, or result in the breach of, or constitute a default under,
any indenture, mortgage, deed of trust, agreement, or other instrument to
which Borrower is a party or by which it or its properties may be bound,
or result in the creation or imposition of any lien, charge or encumbrance
upon any of the property of Borrower (except as contemplated hereunder) or
violate any provision of the Articles of Incorporation, Bylaws or other
organizational documents of Borrower.

6. Borrower is in compliance with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority relating to
its business as presently conducted or contemplated, including, without
limitation, all licensing and approval requirements, the Employee
Retirement Income Security Act of 1974, as amended, and the Internal
Revenue Code of 1954, as amended.

7. No action of, or filing with, any governmental or public body or authority
(other than the filing or recording of Uniform Commercial Code financing
statements or other documents evidencing security interests and liens of
Bank) is required in connection with the execution, delivery and
performance of this Agreement, the Financing Agreements or any of the
instruments or documents to be delivered pursuant hereto or thereto.

8. There is no investigation by any governmental agency pending or threatened
against Borrower and there is no action, suit, proceeding or claim pending
or threatened against Borrower or its assets or goodwill, or against or
affecting any transactions contemplated by this Agreement, the Financing
Agreements or other instruments or documents related hereto, which if
adversely determined with respect to it would result in any material
adverse change in its business, properties, assets, goodwill or condition,
financial or otherwise.

9. None of the information contained in the representations and warranties
made by Borrower set forth in this Agreement, the Financing Agreements or
in any other instruments, documents, list, certificate, statement,
financial statements, schedule or exhibit heretofore delivered or to be
delivered to Bank, as contemplated herein or therein, contains or will
contain any untrue statement of a material fact or omits or will omit to
state a fact necessary in order to make the statements contained herein or
therein not misleading.

10. The principal place of business and chief executive office and the records
of Borrower are maintained at the address set forth in Schedule I annexed
hereto, which address is a mailing address for such principal place of
business and chief executive office. All of the Collateral is kept at the
locations set forth on Schedule I annexed hereto, which are the only
premises of Borrower. Borrower does not use any trade styles, trade names
or fictitious corporate names except as set forth in Schedule I hereto.

11. The security interest and liens granted by Borrower to Bank under this
Agreement constitute valid and perfected first priority security interests
in and liens upon the Collateral, subject only to the liens and security
interest set forth in Schedule II annexed hereto.

12. Borrower has good and marketable title to all of its properties and assets
subject to no liens, mortgages, pledges, security interests, encumbrances
or charges of any kind, except in favor of Bank and as set forth in
Schedule II annexed hereto.

13. After giving effect to the transactions contemplated by this Agreement,
the Financing Agreements and any and all other instruments or documents
delivered in connection herewith or therewith, there does not exist at the

<PAGE> 5

date hereof any condition or event which constitutes an Event of Default
hereunder or which after notice or lapse of time, or both, would constitute such
an Event of Default hereunder.

D. COVENANTS. Borrower covenants and agrees that from and after the date of
this Agreement, until the Obligations are fully and indefeasibly satisfied:

1. At any time and from time to time, upon the demand of Bank, Borrower shall
deliver and pledge to Bank, duly endorsed and/or accompanied by such
instruments of assignment and transfer in such form and substance as Bank
may reasonably request, any and ad instruments, documents, securities
and/or chattel paper which are included in the Collateral as Bank may
request.

2. Borrower shall not, without the prior written consent of Bank, assign,
sell, mortgage, lease, transfer, set over, pledge, grant any security
interest in or lien upon, encumber, or otherwise dispose of or abandon any
of its real or personal property, whether now owned or hereafter acquired,
nor will Borrower permit any such lien, encumbrance or disposition to
exist or occur with respect to such property, except for (a) the sale from
time to time in the ordinary course of business of such property as may
constitute inventory of Borrower, (b) the existing liens set forth in
Schedule II annexed hereto; (c) tax, mechanic's and other like liens
arising in the ordinary course of business securing obligations which are
not overdue or (unless or until foreclosure or other similar proceedings
shall have commenced) are being contested in good faith by appropriate
proceedings and are adequately reserved against in the opinion of Bank;
and (d) liens, encumbrances and security interests in favor of Bank.

3. Borrower shall not directly or indirectly sell, lease, transfer, abandon
or otherwise dispose of all or any substantial portion of its property or
assets or consolidate with or merge with or into any other entity, or
permit any other entity to consolidate with or merge with or into
Borrower, except with the prior written consent of Bank.

4. Borrower shall not change its name or principal place of business and
chief executive office or any of the locations of Collateral, as set forth
in Schedule I annexed hereto, without the prior written consent of Bank;
and prior to any such change to which Bank so consents, Borrower agrees to
execute and deliver or cause to be delivered to Bank, any additional
documents, instruments and agreements, including, without limitation,
financing statements, waivers and subordinations, as Bank may request.

5. Borrower shall at all times (a) preserve, renew and keep in full force and
effect its existence as a corporation and its rights and franchises with
respect thereto, (b) continue to engage in business of the same type as it
is now engaged, and (c) maintain in full force and effect all permits,
licenses, trademarks, trade names, approvals, authorizations, leases and
contracts necessary to carry on its business as the same is being operated
as of the date hereof

6. Borrower shall maintain and safeguard any and all documents, instruments
and chattel paper in its possession and its individual books and records
relating to the Collateral in a commercially reasonable manner and cause
the security interest granted herein to Bank to be marked thereon.

7. Borrower shall permit representatives of Bank at any time during normal
business hours or upon twenty-four (24) hours prior notice at any time to
(a) inspect its inventory, equipment and other tangible Collateral, (b)
have

<PAGE> 6

free access to and right of inspection of any papers, instruments and
records pertaining to any of the Collateral, and (c) make abstracts or
photocopies, at Borrower's sole cost and expense, from or of Borrower's
books and records pertaining to inventory, accounts, contract rights,
chattel paper, instruments, documents, and other Collateral.

8. Borrower shall at all times maintain, with financially sound and reputable
insurers acceptable to Bank, insurance with respect to the Collateral for
not less than its full market value and against all risks to which it is
exposed, including, without limitation, fire, explosion, theft and such
other casualties as are customarily insured against by companies engaged
in the same or similar business as that of Borrower. All policies shall be
in such form substance, amounts and coverage as shall be satisfactory to
Bank and shall provide for not less than ten (10) days' prior written
cancellation notice to Bank. Bank may act as attorney for Borrower in
obtaining, adjusting, compromising, settling and cancelling such insurance
and any claims thereunder. Borrower shall promptly (a) obtain endorsements
to all existing and future insurance policies with respect to the
Collateral specifying that the proceeds of such insurance shall be payable
to Bank and Borrower as their interests may appear and further specifying
that Bank shall be paid notwithstanding any act or omission by Borrower;
and (b) deliver to Bank an original executed copy of, or executed
certificate of the insurance carrier with respect to, such endorsement
and, at Bank's request, the original or a certified duplicate original of
each underlying insurance policy. At its option, Bank may apply any
insurance monies received by Bank at any time to the cost of repairs or
replacement of Collateral and/or to payment of the Obligations, whether or
not due, in any order and in such manner as Bank at its sole discretion
may determine.

9. Borrower shall use, maintain and protect, for lawful purposes only, the
Collateral, with all reasonable care and in conformity with all applicable
laws, ordinances, regulations and insurance policies.

10. Borrower shall promptly pay when due all taxes, assessments and
governmental charges or levies imposed upon the Collateral or for its use
or operation or upon the proceeds thereof or upon any instrument
evidencing the Obligations, as well as claims of any kind against the
Collateral (including claims for labor, materials and supplies) unless
such taxes, assessments, charges, levies or claims are being contested in
good faith and are adequately reserved for in the opinion of Bank.

11. At its option, Bank may discharge taxes, liens or security interests or
other encumbrances or charges at any time levied or placed on the
Collateral and may pay for the insurance, maintenance and preservation of
Collateral. Borrower agrees to reimburse Bank on demand, together with
interest thereon at the rate specified in the Financing Agreements, for
any payment made or expense incurred by Bank in connection with the
foregoing or otherwise under this Agreement, and any such payment or
expense shall constitute a part of the Obligations secured hereby.

12. If all or any part of the Collateral is or is about to become affixed to
realty, Borrower shall, at Bank's request, furnish Bank with a writing
executed by the owner and mortgagee of the realty whereby the owner and
mortgagee subordinates its rights and priorities to Bank's interest in the
Collateral. If the Collateral is or may become subject to a landlord's
lien, Borrower shall, at Bank's request, furnish Bank with a landlord's
waiver satisfactory in form and substance to Bank.

13. Borrower shall, at the request of Bank, at any time and from time to time,
at Borrower's sole cost and expense, give, execute, deliver, file and/or
record any notice, statement, instrument, document, agreement or other

<PAGE> 7

papers which may be necessary or desirable in Bank's opinion to create,
preserve, perfect or validate any security interest or lien granted
pursuant to this Agreement, any of the Financing Agreements or any other
agreement between Borrower and Bank or to enable Bank to exercise and
enforce its rights hereunder or with respect to such security interest or
lien. Bank is irrevocably authorized, at Bank's discretion, to execute in
the name and on behalf of Borrower one or more Uniform Commercial Code
financing statements, naming Borrower as debtor and Bank as secured party
and describing therein the items and types of Collateral and to file same
in any jurisdiction in which any of the Collateral is or may hereafter be
located. Bank, at its discretion, may file a carbon, photographic or
other reproduction of this Agreement or any other security agreement
between Borrower and Bank as a Uniform Commercial Code financing
statement in any jurisdiction in which any of the Collateral is or may
hereafter be located.

14. Borrower shall pay Bank on Bank's demand, any and all sums, costs and
expenses which Bank may pay or incur in connection with the preparation
and negotiation of this Agreement, the Financing Agreements and any
related agreements or instruments, together with any amendments or
supplements hereto or thereto, or in defending, protecting or enforcing
the security interest granted herein or in defending, collecting or
attempting to collect the Obligations; or which may otherwise be paid or
incurred by Bank in connection with the provisions hereof, including,
without limitation, all search, filing and recording fees, taxes,
attorneys' fees, legal expenses and all fees and expenses for the service
and filing of papers, marshals, sheriffs, custodians, auctioneers and
others, and all court costs and collection charges, all of which shall be
part of the Obligations.

15. Borrower shall promptly notify Bank in writing of the details of (a) any
loss, damage, investigation, action, suit, proceeding or claim relating
to the Collateral or which would result in any material adverse change in
Borrower's business, properties, assets, goodwill or condition, financial
or otherwise, and (b) the occurrence of any Event of Default or event
which, with the passing of time or giving of notice or both, would
constitute an Event of Default.

E. EVENTS OF DEFAULT. At the option of Bank, all Obligations shall be and
become immediately due and payable, without notice or demand, upon the
occurrence or existence of any one or more of the following events:

1. Borrower shall fail to pay or perform when due any of the Obligations or
shall breach any of the terms, covenants, conditions or provisions
contained in this Agreement, the Financing Agreements or any other
agreement between Bank and Borrower.

2. Any representation, warranty or statement of fact made to Bank by Borrower
or any Obligor is false or misleading at any time, whether made in this
Agreement, the Financing Agreements, any other agreement or otherwise.

3. A default or event of default with respect to any of the Financing
Agreements or any other agreement, document or instrument executed by
Borrower in favor of Bank.

4. Any Obligor shall terminate, attempt to terminate or breach any of the
terms, covenants, conditions or provision of any guarantee, endorsement,
subordination or other agreement of such Obligor in favor of Bank, or any
guarantee or subordination required by Bank becomes ineffective.

<PAGE> 8

5. Any judgment, injunction or attachment is obtained against Borrower or any
Obligor in any court; or any proceeding, procedure or remedy supplementary
to or in enforcement of any judgment shall be commenced against, or with
respect to any property of, Borrower or any Obligor.

6. Borrower or any Obligor (who is a natural person or a general partner of
any Borrower or Obligor which is a partnership) shall die, or Borrower or
any Obligor (which is a partnership or corporation) shall be dissolved, or
Borrower or any Obligor which is a corporation shall fail to maintain its
corporate existence in good standing, or the usual business of Borrower or
any Obligor shall be substantially terminated or suspended.

7. Borrower or any Obligor shall breach any other material agreement by which
it is bound, including, without limitation, any agreement relating to the
borrowing of money.

8. Borrower or any Obligor shall become insolvent (however defined or
evidenced), make an assignment for the benefit of creditors, make or send
notice of a bulk transfer, or call a meeting of its creditors or principal
creditors; or any petition or application for any relief under the
bankruptcy laws of the United States now or hereafter in effect or under
any insolvency, arrangement, reorganization, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction now or
hereafter in effect (whether at law or in equity) is filed by or against
Borrower or any Obligor; or any petition or application to any court or
tribunal, at law or in equity, shall be filed by or against Borrower or
any Obligor for the appointment of a receiver or trustee for all or any
part of its property.

9. In the good faith opinion of Bank there is a material adverse change in
the condition, financial or otherwise, of any Obligor, or for any reason
Bank in good faith believes that the prospect of payment or performance of
the Obligations has been impaired or is insecure.

F. RIGHTS AND REMEDIES. Upon the occurrence of any Event of Default and at
any time thereafter, in addition to all other rights and remedies of Bank,
whether provided under the Uniform Commercial Code or other applicable law, this
Agreement, the Financing Agreements or otherwise, Bank shall have the following
rights and remedies which may be exercised, at Bank's discretion, at any time or
times with or without judicial process, with or without the assistance of others
and without notice to or consent by Borrower except as such notice or consent is
expressly prodded for hereunder or required by law.

1. Bank may, at its discretion, accelerate payment of all Obligations and
demand immediate payment thereof to Bank.

2. Bank, at its discretion and without limitation, may enter upon any
premises on or in which the Collateral may be located and take possession
thereof and remove all or any of the Collateral from such premises for the
purposes of effecting the sale, foreclosure or other disposition thereof
or for any other purpose. Borrower shall, at the request of Bank assemble
the Collateral at such place or places as Bank designates in its request.
Bank shall have the right to take possession of the Collateral or any
portion thereof pursuant to the Uniform Commercial Code or other
applicable law. In the event Bank institutes an action to recover any
Collateral, or seeks recovery of any Collateral by way of prejudgment
remedy, Borrower waives the posting of any bond which might otherwise be
required.

<PAGE> 9

3. Bank may, at its discretion and without limitation, (a) collect,
foreclose, receive, appropriate, set off and realize upon any and all
Collateral, or (b) sell, lease, transfer, assign, deliver or otherwise
dispose of any and all (collateral (including, without limitation,
entering into contracts with respect thereto and by public or private
sales at any exchange, broker's board, premises of Borrower, office of
Bank or elsewhere) at such prices or terms as Bank may deem reasonable,
for cash, upon credit or for future delivery, with Bank having the right
to purchase the whole or any part of the Collateral at any such public
sale, all of the foregoing being free from any right or equity of
redemption of Borrower, which right or equity or redemption is hereby
expressly waived and released by Borrower. If any of the Collateral is
sold or leased by Bank upon credit terms or for future delivery, the
Obligations shall not be reduced as a result thereof until indefeasible
payment therefor is finally collected by Bank. Ten (10) days prior notice
by Bank to Borrower designating the time and place of any public auction
of Collateral or the time after which any private sale or other
disposition of Collateral may take place shall be deemed to be reasonable
notice thereof, and Borrower waives any other notice.

4. Bank may apply the cash proceeds of collateral actually received by Bank
from any sale, lease, foreclosure or other disposition of the Collateral
to payment of (a) all costs and expenses of every kind or nature incurred
or paid by Bank in connection therewith, including, without limitation,
reasonable attorneys' fees and a reasonable estimate of the allocated cost
of Bank's in-house counsel and legal staff, and (b) all and any of the
other Obligations, in whole or in part and in such order as Bank may
elect, whether then due or not due. Borrower shall be liable to Bank for
the payment on demand of all such costs and expenses and any deficiency
with interest at the rate set forth in the Financing Agreements, together
with any reasonable attorneys' fees if placed with an attorney for
collection or enforcement. The costs and expenses incurred or paid by Bank
with respect to any sale, lease, foreclosure or other disposition of the
Collateral may include, without limitation, (i) expenses of retaking,
holding, assembling, preparing for sale or lease, advertising, storing,
repairing, completing, selling, leasing, foreclosing or otherwise
disposing of the Collateral, (ii) premiums on bonds and undertakings,
(iii) sales, use and other taxes, (iv) fees and expenses of custodians,
warehousemen, brokers, appraisers, auctioneers, sheriffs and others, (v)
legal expenses and attorneys' fees (vi) travel and hotel expenses, (vii) a
reasonable estimate of the allocated cost of Bank's in-house counsel and
legal staff and (viii) all other expenses which may be incurred or paid by
Bank in attempting to collect the Obligations and to foreclose upon the
Collateral.

5. Bank shall have the right, at any time or times, to set off against the
Obligations all money owed by Bank in any capacity to Borrower or any
Obligor, whether or not due.

6. Bank shall have the right at its sole discretion to determine which rights
and remedies and in which order any of the same are to be exercised, and
Bank may at any time pursue, relinquish, subordinate, modify or take any
other action with respect thereto, without in any way modifying or
affecting any of the Obligations. Bank may, at any time or times, proceed
directly against Borrower or any Obligor to enforce payment of the
Obligations and shall not be required to take any action of any kind to
preserve, collect or protect Bank's or Borrower's rights in the
Collateral.

7. All rights, remedies, powers and benefits granted to Bank by Borrower or
any Obligor under this Agreement, the other Financing Agreements or any
oral or other written agreement, or granted by applicable law, whether
expressly granted or implied in law, are cumulative, not exclusive and
enforceable alternatively, successively, or concurrently on any one or
more occasions and shall include, without limitation, the right to apply
to a court of

<PAGE> 10

equity for an injunction to restrain a breach or threatened breach by
Borrower or any Obligor of this Agreement, the Financing Agreements or
such other agreements.

G. MISCELLANEOUS.

1. Notwithstanding that Bank, whether on its own behalf and/or on behalf of
others, may continue to hold Collateral, and regardless of the value
thereof, Borrower and each Obligor shall be and remain jointly and
severally liable for the payment in full, including principal and
interest, of any balance of the Obligations and expenses hereunder at any
time unpaid.

2. Borrower hereby expressly waives demand, presentment, protest, notice of
protest and notice of dishonor with respect to any and all instruments and
commercial paper included in or evidencing any of the Obligations or the
Collateral, and any and all other demands and notices of any kind or
nature whatsoever with respect to the Obligations, the Collateral, this
Agreement and the Financing Agreements, except such as are expressly
provided for herein or therein.

3. Bank shall not, by any act, delay, omission or otherwise be deemed to have
expressly or impliedly waived any of its rights, powers and/or remedies
unless such waiver shall be in writing and signed by an authorized
officer of Bank. Any such waiver shall be enforceable only to the extent
specifically set forth therein. A waiver by Bank of any default, right,
power and/or remedy on any one occasion shall not be construed as a bar to
or waiver of any such default, right, power and/or remedy which Bank would
otherwise have on any future occasion, whether similar in kind or
otherwise.

4. Neither this Agreement nor any provision hereof shall be amended, modified
or discharged orally or by course of conduct, but only by a written
agreement signed by an authorized officer of Bank expressly referring to
this Agreement and to the provision so amended, modified or discharged.

5. EACH OF BORROWER AND BANK WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING INSTITUTED BY EITHER OF THEM AGAINST THE OTHER WHICH
PERTAINS DIRECTLY OR INDIRECTLY TO THIS AGREEMENT, THE FINANCING
AGREEMENTS, THE OBLIGATIONS, THE COLLATERAL OR ANY MATTER ARISING
THEREFROM OR RELATING HERETO OR THERETO.

6. Borrower waives all rights to interpose any vetoes or counterclaims of any
nature in any action or proceeding instituted by Bank with respect to this
Agreement, the Financing Agreements, the Obligations, the Collateral or
any matter arising therefrom or relating hereto or thereto.

7. BORROWER HEREBY IRREVOCABLY SUBMITS AND CONSENTS TO THE JURISDICTION OF
THE SUPREME COURT OF THE STATE OF NEW YORK, IN THE COUNTY OF NEW YORK, AND
THE UNITED STATES DISTRICT COURT FOR TO SOUTHERN DISTRICT OF NEW YORK IN
CONNECTION WITH ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE FINANCING AGREEMENTS, THE OBLIGATIONS, THE COLLATERAL
OR ANY DOCUMENT OR INSTRUMENT DELIVERED PURSUANT HERETO OR THERETO. IN ANY
SUCH LITIGATION BORROWER WAIVES PERSONAL SERVICE OF THE SUMMONS AND
COMPLAINT OR OTHER PROCESS AND PAPERS ISSUED THEREIN AND AGREES THAT THE

<PAGE> 11

SERVICE THEREOF MAY BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO
BORROWER AT ITS CHIEF EXECUTIVE OFFICE SET FORTH HEREIN OR OTHER ADDRESS
THEREOF OF WHICH BANK HAS RECEIVED NOTICE AS PROVIDED HEREIN. WITHIN
THIRTY (30) DAYS AFTER SUCH MAILING, BORROWER SHALL APPEAR OR ANSWER TO
SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS.

8. All notices, requests and demands hereunder shall be (a) made to Bank at
its address set forth above and to Borrower at its chief executive office
set forth below, or to such other address as either party may designate by
written notice to the other in accordance with this provision, and (b)
deemed to have been given or made, if by hand, immediately upon delivery;
if by telex or telegram, immediately upon sending; if by Federal Express,
Express Mail or other overnight delivery service, one day after dispatch;
and if by ordinary or certified mail, return receipt requested, five (5)
days after mailing.

9. If any provision of this Agreement is held to be invalid or unenforceable,
such invalidity or unenforceability shall not invalidate this Agreement as
a whole, but this Agreement shall be construed as though it did not
contain the particular provision held to be invalid or unenforceable, and
the rights and obligations of the parties shall be construed and enforced
only to such extent as shall be permitted by applicable law.

10. Under no circumstances shall Bank be deemed to have assumed any
responsibility for or obligation or duty of any nature or kind with
respect to any Collateral, or any matter or proceedings arising out of or
relating thereto, but the same shall be at the sole risk of Borrower at
all times. Borrower hereby releases Bank from any claims, causes of action
and demands at any time arising out of, relating to or with respect to
this Agreement, the Financing Agreements, the Obligations, the Collateral
and/or any actions taken or omitted to be taken by Bank with respect
thereto, and Borrower hereby agrees to indemnify and hold Bank harmless
from and with respect to any and all such claims, causes of action and
demands by any person or entity.

11. This Agreement shall be binding upon and inure to the benefit of each of
the parties hereto and their respective successors and assigns, except
that any obligation of Bank under this Agreement or the Financing
Agreements shall not be assignable nor inure to the successors and assigns
of Borrower.

12. The provisions of this Agreement shall be construed and interpreted and
all rights and obligations hereunder determined in accordance with the
laws of the State of New York except to the extent that the law of any
other jurisdiction is required to be applied with respect to the
enforcement of Bank's rights in Collateral located in such jurisdiction.

IN WITNESS WHEREOF, Borrower has executed this Agreement as of this 23 day of
June, 1995.

JLM International, Inc.

By:/s/ By:
---------------------------- ----------------------------
Title: V.P. & CFO Title:

<PAGE> 12

EXHIBIT A
FINANCING AGREEMENTS

SCHEDULE I
LIST OF LOCATIONS OF BORROWER AND COLLATERAL

Chief Executive Office,
Principal Place of Business
and Locations of Records: Owner/LandLord

Other Locations:

Trade Styles, Trade Names and Fictitious Corporate Names

SCHEDULE II
LIST OF EXISTING LIENS OR COLLATERAL

Secured Creditor Amount Secured Collateral

<PAGE> 1
EXHIBIT 10.26

AGREEMENT ("Agreement") dated as of May 7, 1997 by and among UNION CARBIDE
CORPORATION, a New York corporation formerly known as Union Carbide Chemicals
and Plastics Company Inc. ("UCC") with offices at 39 Old Ridgebury Road,
Danbury, Connecticut 06817; D-S SPLITTER, INC., a Delaware corporation ("D-S")
with offices at 9830 Colonnade Boulevard, San Antonio, Texas 78230; JLM
INDUSTRIES, INC., a Delaware corporation ("JLM") with offices at 8675 Hidden
River Parkway, Tampa, Florida 33637; and OLEFINS TERMINAL CORPORATION, a
Delaware corporation (the "OTC") with offices at Houston, Texas. UCC, D-S and
JLM are sometimes referred to herein collectively as the "Note Purchasers".

W I T N E S S E T H:

WHEREAS, UCC, D-S, JLM, and OTC entered into a Note, Stock and Warrant
Purchase Agreement dated August 15,1991 (hereinafter called the "Purchase
Agreement") pursuant to which D-S and JLM purchased shares of common stock of
OTC, UCC purchased a warrant for the purchase of shares of common stock of OTC
and the Note Purchasers purchased subordinated notes of OTC;

WHEREAS, OTC on August 15, 1991 entered into a Credit Agreement (the
"Credit Agreement") with Bank of America National Trust and Savings Association
("Bank of America") as Agent for the Banks (as such term is defined therein)
(the "Agent,") under which the Agent agreed to make available to OTC a term
credit facility and a debt service facility (together, the "Credit Facility");

WHEREAS, The Company used the proceeds from such purchases and from the
Credit Facility to finance the development and construction of a polymer grade
propylene storage and terminal facility (the "Facility") located at Seabrook,
Texas on property owned by Baytank (Houston), Inc.;

WHEREAS, in connection with the Credit Facility, D-S, UCC and JLM entered
into the Support Agreement dated August 15, 1991 (the "Support Agreement") for
the benefit of OTC and Bank of America pursuant to which D-S, UCC and JLM each
agreed to invest in OTC certain additional amounts to be used to fund repayment
of OTC's obligations under the Credit Agreement;

WHEREAS, OTC proposes to refinance and repay in obligations under the
Credit Facility;

WHEREAS, D-S, UCC, JLM, OTC and Bank of America have agreed that in
connection with OTC's repayment of the Credit Facility the Purchased Note of OTC
held by UCC will be repaid in full by OTC, the warrant for shares of OTC common
stock held by UCC will be returned to OTC and be canceled, UCC's obligations
under

<PAGE> 2

the Support Agreement will be terminated and extinguished and UCC will receive
the transferable and assignable right to use the Facility for up to 100,000
metric tons of throughput of polymer grade propylene; and

WHEREAS, all the parties wish to enter into this Agreement to provide for
the foregoing;

NOW, THEREFORE, the parties agree as follows:

1. Definitions
Unless otherwise defined herein, all terms with initial capitalization
shall have the meanings given to them in the Purchase Agreement, a copy of
which is attached hereto as Exhibit "A".

2. Repayment of UCC's Note
Notwithstanding the provisions of the Purchase Agreement including,
but not limited to Section 2 thereof, OTC shall, on or before May 13, 1997,
pay UCC the face amount of the Purchased Note which it purchased pursuant
to the Purchase Agreement plus accrued interest thereon as specified In the
Purchased Note in the total amount of US $2,200,000 and UCC shall
thereafter surrender its Purchased Note to OTC by depositing same with a
reputable air courier company for delivery to OTC.

3. The Warrant
On or before May 13, 1997, OTC and D-S shall execute the Terminal
Agreement in the form attached hereto as Exhibit B together with the
appended Pipeline Agreement pursuant to which UCC shall receive the
transferable and assignable right to use the Facility for up to 100,000
metric tons of throughput and UCC shall surrender the Warrant to OTC by
depositing same with a reputable air courier company for delivery to OTC.

4. UCC's SUPPORT OBLIGATIONS
In consideration of UCC's undertakings pursuant to Articles 2 and 3
hereof, OTC shall cause UCC's obligations under the Support Agreement to be
totally and fully extinguished by execution by Bank of America of a release
in a form acceptable to UCC and delivery thereof to UCC on or prior to May
13, 1997.

5. Payment to Olefins Marketing
Upon receipt by UCC of the sum of $2.2 MM and a fully executed
original of the Terminal Agreement and of the appended Pipeline Agreement,
UCC shall pay to Olefins Marketing Inc. the sum of $100,000 as provided in
the Settlement Agreement of the OMI/UCC litigation dated September 12,1996.

<PAGE> 3

6. INDEMNIFICATION

JLM, D-S, and OTC (for purposes of this Article the "Indemnitors")

(a) hereby waive any claims against UCC resulting from or arising out
of, and

(b) shall jointly and severally defend, indemnify and hold harmless
UCC from and against

any and all liability, loss, damage, expense, including attorneys fees,
causes of action, suits, claims or judgments, of any nature whatsoever,
resulting from or arising out of the incorporation, financing,
refinancing, operations or business or other activities of OTC, including
but not limited to any alleged liabilities pursuant to the Purchase
Agreement, the Warrant-holders/Stockholders Agreement, the Support
Agreement and the Terminal and Service Agreement and Indemnitors shall
defend or settle at their own expense any suit or action which may be
brought against UCC with respect to any such claim or liability; provided,
however, that UCC shall have given prompt notice in writing to Indemnitors
of any claim and of the bringing, or any written threat of the bringing of
any such suit or action, and shall permit Indemnitors by their counsel to
defend or settle the same; and, provided, further, that UCC shall not
settle or compromise any such suit or action without the prior written
consent of Indemnitors.

IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the date first above written.

UNION CARBIDE CORPORATION JLM INDUSTRIES, INC.

By:/s/ By:/s/
----------------------------- --------------------------

Title:/s/ Title:/s/
-------------------------- -----------------------

OLEFINS TERMINAL CORPORATION D-S SPLITTER, INC.

By:/s/ By:/s/
----------------------------- --------------------------

Title:/s/ Title:/s/
-------------------------- -----------------------

<PAGE> 1
EXHIBIT 10.27

PLEDGE AND SECURITY AGREEMENT

PLEDGE AND SECURITY AGREEMENT, effective as of May 1, 1997, made by JLM
Industries, Inc., a Delaware corporation ("Pledgor") to Ultramar Diamond
Shamrock Corporation, a Delaware corporation ("UDSC").

W I T N E S S E T H

WHEREAS, UDSC and Olefins Terminal Corporation a Delaware corporation
("Borrower") and Bank of America Illinois are parties to a Credit Agreement,
effective as of May 1, 1997 (as amended, modified or supplemented from time to
time, the "Credit Agreement"), pursuant to which UDSC has unconditionally
guaranteed the obligations of Borrower (the "Guaranty"); and

WHEREAS, Pledgor is the legal and beneficial owner of certain of the issued and
outstanding shares of capital stock of Borrower (such shares being described in
Schedule 1 annexed hereto and, together with any stock options or rights
received pursuant to Section 3 of this Agreement, being hereinafter sometimes
referred to as the "Pledged Stock"); and

WHEREAS, it is a condition precedent to the commitment of UDSC to execute the
Guaranty of the Borrower's obligations under the Credit Agreement that Pledgor
and D-S Splitter, Inc., the sole Stockholders of Borrower, shall make additional
cash investments in Borrower, as provided in that certain Management Operating
and Stockholders Agreement of even date (the "Support Obligation") and that
Pledgor shall have executed and delivered this Agreement to UDSC to secure its
Support Obligation;

NOW, THEREFORE, in consideration of the premises and in order to induce UDSC to
deliver its Guaranty of the Credit Agreement and for other good and valuable
consideration, receipt of which is hereby acknowledged, Pledgor hereby agrees
with UDSC as follows:

1. Pledge. Pledgor hereby pledges, assigns, hypothecates, transfers, and
delivers all the Pledged Stock owned by it and hereby grants to UDSC a
first lien on, and security interest in, the Pledged Stock owned by it and
in all proceeds thereof, together with appropriate undated stock Powers
duly executed in blank with respect to the Pledged Stock as collateral
security for (i) the prompt and complete payment when due of the Support
Obligation and (ii) the due and punctual payment and performance by
Borrower and Pledgor of all their respective obligations and liabilities
under, arising out of and in connection with the Credit Agreement, the
Support Obligation and this Agreement (all the foregoing being hereinafter
called the "Liabilities").

- 1 -

<PAGE> 2

2. Stock Dividends. Interest Distributions. etc. If, while this Agreement is
in effect, Pledgor shall become entitled to receive or shall receive any
stock certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital, or issued in connection
with any reorganization), option or rights, whether as an addition to, in
substitution of, or in exchange for any shares of any Pledged Stock owned
by it, or otherwise, Pledgor agrees to accept the same as UDSC's agent and
to hold the same in trust or behalf of and for the ratable benefit of UDSC
and to deliver the same forthwith to render in the exact form received,
with the endorsement of Pledgor where necessary and/or appropriate undated
stock powers duly executed in blank, to be held by UDSC, subject to the
terms hereof, as additional collateral security for the Liabilities. Any
sums paid upon or in respect of the Pledged Stock upon the liquidation or
dissolution of the issuer thereof shall be paid over to UDSC to be held by
it in trust as additional collateral security for the Liabilities; and in
case any distribution of capital shall be made on or in respect of the
Pledged Stock or any property shall be distributed upon or with respect to
the Pledged Stock pursuant to the recapitalization or reclassification of
the capital of the issuer thereof or pursuant to the reorganization
thereof, the property so distributed shall be delivered to the UDSC to be
held by it as additional collateral security for the Liabilities. All sums
of money and property so paid or distributed in respect of any Pledged
Stock which are received by the Pledgor thereof shall, until paid or
delivered to the UDSC, be held by Pledgor in trust as additional collateral
security for the Liabilities.

3. Collateral. All property at any time pledged with UDSC hereunder (whether
described herein or not) and all income therefrom and proceeds thereof, are
herein collectively sometimes called the "Collateral".

4. Cash Dividends; Voting Rights. Unless an Event of Default under the Credit
Agreement, the Support Obligation or the Agreement shall have occurred and
be continuing, Pledgor shall be entitled to receive all cash dividends paid
in respect of the Pledged Stock owned by it, to vote the Pledged Stock
owned by it and to give consents, waivers and ratifications in respect of
the Pledged Stock owned by it; that no vote shall be cast or consent,
waiver or ratification given or action taken which would impair the
Collateral or be inconsistent with or violate any provision of this Pledge
Agreement, the Credit Agreement, or the Guaranty.

5. Subrogation. Notwithstanding any payment or payments made by Pledgor
hereunder, or the receipt of any amounts by UDSC with respect to the
Collateral, or any set off or application of funds of Pledgor by UDSC,
Pledgor shall not be entitled to be subrogated to any of the rights of UDSC
against

- 2 -

<PAGE> 3

Borrower or any collateral security held by UDSC for the payment of the
Liabilities until all amounts owing to UDSC by Borrower on account of the
Liabilities are paid in full.

6. Rights of UDSC. UDSC shall not be liable for failure to collect or realize
upon the Liabilities or any collateral security or guarantee therefor, or
any part thereof, or for any delay in so doing nor shall it be under any
obligation to take any action whatsoever with regard thereto. Any or all
shares of the Pledged Stock held by UDSC hereunder may, if any event of
default of the Support Obligations has occurred and is continuing, without
notice, be registered in the name of UDSC or its nominee, and UDSC or its
nominee may thereafter without notice, exercise all voting and corporate
rights at any meeting of any corporation issuing any of the shares included
in the Pledged Stock and exercise any and all rights of conversion,
exchange, subscription or any other rights, privileges or options
pertaining to any shares of the Pledged Stock as if it were the absolute
owner thereof, including without limitation, the right to exchange at its
discretion, any and all of the Pledged Stock upon the merger,
consolidation, reorganization, recapitalization or other readjustment of
any corporation issuing any of such shares or upon the exercise by any such
issuer or UDSC of any right, privilege or option pertaining to any shares
of the Pledged Stock, and in connection therewith, to deposit and deliver
any and all of the Pledged Stock with any committee, depository, transfer
agent, registrar or other designated agency upon such terms and conditions
as it may determine, all without liability except to account for property
actually received by it, but UDSC shall have no duty to exercise any of the
aforesaid rights, privileges or options and shall not be responsible for
any failure to do so or delay in so doing.

7. Remedies. In the event that any portion of the Support Obligation has been
declared due and payable and Pledgor fails to make timely payment to
Borrower ("event of default"), UDSC, without demand of performance or other
demand, advertisement or notice of any kind (except the notice specified
below of time and place of public or private sale) to or upon Pledgor or
any other person (all and each of which demands, advertisements and/or
notices are hereby expressly waived), may forthwith collect, receive,
appropriate and realize upon the collateral, or any part thereof, and/or
may forthwith sell, assign, give option or options to purchase, contract to
sell or otherwise dispose of and deliver said Collateral, or any part
thereof, in one or more parcels at public or private sale or sales, at any
exchange, broker's board or at any of UDSC's offices or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without assumption
of any credit risk, with the right to UDSC upon any such sale or sales,
public or private, to purchase the whole or any part of said Collateral so
sold, free of any right or equity or redemption in Pledgor, which

- 3 -

<PAGE> 4

right or equity is hereby expressly waived or released. Pledgor agrees that
UDSC need not give more than ten days notice of the time and place of any
public sale or of the time after which a private sale or other intended
disposition is to take place and that such notice is reasonable
notification of such matters. No notification need be given to Pledgor if
it has signed after an event of default a statement renouncing or modifying
any right to notification of sale or other intended disposition. In
addition to the rights and remedies granted to it in this Agreement and in
any other instrument or agreement securing, evidencing or relating to any
of the Liabilities, UDSC shall have all the rights and remedies of a
secured party under the Uniform Commercial Code of the State of Texas.
Pledgor further agrees to waive and agrees not to assert any rights or
privileges which he may acquire under Section 9-1 12 of the Uniform
Commercial Code; provided, however, Pledgor shall not be liable for the
deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay all amounts to which UDSC is entitled,
and the fees of any attorneys employed by UDSC to collect such deficiency.

8. Representation, Warranties and Covenants of the Pledgor. Pledgor
represents and warrants that with the exception of the limitations and
restrictions imposed by the Stockholder's Agreement of even date by and
among Pledgor, D-S Splitter, Inc. and Borrower, (a) it is the legal record
and beneficial Owner of, and has good and marketable title to, the Pledged
Stock described in Schedule 1 hereto as being owned by it, subject to no
pledge, lien, mortgage, hypothecation, security interest, charge, option or
other encumbrance whatsoever, except the lien and security interest created
by this Agreement; (b) it has full power, authority and legal right to
pledge the Pledged Stock pledged by it pursuant to this Agreement; (c) all
the shares of the Pledged Stock pledged by it have been duly validly
issued, are fully paid and non-assessable; and (d) the pledge, assignment
and delivery of such Pledged Stock pursuant to this Agreement creates a
valid first lien on and a first perfected security interest in such share
of the Pledged Stock, and the proceeds thereof, subject to no prior pledge,
lien, mortgage, hypothecation, security interest, charge, option or
encumbrance or to any agreement purporting to grant to any third party a
security interest in the property or assets of such Pledgor which would
include the Pledged Stock. Pledgor covenants and agrees that it will defend
UDSC's right, title and security interest in and to the Pledged Stock and
the proceeds thereof against the claims and demands of all persons
whomsoever;

9. No Disposition, etc. Without the prior written consent of UDSC, Pledgor
agrees that it will not sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Collateral, nor will
it create, incur or permit to exist any pledge, lien, mortgage,
hypothecation, security interest, charge, option or any other encumbrance
with respect to any of the Collateral, or any interest

- 4 -

<PAGE> 5

therein, or any proceeds thereof, except for the lien and security interest
provided for by this Agreement. Without the prior written consent of UDSC,
Pledgor agrees that it will not vote to enable the issuer of the Pledged
Stock owned by Pledgor to, and will not otherwise permit such issuer to,
issue any stock or other securities of any nature in addition to or in
exchange or substitution for such Pledged Stock.

10. Private Sale Rights.

(a) Pledgor recognizes that UDSC may be unable to effect a public sale of
any or all the Pledged Stock by reason of certain prohibitions
contained in the Securities Act of 1933 as amended ("Securities Act")
and applicable state securities laws, but may be compelled to resort
to one or more private sales thereof to a restricted group or
purchasers who will be obliged to agree, among other things, to
acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Pledgor
acknowledges and agrees that any such private sale may result in
prices and other terms less favorable to the UDSC than if such sale
were a public sale and, notwithstanding such circumstances, agree that
any such private sale shall be deemed to have been made in a
commercially reasonable manner, UDSC shall be under no obligation to
delay a sale of any of the Pledged Stock for the period of time
necessary to permit, the issuer of such securities to register such
securities for public sale under the Securities Act, or under
applicable state securities laws, even if the issuer would agree to do
so.

(b) Pledgor further agrees to do or cause to be done all such other acts
and things as may be reasonably necessary to make such sale or sales
of any portion or all of the Pledged Stock owned by it valid and
binding and in compliance with any and all applicable laws,
regulations, orders, writs, injunctions, decrees or awards of any and
all courts, arbitrators or governmental instrumentalities, domestic or
foreign, having jurisdiction over any such sale or sales, all at
Pledgor's expense; provided, however, That the foregoing shall not be
construed as requiring that the Pledgor file any registration
statement or provide any other document or information not readily
available to it which may be required to register the Pledged Stock
under the Securities Act or obtain an exemption therefrom. Pledgor
further agrees that a breach of any of the covenants contained in this
paragraph 11 will cause irreparable injury to the UDSC, that UDSC has
no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this
paragraph shall be specifically enforceable against such Pledgor and
such Pledgor hereby waives and agrees not to assert any defenses
against an

- 5-

<PAGE> 6

action for specific performance of such covenants except for a
defense that no Event of Default has occurred under the Credit
Agreement.

11. Further Assurances. Pledgor agrees that at any time and from time to time
upon the written request of UDSC, Pledgor will execute and deliver such
further documents and do such further acts and things as UDSC may
reasonably request in order to effect the Purposes of this Agreement.

12. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

13. No Waiver; Cumulative Remedies. UDSC shall not by any act, delay, omission
or otherwise be deemed to have waived any of its rights or remedies
hereunder and no waiver shall be valid unless in writing, signed by UDSC,
and then only to the extent therein set forth. A waiver by UDSC of any
right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which UDSC would otherwise have on any future
occasion. No failure to exercise nor any delay in exercising on the part of
UDSC, any right, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.

The rights and remedies herein provided are cumulative and may be exercised
singly or concurrently, and are not exclusive of any rights or remedies
provided by law.

14. Waivers, Amendments; Applicable Law. None of the terms or provisions of
this Agreement may be waived, altered, modified or amended except by an
instrument in writing, duly executed by UDSC. This Agreement and all
obligations of Pledgor hereunder shall be binding upon the successors and
assigns of Pledgor, and shall, together with the rights and remedies of
UDSC hereunder, inure to the benefit of UDSC and its successors and
assigns. This Agreement shall be governed by, and be construed and
interpreted in accordance with, the laws of the State of Texas.

15. Termination. Upon the full performance of all obligations of the Borrower
under the Credit Agreement, the release of the Guaranty, and the pledge
under this Agreement (a) UDSC shall forthwith sign and deliver to the
Pledgor such of the Pledged Stock and any property received in respect
thereof, as has not

- 6 -

<PAGE> 7

theretofore been sold or otherwise applied pursuant to the provisions of
this Agreement and (b) this Agreement shall terminate and UDSC shall, at
such time, execute and deliver such documents, and take such other action,
as the Pledgor may reasonably request in order to effectuate the
termination of this Agreement and the security interest created hereby.

IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly executed and
delivered on the day and year first above written.

JLM INDUSTRIES, INC.

By:/s/ John T. White
---------------------------
Title: Vice President
------------------------

- 7 -
<PAGE> 8

SCHEDULE 1

DESCRIPTION OF PLEDGED STOCK

___________________________ shares of the common stock of _______________
________________________________________, a ___________________ corporation,
evidenced by Certificate Nos._________________ and _____________.

- 8 -

<PAGE> 1
EXHIBIT 10.28

MANAGEMENT, OPERATING AND STOCKHOLDERS AGREEMENT
OF
OLEFINS TERMINAL CORPORATION

This Management, Operating and Stockholders Agreement of Olefins Terminal
Corporation ("Agreement") dated effective as of May 1, 1997 by and between D-S
Splitter, Inc., a Delaware corporation ("D-S") with offices at 9830 Colonnade
Blvd., San Antonio, Texas 78230; Ultramar Diamond Shamrock Corporation, a
Delaware corporation and the parent of D-S ("UDSC") with offices at 9830
Colonnade Blvd., San Antonio, Texas 78230; JLM Industries, Inc., a Delaware
corporation ("JLM") with offices at 8675 Hidden River Parkway, Tampa, Florida
33637; Olefins Marketing Inc., a Delaware corporation and an affiliate of JLM
("OMI") with offices at 8675 Hidden Run Parkway, Tampa, Florida 33637, and
Olefins Terminal Corporation, a Delaware corporation ("OTC") with offices at
Houston, Texas. OTC is sometimes referred to herein as the Company"; UDSC is
sometimes referred to as the "Guarantor"; and D-S and JLM are sometimes referred
to herein collectively as the "Stockholders". OTC, UDSC, D-S and JLM are
sometimes referred to herein collectively as the "Parties".

WITNESSETH:

WHEREAS, Union Carbide Corporation formerly known as Union Carbide Chemicals and
Plastics Company, Inc. ("UCC"), D-S, JLM, J.D. Statham and Associates, Inc.,
("Statham") and OTC entered into a Note, Stock and Warrant purchase agreement
dated August 15, 1991 (hereinafter called the "Purchase Agreement") pursuant to
which D-S, JLM and Statham purchased shares of common stock of OTC, UCC
purchased a warrant for the purchase of shares of common stock of OTC and UCC
and the Stockholders and UCC purchased subordinated notes of OTC ("Subordinated
Notes);

WHEREAS, OTC on August 15, 1991 entered into a Credit Agreement with Bank of
America National Trust and Savings Association ("Bank of America") as agent for
the banks (as such term is defined therein) party thereto (the "Agent") under
which the Agent agreed to make available to OTC a term credit facility and a
debt service facility (together, the "Credit Facility");

WHEREAS, the Company used the proceeds from such purchases and from the Credit
Facility to finance the development and construction of a polymer grade
propylene storage and terminal facility (the "Facility") located at Seabrook,
Texas on property owned by Baytank (Houston), Inc.;

<PAGE> 2

invest in OTC certain additional amounts to be used to fund repayment of OTC's
obligations under the Credit Facility;

WHEREAS, Statham, in anticipation of its dissolution, transferred its shares of
common stock in OTC to John D. Statham, who subsequently died on February 1,
1997;

WHEREAS, on this date OTC has refinanced and repaid its obligations under the
Credit Facility through a $7,300,000.00 non-amortizing unsecured term loan
pursuant the new credit agreement with Bank of America Illinois ("B.A.
Illinois") (the "OTC Term Loan") which UDSC unconditionally guaranteed;

WHEREAS, D-S, UCC, JLM, OTC, Niels H. Krause, the sole heir of John D. Statham,
deceased ("Krause") and Bank of America have agreed that in connection with
OTC's repayment of the Credit Facility, the Subordinated Notes of OTC held by
UCC will be repaid in full by OTC, and the Subordinated Notes of D-S and JLM
will be canceled; the warrant for shares of OTC common stock held by UCC will be
returned to OTC for the payment of $2,200,000.00 and be canceled; the warrant
for shares of OTC common stock held by Bank of America will be returned to OTC
for the payment of $375,000.0O and be canceled; the common stock of OTC owned by
Statham will be purchased by OTC for the payment of $40,000.00; and UCC's, JLM's
and D-S's obligations under the Support Agreement will be terminated and
extinguished;

WHEREAS, the transactions contemplated with UCC are evidenced by that certain
Agreement dated as even date, by and among UCC, D-S, JLM, Statham and OTC (a
copy of such agreement without exhibits is attached hereto as Exhibit "A");

WHEREAS, the transactions contemplated with Krause are evidenced by that certain
agreement dated March 18, 1997, by and between OTC and Krause (a copy of such
agreement is attached hereto as Exhibit "B");

WHEREAS, UCC and OTC have executed a new Terminal Agreement of even date whereby
OTC agrees to provide UCC the fully transferable and assignable right to use the
Facilities for up to 100,000 metric tons of throughput of polymer grade
propylene (the "OCC Terminal Agreement")

WHEREAS, as a result of the contemplated transactions, D-S and JLM are the sole
shareholders of OTC and each own 50% of the outstanding common stock of OTC;

WHEREAS, all the parties wish to enter into this Agreement to provide for the
ongoing operation, management and corporate governance of OTC

NOW, THEREFORE, the parties agree as follows:

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<PAGE> 3

OTC OPERATIONS

1. JLM and D-S Contractual Monthly Take-Or-Pays. Effective January 1,1997, the
contractual monthly take-or-pays between OMI and OTC under a Terminal
Agreement dated as of July 22, 1991, and D-S and OTC under a Terminal
Agreement dated as of July 22, 1991, respectively, will be canceled. OMI
and D-S agree that the outstanding take-or-pay balance owed by JLM of
$1,949,365.41 is also canceled. JLM and D-S agree that D-S shall be
entitled to $150,000.00 credit against future throughput at the Facility
for the January and February 1997 take-or-pay payments made by D-S to OTC.

2. JLM Management Fees. On July 31, 1991, JLM entered into a Management
Agreement with OTC ("Management Agreement") for the day to day management
of the Facility. As of this date, JLM is owed the sum of $743,326.00 in
accrued but unpaid management fees under such Management Agreement. OTC,
JLM and D-S agree that such fees shall be paid as of the funding of the OTC
Term Loan. OTC, JLM and D-S agree that all future management fees due to
JLM under the Management Agreement for operating the Facility will be
included in Facility operating costs and OTC shall pay such fees to JLM on
a monthly basis, subject to the terms and conditions of the Subordination
of Management Agreement by OTC and JLM for the benefit of B.A. Illinois.

3. Facility Loading Rates. Effective January 1,1997, OTC, OMI and D-S agree
that OMI and D-S will be charged $16.00 per ton for material loaded at the
Facility. OMI and D-S will each enter into one-year contracts with OTC
terminating December 31,1997 reflecting that each is entitled to the
$16.00 per ton rate for its materials loaded at the Facility. D-S and JLM,
as sole stockholders of OTC, agree that the Board of Directors of OTC as
hereinafter named, or their properly named successors, will develop a
pricing schedule for all users of the Facility, including any future
contracts that OMI or D-S may enter into with OTC for use of the Facility.

Financial Matters.

4. Subordinated Debt. Concurrently with the funding of the OTC Term Loan, the
JLM and D-S Subordinated Notes will be surrendered to OTC marked "canceled"
and the indebtedness evidenced by such notes shall be converted into equity
of OTC in the form of additional paid in capital; and JLM, D-S and UCC
shall instruct Diamond Shamrock Refining and Marketing Company ("DSRMC") as
Escrow Agent to release, relinquish and terminate all liens and security
interests held bv UCC. JLM and D-S against the assets of OTC.

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<PAGE> 4

5. OTC Note to D-S. Upon funding of the OTC Term Loan, OTC shall repay the
$330,000.00 principal plus accrued interest of $10,939.73 due though May 1,
1997 to D-S under that certain promissory note dated December 3, 1996
executed by OTC and payable to D-S according to its terms.

6. The Guaranty of UDSC of the New Credit Agreement. In consideration of UDSC
giving its unconditional guarantee of amounts owed by OTC under the OTC
Term Loan (the "GUARANTY"), JLM of even date has paid to UDSC a one-time
fee of $91,250.00. In addition, so long as UDSC has any obligation or
liability under the Guaranty, D-S and JLM agree that D-S shall have the
right to name two of the three directors of OTC.

7. Support Obligations of JLM and D-S. D-S and JLM agree that so long as OTC
is indebted under the OTC Term Loan to Bank of America or UDSC has any
exposure or liability under the Guaranty, any cash deficits in the
operation of OTC will be met by additional cash investments by JLM and
UDSC. JLM and UDSC agree that upon written call by OTC for cash investments
to meet any cash deficit, JLM and D-S will each pay 50% of the cash deficit
within three business days of such request. OTC, D-S and JLM agree that any
cash surpluses in excess of $1,000,000.00 will be utilized to reduce the
principal balance due under the OTC Term Loan.

8. Security for JLM Support Obligation. If JLM fails to make any payment due
under its support obligation to OTC, D-S and UDSC shall have the right to
make such support obligation payments to protect their interest in the
Facility. As a guarantee of its support obligations and to secure UDSC and
D-S in the event they make the payment of the cash support obligation of
JLM, JLM shall pledge all of its stock in OTC to UDSC. Such pledge shall be
evidenced by a Pledge Agreement, to be executed by JLM, substantially in
the form of the Pledge Agreement attached hereto as Exhibit "C" (the
"Pledge Agreement"). The Pledge Agreement, together with the stock
certificates representing all of the outstanding common stock held by JLM
in OTC and executed stock powers in blank shall be delivered to UDSC upon
execution of this Agreement.

OTC Corporate Governance.

9. Stockholder Agreement. D-S and JLM will execute the Stockholder Agreement
attached hereto as Exhibit "D" and any related document, including the
Amended and Ratified Bylaws attached as Exhibit "E".

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<PAGE> 5

MISCELLANEOUS

10. Dispute Resolution. If there is a dispute between the Parties relating to
an alleged breach of this Agreement or to the business and affairs of the
Company, none of the Parties shall commence any proceeding with respect to,
or terminate this Agreement because of, such dispute until thirty (30) days
after it shall have given a notice with respect to such dispute to the
other Parties; provided, however, that nothing contained herein shall limit
or restrict in any way the right or power of a Party at any time to
commence and prosecute a proceeding for an injunction or other order (i) to
restrain any other Party from beaching this Agreement or (ii) for specific
enforcement of this Article 10. The Parties agree that any legal remedy
available to a Party with respect to a breach of this Article 10 will not
be adequate and that, in addition to all legal remedies, each Party is
entitled to an order specifically enforcing this Article 10.

11. CONFIDENTIALITY

11.1 Confidentiality.

(a) All data, reports, records and other information of any kind
received by a Party or the parent, affiliates, subsidiaries,
stockholders, directors, partners, officers, employees, agents,
representatives, consultants or lenders of a Party (such Party
being hereinafter referred to as the "Receiving Party") from one
of the other Parties or the parent affiliates, subsidiaries,
stockholders, directors, officers, partners, employees, agents,
representatives, consultants or lenders of one of the other
Parties (such other Party being hereinafter referred to as the
"Delivering Party") under this Agreement or in connection with
the transactions contemplated hereby and marked as
"confidential" shall be treated as confidential (collectively,
Confidential Information"). Except as otherwise provided herein,
the Receiving Party shall not use (and shall not permit its
parent, affiliates, subsidiaries, stockholders, directors,
officers, partners, employees, agents, representatives,
consultants or lenders to use) Confidential Information for its
own (or their own) benefit and shall use all reasonable efforts
(and shall cause its parent, affiliates, subsidiaries,
stockholders, directors, officers, partners, employees, agents,
representatives, consultants or lenders to use all reasonable
efforts) to maintain the confidentiality of Confidential
Information. If the Receiving Party or any of its parent,
affiliates, subsidiaries, stockholders, directors, officers,
partners, employees, agents, representatives, consultants or
lenders is required to disclose Confidential Information by or to
any court of

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<PAGE> 6

competent jurisdiction or any governmental or quasi-governmental
agency, authority or instrumentality of competent jurisdiction,
the Receiving Party shall, prior to such disclosure, immediately
notify the Delivering Party of such requirements and all
particulars related to such requirements. The Delivering Party
shall have the right, at its expense, to object to such
disclosure and to seek confidential treatment of any Confidential
Information to be so disclosed on such terms as it shall
determine.

(b) The restrictions set forth in Section 11.1(a) hereof shall not
apply to the use or disclosure of Confidential Information to the
extent, but only to the extent, (i) permitted or required
pursuant to any other agreement between or among the Parties,
(ii) necessary by a Party in connection with exercising its (or
their) rights or performing its (or their) duties or obligations
under this Agreement, the agreements, instruments and other
documents contemplated hereby or the other agreements described
in clause (i) of this sentence, (iii) contemplated by the last
two (2) sentences of Section 11.1(a) hereof or (iv) that the
Receiving Party can demonstrate Confidential Information (A) is
or becomes generally available to the public through no fault or
neglect of the Receiving Party, (B) is received in good faith on
a non-confidential basis from a third party who, to the best
knowledge of the Receiving Party, discloses such Confidential
Information without violating any obligations of secrecy or
confidentiality, (C) is independently developed after the time of
receipt as shown by dated written records or (D) was already
possessed at the time of receipt as shown by prior dated written
records. The restrictions set forth in Section 11.1 (a) hereof
shall not apply to the use or disclosure by the Company of
Confidential Information which consists of data, reports, records
and information relating to its or their business or the
ownership, leasing or use of the properties owned, leased or used
by the Company and which is used or disclosed in connection with
the conduct of its or their business.

(c) For the purposes of this Section 11.1, (i) information which is
specific shall not be deemed to be within an exception set forth
in Section 11.1 (b) hereof merely because it is embraced by
general information which is within such an exception and (ii) a
combination of information shall not be deemed to be within an
exception set forth in Section 11.1(b) hereof merely because
individual aspects of such combination are within such an
exception unless the

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<PAGE> 7

combination of information itself, its principle of operation and
its value or advantages are within such an exception.

11.2 Survival.

(a) Notwithstanding anything contained herein to the contrary, this
Article 11 shall survive the termination of this Agreement for any
reason until the expiration of five (5) years after the date of such
termination.

(b) This Article 11 shall continue to bind a Party which has ceased to be
a "Stockholder" until the expiration of five (5) years after the date
of such cessation.

12. FORUM; CONSENT TO PERSONAL JURISDICTION

Each Party agrees that any proceeding arising out of or relating to this
Agreement or the breach or threatened breach of this Agreement shall be
commenced and prosecuted in a court in the State of Texas. Each Party
consents and submits to the non-exclusive personal jurisdiction of any
court in the State of Texas in respect of any such proceeding. Each Party
consents to service of process upon it with respect to any such proceeding
by registered mail, return receipt requested, and by any other means
permitted by applicable laws and rules. Each Party waives any objection
that it may now or hereafter have to the laying of venue of any such
proceeding in any court in the State of Texas and any claim that it may now
or hereafter have that any such proceeding in any court in the State of
Texas has been brought in an inconvenient forum.

13. NOTICES

All notices, demands and requests required or permitted to be given
pursuant to this Agreement shall be given in writing, shall be transmitted
by personal delivery, by registered or certified mail, return receipt
requested, postage prepaid, or by telecopier or other electronic means and
shall be addressed as follows:

When D-S is the intended recipient:

D-S Splitter, Inc.
P.O. Box 696000
San Antonio, Texas 78269-6000
Telecopy No.: (210) 641-8899
Attention: General Manager, Petrochemicals

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<PAGE> 8

When JLM is the intended recipient:

JLM Industries, Inc.
8675 Hidden River Parkway
Tampa, Florida 33637
Telecopy No.: (813) 632-3301
Attention: John T. White, Esq.

When the Company is the intended recipient:

Olefins Terminal Corporation
8675 Hidden River Parkway
Tampa, Florida 33637
Telecopy No.: (813) 632-3301
Attention: John T. White, Esq.

A Party may designate a new address to which notices required or permitted
to be given pursuant to this Agreement shall thereafter be transmitted by
giving written notice to that effect to the other Parties. Each notice
transmitted in the manner described in this Article 12 shall be deemed to
have been given, received and become effective for all purposes at the time
it shall have been (i) delivered to the addressee as indicated by the
return receipt (if transmitted by mail), the affidavit of the messenger (if
transmitted by personal delivery) or the answer back or call back (if
transmitted by telecopier or other electronic means) or (ii) presented for
delivery to the addressee as so indicated during normal business hours, if
such delivery shall have been refused for any reason.

14. GOVERNING LAW.

The validity, interpretation, performance and enforcement of this Agreement
shall be governed by the law of the State of Texas (without giving effect
to the laws, rules or principles of the State of Texas regarding conflicts
of laws.).

15. ENTIRE AGREEMENT.

This Agreement, together with the Exhibit, constitute the entire contract
among the Parties with respect to the subject matter hereof and cancels and
supersedes all of the previous or contemporaneous contracts,
representations, warranties and understandings (whether oral or written)
by, between or among the Parties with respect to the subject matter hereof.

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<PAGE> 9

16. BINDING EFFECT; ASSIGNMENT.

This Agreement shall be binding upon the Parties and their respective
successors and assigns and shall inure to the benefit of the Parties and
their respective successors and permitted assigns. No Party shall assign
any of its rights or delegate any of its duties under this Agreement
without the prior written consent of the other Parties. No Person
(including, without limitation, any employee or credit or of the Company)
shall be, or be deemed to be, a third party beneficiary of this Agreement.

17. SEVERABILITY.

If any provision of this Agreement shall hereafter be held to be invalid,
unenforceable or illegal, in whole or in part, in any jurisdiction under
any circumstances for any reason, (i) such provision shall be reformed to
the minimum extent necessary to cause such provision to be valid,
enforceable and legal while preserving the intent of the Parties as
expressed in, and the benefits to the Parties provided by, this Agreement
or (ii) if such provision cannot be so reformed, such provision shall be
severed from this Agreement and an equitable adjustment shall be made to
this Agreement (including, without limitation, addition of necessary
further provisions to this Agreement) so as to give effect to the intent so
expressed and the benefits so provided. Such holding shall not affect or
impair the validity, enforceability or legality of such provision in any
other jurisdiction or under any other circumstances. Neither such holding
nor such reformation or severance shall affect or impair the legality,
validity or enforceability of any other provision of this Agreement.

18. HEADINGS.

The headings set forth in this Agreement have been inserted for convenience
of reference only, shall not be considered a part of this Agreement and
shall not limit, modify or affect in any way the meaning or interpretation
of this Agreement.

19. SURVIVAL OF REPRESENTATIONS.

All representations and warranties set forth herein shall survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.

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<PAGE> 10

20. AMENDMENTS; MODIFICATIONS.

No addition to, and no cancellation, renewal, extension, modification or
amendment of, this Agreement shall be binding upon a Party unless such
addition, cancellation, renewal, extension, modification or amendment is
set forth in a written instrument which states that it adds to, amends,
cancels, renews, extends or modifies this Agreement and which is executed
and delivered on behalf of each Party by an officer of, or attorney-in-fact
for, such Party. No such addition, cancellation, renewal, extension,
modification or amendment by the Company or to which the Company is a party
shall be effective unless the other Parties shall have given their prior
written approval thereto.

21. WAIVER.

No waiver of any provision of this Agreement shall be binding upon a Party
unless such waiver is expressly set forth in a written instrument which is
executed and delivered on behalf of such Party by an officer of, or
attorney-in-fact for, such Party. Such waiver shall be effective only to
the extent specifically set forth in such written instrument. Neither the
exercise (from time to time and at any time) by a Party of, nor the delay
or failure (at any time or for any period of time) to exercise, any right,
power or remedy shall constitute a waiver of the right to exercise, or
impair, limit or restrict the exercise of, such right, power or remedy or
any other right, power or remedy at any time and from time to time
thereafter. No waiver of any right, power or remedy of a Party shall be
deemed to be a waiver of any other right, power or remedy of such Party or
shall, except to the extent so waiver, impair, limit or restrict the
exercise of such right, power or remedy. No waiver by the Company shall be
effective unless the other Parties shall have given their prior written
approval thereto.

22. REMEDIES CUMULATIVE.

Except as otherwise provided in this Agreement, all rights, powers and
remedies afforded to a Party hereunder, by law, in equity or otherwise
shall be cumulative (and not alternative) and shall not preclude assertion
or seeking by a Party of any other rights or remedies.

23. COUNTERPARTS.

This Agreement may be signed in any number of counterparts, each of which
(when executed and delivered) shall constitute an original instrument, but
all of which together shall constitute one and the same instrument. This
Agreement shall become effective and be deemed to have been executed and
delivered by all of the Parties at such time as counterparts shall have
been executed and

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<PAGE> 11

delivered by each of the Parties, regardless of whether each of the Parties
has executed the same counterpart. It shall not be necessary when making
proof of this Agreement to account for any counterparts other than a
sufficient number of counterparts which, when taken together, contain
signatures of all of the Parties.

24. CERTAIN EXPENSES.

Except as otherwise provided in this Agreement, each Party agrees to pay
all expenses, fees and costs (including, without limitation, legal,
accounting and consulting expenses) incurred by it in connection with the
transactions contemplated hereby.

25. NO PARTNERSHIP.

Nothing contained herein shall be construed as forming a partnership
between the Parties.

IN WITNESS WHEREOF, the Parties have duly executed and delivered this Agreement
as of the date first above written.

OLEFINS TERMINAL CORPORATION JLM INDUSTRIES, INC.

By:/s/ John T. White By:/s/ John T. White
-------------------------------- --------------------------------

Its: Vice President Its: Vice President
-------------------------------- --------------------------------

D-S SPLITTER, INC. ULTRAMAR DIAMOND SHAMROCK
CORPORATION

By:/s/ By:/s/
-------------------------------- --------------------------------

Its: Vice President Its: Vice President
-------------------------------- --------------------------------

OLEFINS MARKETING, INC.

By:/s/ John T. White
--------------------------------

Its: Vice President
--------------------------------

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<PAGE> 1
EXHIBIT 10.29

STOCKHOLDERS AGREEMENT dated effective as of May 1, 1997 (this "Agreement") by
and between D-S SPLITTER, INC., a Delaware corporation ("D-S"), JLM INDUSTRIES,
INC., a Delaware corporation ("JLM") and OLEFINS TERMINAL CORPORATION, a
Delaware corporation (the "Company").

WITNESSETH:

WHEREAS, in order to maintain harmony and continuity in connection with the
management of the business and affairs of the Company, the parties hereto desire
to place certain restrictions on the transferability of certain shares of Common
Stock to provide a mechanism for the sale of certain shares of Common Stock and
to impose certain obligations on and grant certain rights to the holders of
certain shares of Common Stock;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein, the parties hereto agree as follows:

1. CERTAIN DEFINITIONS AND REFERENCES.

As used herein, the following terms shall have the meanings set forth
below:

(a) "Affiliate" shall mean, with respect to any Person (as defined in
this Article 1), any other Person which, directly or indirectly,
controls, is controlled by or is under common control with such Person;
provided, however, that, except as otherwise expressly provided herein,
the Company shall not be deemed an Affiliate of any other Party (as
defined in this Article 1) for the purposes hereof. A Person shall be
deemed to control another Person if such controlling Person possesses,
directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the
ownership of voting securities, by contract or otherwise. Any director,
executive officer or beneficial owner of five percent (5%) or more of
the equity of a Person shall for the purposes of this Agreement be
deemed to be an Affiliate of such Person.

(b) "Board" shall mean the Board of Directors of the Company.

(c) "Company Securities" shall mean the shares of Common Stock
currently owned by JLM and D-S on the date hereof and equity securities
of the Company issued or distributed in exchange or substitution for,
upon conversion or reclassification of or otherwise in respect of such
shares;

(d) "Credit Agreement" shall mean the Credit Agreement dated as of May
7, 1997, between the Company, and Bank of America Illinois;

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<PAGE> 2

(e) "D-S Shares" shall mean the shares of Common Stock owned by D-S on
the date hereof and any equity securities of the Company issued or
distributed in exchange or substitution for, upon conversion or
reclassification of or otherwise in respect of such shares.

(f) "Facility" shall mean the polymer grade propylene storage and
terminal facility located at Seabrook, Texas on property owned by
Baytank (Houston), Inc. to be owned and operated by the Company.

(g) "Fiscal Year" shall mean the fiscal year of the Company.

(h) "Guaranty" shall mean the unconditional guaranty of the Company's
obligations under the Credit Agreement executed by Ultramar Diamond
Shamrock Corporation, parent of D-S, of even date.

(i) "Holder" shall mean a Stockholder (as defined in this Article 1)
individually.

(j) "Holders" shall mean the Stockholders (as defined in this Article
1) collectively.

(k) "JLM Shares" shall mean the shares of Common Stock owned by JLM on
or before the date hereof and any equity securities of the Company
issued or distributed in exchange or substitution for, upon conversion
or reclassification of or otherwise in respect of such shares.

(l) "Management Agreement" shall mean the Management Agreement dated as
of July 22, 1991 between the Company and JLM.

(m) "Parties" shall mean the Holders (as defined in this Article 1) and
the Company, collectively.

(n) "Party" shall mean a Holder (as defined in this Article 1) or the
Company, individually.

(o) "Person" shall mean an individual or an entity, including, without
limitation, a corporation, partnership, joint venture, trust, joint
stock company, association, unincorporated organization or group acting
in concert.

(p) "Special Company Securities" shall mean the Company Securities and
any equity securities of the Company issued or distributed in exchange
or substitution for, upon conversion or reclassification of or
otherwise in respect of such Company Securities.

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<PAGE> 3

(q) "Stockholder" shall mean D-S and JLM individually.

(r) "Stockholders" shall mean D-S and JLM collectively.

As used herein, the word "transfer" shall include sell, assign,
transfer, exchange, mortgage, pledge, encumber and any other means by
which personal property may be disposed of, whether voluntary,
involuntary, by operation of law or otherwise.

As used herein, the terms "securities" and "equity securities" shall
include shares of capital stock and options, warrants and other rights
or interests convertible into or exchangeable or exercisable for shares
of capital stock.

As used herein, the terms "JLM" and "D-S" shall include their
respective successors.

As used herein, the term "Common Stock" shall include any equity
securities of the Company issued or distributed in exchange or
substitution for, upon conversion or reclassification of or otherwise
in respect of the Common Stock.

2. CORPORATE GOVERNANCE.

2.1 Board of Directors; Initial Board and Officers.

(a) Each Party agrees to take any and all actions necessary
for the strict enforcement of the Amended and Restated Bylaws
of the Company in the form of which is appended hereto as
Appendix A. The Company agrees that it shall not approve or
authorize any annual operating budget, capital budget or other
budget, or any change to any such budget, unless such budget
or change shall have been approved by a majority of the Board.

(b) The Stockholders agree that so long as the Company is
obligated to repay any amounts due under the Credit Agreement
or the Guaranty is in full force and effect, D-S shall have
the right to appoint two (2) of the three (3) directors of the
Board. Upon satisfaction of the Credit Agreement in full and
release of the Guaranty, the Stockholders shall elect three
(3) directors, one (1) of whom shall be unaffiliated with
either Stockholder. As of this date, the Board shall consist
of the following three members:

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<PAGE> 4

D-S JLM

Bob Mehall John MacDonald
Mike Milam

OFFICER INDIVIDUAL

John MacDonald President
John T. White Vice President - Finances
Ron Cormier Vice President - Operations
Mike Molina Secretary/Treasurer

(d) Each Stockholder shall give to the other Stockholder (on
date hereof and, thereafter, as the same may change from time
to time in accordance with this Agreement) and maintain at all
times thereafter in full force and effect a duly executed
proxy to vote its shares of Common Stock in the form attached
hereto as Exhibits A-1 and A-2, as appropriate, and agrees to
take any and all actions necessary to give effect to the
transactions contemplated by and to carry out the purpose and
intent of such proxies. Notwithstanding the beneficial
interest of others in any of the Shares, no Stockholder shall
give to any other Person any other proxy or power of attorney
with respect to its shares of Common Stock inconsistent with
any proxy given pursuant to the preceding sentence.

2.2 Distributions in Respect of Company Securities.

(a) Except as otherwise provided in Section 2.2(b) hereof, the
Company shall not declare, pay or set aside cash, properties,
assets, securities, rights or other interests for payment of
any dividends of any kind, or make any distributions of any
kind, to holders of its equity securities.

(b) After the repayment, in full, of all obligations under the
Credit Agreement, the Company may, from time to time, at the
discretion of the Board, declare and pay a cash dividend to
the Stockholders of the Company.

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<PAGE> 5

2.3 Transactions With Affiliates.

The Company shall not enter into any contract, lease,
transaction or other arrangement during the term of this
Agreement to which a Holder or any Affiliate of a Holder is
also a party, other than those negotiated on an "arms-length"
basis on commercially reasonable terms, without the prior
written consent of each of D-S and JLM.

2.4 Extraordinary Matters.

(a) Except as otherwise permitted by Section 2.4(b) hereof,
the Company shall not take or permit to be taken any of the
following actions without the prior written consent of each of
D-S and JLM:

(i) the amendment or restatement of the certificate of
incorporation of the Company;

(ii) the amendment, repeal or restatement of the by-laws
of the Company or the adoption of any new by-law of the
Company;

(iii) any change in the quorum for meetings of the
directors or stockholders of the Company or in the vote
required to take any action at such meetings;

(iv) except for the repurchase of shares of Common Stock
from each Holder ratably based on the proportion that the
number of shares of Common Stock held by each Holder bears
to the total number of shares of Common Stock held by the
Holders, the repurchase, redemption or retirement by the
Company of any of the then outstanding securities of the
Company;

(v) the issuance, award, grant, sale or other transfer
by the Company of any equity securities of the Company;

(vi) any material change, elimination or diversification
in the businesses, scope of operations, products or
services of the Company;

(vii) the entry into any contract or any series of related
contracts outside the normal and ordinary course of
business of the Company resulting in obligations of or
payments by the Company in excess of $50,000;

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<PAGE> 6

(viii) except for amounts constituting obligations under
the Credit Agreement, the borrowing or lending of any
funds or the incurrence of any obligations as a guarantor
or surety, excluding any transaction or any series of
related transactions which does not involve more than
$50,000;

(ix) the sale, lease, exchange, mortgage, pledge or
other disposition of, or creation of a security interest
in, assets of the Company having an aggregate fair market
value of $250,000 or more in any single transaction or any
series of related transactions;

(x) the merger, consolidation or other business
combination of the Company;

(xi) the dissolution, winding-up, reorganization or
liquidation of the Company;

(xii) any transaction to which the Company and a member
of the Board are parties;

(xiii) the formation, acquisition, sale, transfer,
liquidation or dissolution of any subsidiary of the
Company.

(b) No consent shall be required to be obtained pursuant to
Section 2.4(a) hereof in order for the Company to take any
action which is contemplated by this Agreement or any
agreement or instrument contemplated hereby or thereby.

(c) Notwithstanding anything contained in this Section 2.4, in
this Agreement to the contrary, in the event that the Board
shall have terminated the Management Agreement on account of
an event of default (as such term is defined therein)
thereunder, the Board shall be permitted to make alternative
arrangements for the management of the Company, including, but
not limited to, the approval of a substitute management
agreement with a third party, a Holder or an Affiliate of a
Holder or the taking of any other related action, that the
Board may in its discretion deem advisable without the
necessity of obtaining the consent of JLM. The Management
Agreement shall not be amended or assigned without the consent
of a majority of the Board.

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<PAGE> 7

2.5 Accounting and Banking Matters; Audit Right.

(a) The Company shall, at its cost and expense:

(i) keep books and accounts in correct and proper form in
accordance with generally accepted accounting principles;

(ii) deliver to D-S, JLM and to each member of the Board:

(A) Quarterly Statements -- within sixty (60) days
after the end of each fiscal quarter in each Fiscal
Year, one copy of:

(1) an unaudited consolidated balance sheet of
the Company as at the end of such fiscal quarter;
and

(2) unaudited consolidated statements of income,
stockholders' equity and cash flows of the
Company for the period commencing on the first
day of such fiscal quarter and ending on the
last day of such fiscal quarter accompanied by a
certificate signed by the principal financial
officer of the Company stating that such
financial statements present fairly the
financial condition of the Company and have been
prepared in accordance with generally accepted
accounting principles consistently applied,
subject to normal year-end adjustments and
accruals;

(B) Annual Statements -- within one hundred twenty
(120) days after the end of each Fiscal Year, one
copy of:

(1) an audited consolidated balance sheet of the
Company as at the end of that Fiscal Year;

(2) audited consolidated statements of income,
stockholders' equity and cash flows of the
Company for that Fiscal Year; and

(3) a comparison of the actual financial figures
for that Fiscal Year with comparable figures for
the prior Fiscal Year and with comparable
figures included in the budget for that Fiscal
Year, together with an

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<PAGE> 8

explanation of any material differences between
them, and, in the case of balance sheets and
statements, accompanied by an opinion of a firm
of independent public accountants of recognized
national standing stating that such financial
statements present fairly the financial
condition of the Company and have been prepared
in accordance with generally accepted accounting
principles consistently applied;

(C) Budgets and Projections -- within thirty (30)
days following the beginning of each Contract Year
(as such term is used in the Operation and
Maintenance Agreement dated July 31, 1991 between the
Company and Baytank (Houston), Inc.), a budget on a
monthly basis for such Contract Year for the
Company's operations, together with an analysis of
such budget, prepared in reasonable detail by the
principal financial officer of the Company, and,
within fifteen (15) days following the making of any
changes in such budget, a letter disclosing all such
changes;

(D) Other Auditor's Reports -- promptly, copies of
all reports submitted by the Company's independent
public accountants in connection with any annual or
interim audit of the books of the Company or any
subsidiary, including, without limitation, any letter
or reports relating to internal controls, adequacy of
records or the like;

(E) Reports, Etc. -- promptly, after the same are
sent, copies of all financial statements and reports
which the Company sends to the Agent, and, promptly,
copies of any periodic or special reports (including
health, safety and environmental reports) filed by
the Company with any federal, state or local
governmental agency or authority, if such reports
indicate any material change in, or material adverse
events or conditions affecting, the business,
operations, affairs or condition of the Company and
copies of any material notices and other material
communications from any federal, state or local
governmental agency, court or authority which
specifically relate to the Company;

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<PAGE> 9

(F) Requested Information -- with reasonable
promptness, any other data and information which may
be reasonably requested from time to time.

(b) The Company shall deposit all of its funds in its name in
an account or accounts maintained in one or more banks
designated by the Board. The Company shall not draw checks,
drafts or other items thereupon except for the account of or
use by the Company and only if signed by duly authorized
representatives of the Company designated by the Board. The
funds of the Company shall not be commingled with the funds of
any Holder.

(c) Each of D-S and JLM shall have the right, at its cost and
expense, at any reasonable time, to audit, examine and make
copies of or extracts from (i) the books, accounts and other
financial records of the Company and (ii) any contract entered
into by the Company or customer invoices relating to
transactions for the use of the throughput capacity of the
Facility. Such audit, examination, copying and extracting may
be conducted by employees of such Party or a firm of
independent public accountants designated by such Party. All
information obtained by a Party from the Company shall be
subject to the confidentiality obligations set out in Article
6 of this Agreement.

3. RIGHTS TO FACILITY CAPACITY.

The following rights to use the Facility shall attach to the ownership
of Special Company Securities, shall not be detachable or separately
transferable therefrom and shall automatically be transferred to a new
holder of Special Company securities in connection with such transfer.
Any transfer of the following rights, in whole or in part, other than
in strict compliance with the preceding sentence shall be void. Subject
to the two preceding sentences, holders of Special Company Securities
shall be entitled, but not obligated, to use the Facility as follows:

3.1 Volume. Subject to Sections 3.7 and 3.9 hereof, each holder of
Special Company Securities shall have the right to use up to that
portion of the actual total throughput capacity of the Facility which
bears the same proportion to such total capacity as the number of
shares of Common Stock held by such Holder bears to the total number of
shares of Common Stock included among the Special Company Securities;
provided, however, that if such Holder has a contract with the Company
on the date hereof to use a portion of the throughput capacity of the
Facility and such contract provides for a "take-or-pay" arrangement
with respect to all or part of such portion (the

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<PAGE> 10

"Other Take-Or-Pay Portion"), such Holder's right to use the throughput
capacity of the Facility hereunder shall be reduced by the Other
Take-Or-Pay Portion. For purposes of initially determining the quantity
which each such holder's allocable portion of the total throughput
capacity of the Facility entitles each such holder to use, it will be
assumed that the Facility will have a total throughput capacity of
450,000 metric tons per year. Upon the determination of the actual
total throughput capacity of the Facility, the quantity which each such
holder's allocable portion of the total throughput capacity of the
Facility entitles each such holder to use will be appropriately
adjusted.

3.2 Most Favored Nations. Each Holder of Special Company Securities
shall have the right to use any or all of that portion of the total
throughput capacity of the Facility to which such holder is entitled
under Section 3.1 hereof on a "most favored nations" basis.

3.3 Price. Section 3.2 hereof shall mean, as to price charged by the
Company to each holder of Special Company Securities, for the period
covered by the notice which such holder shall have given pursuant to
the first sentence of Section 3.5 hereof, the weighted average price
charged by the Company to other throughput users under "take-or-pay"
contracts (or the "take-or-pay" portions of contracts, as the case may
be) with the Company on (i) the date on which such notice is given or
(ii) the date of commencement of such period (a "Commencement Date"),
whichever date results in a lower weighted average price. For the
purposes hereof, (i) the "weighted average price" charged to such other
users shall be determined by (A) adding together the aggregate prices
to be paid by such users to throughput the quantities of product which
they are obligated to throughput (the "Total Price") and (B) adding
together the quantities of products which they are obligated to
throughput (the "Total Quantity") and then dividing the Total Price by
the Total Quantity and (ii) such users shall include holders of Special
Company Securities who have such contracts with the Company or who have
previously exercised their rights under this Article 3.

3.4 Quantity. After a holder of Special Company Securities has given a
notice pursuant to the first sentence of Section 3.6 hereof, such
holder shall be obligated (subject to Section 3.5 hereof) to put
product through the Facility monthly in a quantity equal to the
quantity which such holder had indicated in such notice that it
intended to throughput monthly (or, if less, the maximum quantity which
is required to be made available to such holder under Section 3.8
hereof) at the price determined pursuant to Section 3.3 hereof and to
pay the Company therefor. If such holder breaches such obligation, such
holder shall (subject to Section 3.5 hereof) pay to the Company an
amount equal to the aggregate amount which such holder would have paid
if it had not

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<PAGE> 11

breached such obligation, less the aggregate amount actually paid to
the Company in connection with the performance of such obligation,
[less the aggregate amount which the Company receives from a substitute
contract or contracts found by the holder or other users who use the
capacity of the Facility which would otherwise have been used by such
holder.] Such payment shall be such holder's sole liability, and the
Company's sole remedy, for such breach. Such payment shall be due
within ten (10) days after the end of each month for breaches which
occurred during that month. For purposes of determining whether other
users are using capacity of the Facility which would have to be so used
by a holder of Special Company Securities, (i) such other users shall
be deemed to be using all other capacity of the Facility before they
are treated as using such capacity and (ii) if two or more of such
holders have breached such obligation and other users are treated as
using some (but not all) of the capacity which would have been used by
such holders, such use by other users shall be allocated between or
among such holders ratably based upon the proportion which the capacity
that is not used by each such holder bears to the total capacity that
is not used by all such holders. Unless special arrangements are made
with JLM by a holder of Special Company Securities, JLM, in its
capacity as manager of the Facility, shall have no obligation to seek
or obtain a substitute user of throughput capacity in lieu of such
holder's obligation to pay for throughput capacity under this Section
3.4.

3.5 Other Terms. Section 3.2 hereof shall mean, as to terms other than
quantity, term and price, that each such other term (such as those
relating to specifications, payments, force majeure and the like)
regarding the use of the throughput capacity of the Facility by holders
of Special Company Securities under this Article 3 shall be the same as
the most favorable term afforded to any other user of the Facility
under any other "take-or-pay" contract then being performed (or, if no
such contract is then being performed, under the Company's then
standard "take-or-pay" contract) and, if such other term would excuse
any breach described in Section 3.4 hereof or reduce such holder's
liability therefor if it had been incorporated herein, then such term
shall govern notwithstanding anything contained herein to the contrary.

3.6 Notice and Contract. In order to exercise its rights under this
Article 3, a holder of Special Company Securities must give written
notice to the Company as to the capacity which such holder intends to
use, on a monthly basis, during the period of not less than twelve (12)
months specified in such notice at least ten (10) months prior to the
commencement of such use. The Company shall, within ten (10) days after
receipt, give written notice to all holders of Special Company
Securities of (i) each notice received pursuant to this Section 3.6 and
(ii) each notice (or other probative evidence) of the termination,
cancellation or non-renewal of any then existing contract to use

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<PAGE> 12

the throughput capacity of the Facility. Each holder of Special Company
Securities which exercises its rights under this Article 3 and the
Company shall, at least thirty (30) days prior to the applicable
Commencement Date, enter into a written contract relating to their
respective rights and obligations under this Article 3 with respect to
the use of the throughput capacity of the Facility during the period to
which such Commencement Date relates. Except as otherwise provided in
this Article 3, the form and terms of such contract shall be the same
as those of the Company's then current "take-or-pay" contract.

3.7 Reservation of Capacity. Notwithstanding anything contained herein
to the contrary, if at the time notice is given by a holder of Special
Company Securities pursuant to the first sentence of Section 3.6
hereof, sufficient throughput capacity at the Facility is not available
(because of contractual obligations, including those arising under this
Article 3, or casualties, equipment failures, force majeure or events
beyond the reasonable control of the Company) to accommodate in full
the use requested thereby for all or any part of the period covered by
such notice, the Company shall make available to such holder any
available throughput capacity of the Facility during the period covered
by such notice. Notwithstanding anything contained herein to the
contrary, if at the time notices are given by two or more holders of
Special Company Securities pursuant to the first sentence of Section
3.6 hereof, sufficient throughput capacity at the Facility is not
available (due to such causes) to accommodate in full the uses
requested thereby for all or any part of the periods covered by such
notices and if such notices are given or deemed to have been given at
the same time, the Company shall allocate any available throughput
capacity among such holders on a monthly basis so as to be able to
satisfy the same percentage of monthly use set forth in each such
notice during the periods covered by such notices. In any event where
available through-put capacity of the Facility during the period
covered by the notice given by a holder under the first sentence of
Section 3.6 will not satisfy the quantity set forth in such notice, the
Company shall have no obligation to reserve or make available to such
holder any throughput capacity beyond the period covered by such notice
unless such holder shall have given a new notice under the first
sentence of Section 3.6. For the purposes hereof, such notices shall be
deemed to have been given at the same time if they are given within
forty (40) days of each other. In all other cases, the throughput
capacity of the Facility shall be made available under this Article 3
on a "first come, first served" basis.

3.8 Existing Contracts. Nothing contained herein shall affect or modify
any of the terms or conditions of any contracts existing on the date
hereof to use the throughput capacity of the Facility.

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<PAGE> 13

3.9 No Defaults. A holder of Special Company Securities shall not have
any rights under this Article 3 so long as it is in material default
under or breach of any then current contract with the Company to use
the throughput capacity at the Facility; provided, however, that this
Section 3.9 shall not apply to defaults or breaches attributable to
prior material defaults under or breaches of such contract by the
Company.

4. TRANSFER OF COMPANY SECURITIES.

4.1 Right of First Refusal on Transfer of Company Interest by
Other Holders.

(a) The capitalized terms defined in this Section 4.2 shall
have the meanings set forth in this Section 4.2 only.

(b) Whenever any Holder(within the meaning of Article 1
hereof) shall receive an offer from a third party (the "Third
Party Offer") to purchase for cash any or all of its Company
Securities and related rights to Facility capacity(the
"Offered Interest"), such Holder (the "Offeror") shall give to
all of the other Holders (the "Offerees"), written notice to
that effect (the "Offer Notice"). Such notice shall describe
all of the material terms and conditions of such offer,
including the name of the third party, the offered Interest
and the proposed cash purchase price (the "Offer Price"), and
shall describe in reasonable detail the background, character,
experience and financial condition of the third party. Each
Offeree shall have the option, for a period of one hundred
twenty (120) days from the date on which the Offer Notice
shall have been given, within which to give written notice to
the Offeror and all of the other Offerees of such Offerees
desire to purchase the Offered Interest at the Offer Price and
on the terms and conditions set forth in Section 4.3 hereof
(an "Offer Acceptance Notice").

(c) If one or more Offerees gives an Offer Acceptance Notice,
such Offerees shall purchase from the Offeror, and the Offeror
shall sell to such Offerees, the entire Offered Interest at
the Offer Price and on the terms and conditions set forth in
Section 4.3 hereof. If more than one Offeree gives an Offer
Acceptance Notice, each such Offeree shall purchase from the
Offeror, and the Offeror shall sell to each such Offeree, that
portion of each class of securities included in the Offered
Interest for that portion of the Offer Price equivalent to
each such Offeree's proportionate holdings of the total number
of shares of Common Stock held by such Offerees.

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<PAGE> 14

(d) If no Offeree shall have become obligated to purchase the
Offered Interest pursuant to Section 4.1(c) hereof or if one
or more Offerees shall have become so obligated but shall have
materially breached such obligation, the Offeror shall
(subject to the provisions of Section 4.2(f) hereof and
compliance with the next sentence of this Section 4.1(d)) have
the right to sell all (but not less than all) of the Offered
Interest to such third party at or equal to or the Offer Price
and on the terms and conditions described in the Offer Notice.
If the Offered Interest is sold to a third party pursuant to
this Section 4.1(d), the Offeror shall, as soon as is
reasonably practicable, give written notice to that effect to
the Offerees. If the Offered Interest is not sold to such
third party pursuant to this Section 4.1(d) within two hundred
seventy (270) days after the Offer Notice shall have been
given, the Offered Interest shall again become subject to this
Section 4.1 in its entirety.

4.2 Terms and Conditions of Purchase and Sale Between Parties.

(a) If a Party becomes obligated to sell an Interest (as
defined in Section 4.2(b) hereof) to another Party pursuant to
Section 4.1 hereof, such Interest shall be sold and purchased
on the terms and conditions set forth in this Section 4.2.

(b) For the purposes of this Section 4.2, the term "Notice
Date" shall mean the effective date (within the meaning of
Article 9 hereof) of the last Offer Acceptance Notice (within
the meaning of Section 4.1 hereof) as to which an obligation
to purchase and sell the Offered Interest (within the meaning
of Section 4.1 hereof) arises under Section 4.1(e) hereof and
the term "Interest" shall mean the Offered Interest (within
the meaning of Section 4.1 to be purchased and sold under this
Section 4.2.

(c) The closing of the sale shall be held at the headquarters
of the Company (or such other place as to which the purchaser
and seller may mutually agree) on a date which is sixty (60)
days after the Notice Date (or such other date as to which the
purchaser and seller may mutually agree). At such closing, the
seller shall convey and assign to the purchaser, free and
clear of all liens, claims and encumbrances, the Interest and
shall execute and deliver to the purchaser all documents which
may be required to give effect to the purchase and sale of the
Interest, and the purchaser shall pay to the seller the price
therefor in immediately available funds.

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<PAGE> 15

(d) The obligation of a seller to sell, and the obligation of
a purchaser to purchase, the Interest at such closing shall be
subject to the conditions precedent that (i) no preliminary or
permanent injunction, order, decree or ruling issued by a
court of competent jurisdiction or by a governmental or
quasi-governmental board, bureau, instrumentality, agency or
commission shall be in effect which prohibits, restricts or
enjoins such conveyance and assignment, (ii) any applicable
waiting period under any applicable law shall have expired,
(iii) all approvals, consents, authorizations, exemptions,
notices and filings shall have been obtained, given or made as
required under applicable law, (iv) the purchaser shall have
received a representation and warranty to the effect that the
seller has good and marketable title to the Interest, free and
clear of all liens, claims and encumbrances and that the
seller has full right, power and authority to effect such
conveyance and assignment (which representation and warranty
the seller shall make) and (v) there shall have been no
material adverse change (or changes which in the aggregate are
materially adverse) in the Company's business which occurred
after the Notice Date; provided, however, that the purchaser
may waive the conditions precedent set forth in clauses (iv)
and (v) of this sentence on behalf of the seller as well as
the purchaser. The Parties shall promptly use all reasonable
efforts to (i) avoid the issuance of and, if issued, to cause
the lifting of any injunction, order, decree or ruling
referred to in the preceding sentence and (ii) obtain, give or
make all approvals, consents, authorizations, exemptions,
notices and filings referred to in the preceding sentence.

(e) A purchaser shall have the right to designate some other
Person who will act as the buyer of the Interest; provided,
however, that no such designation shall release the purchaser
from any of its obligations hereunder.

(f) If there is more than one purchaser or seller in
connection with any sale of the Interest, the obligations of
such purchasers or sellers shall be several (and not joint),
but shall be conditional upon performance by each other
purchaser and seller; provided, however, that if there are two
(2) or more purchasers and one of such purchasers materially
breaches its obligations at the closing, the other of such
purchasers shall have the right, by giving written notice at
the closing to the seller or sellers, to (A) to postpone the
closing for two (2) business days and (B) at such postponed
closing, to purchase ratably that portion of interest not
purchased by the breaching purchaser. Notwithstanding anything
contained herein to the contrary, under no

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<PAGE> 16

circumstances shall the seller in such an event be obligated
pursuant to the provisions hereof to sell less than 100% of
the Offered Interest.

(g) Upon consummation of such closing, the proposed purchaser
shall be entitled to all of the rights hereunder of the seller
in respect of the Interest and references contained herein to
the seller shall be deemed to be references to the purchaser;
provided, however, that, under no circumstances shall the
purchaser individually, or the purchaser and the seller
together, have greater rights hereunder in respect of the
Interest than the seller would have had if the closing had not
been consummated. If upon the consummation of the closing no
Company Securities are owned by the seller or any of its
Affiliates, then the seller and its Affiliates (i) shall cease
being a "Stockholder" or having any rights hereunder and (ii)
shall be released from all obligations, liabilities and duties
hereunder except (A) for rights, obligations, liabilities or
duties accruing, or arising out of or related to events
occurring or conditions existing, prior to the date of such
transfer or (B) as otherwise provided in Section 6.3(b)
hereof. If, as a result of any such sale, all of the Company
Securities are held by the same Party, this Agreement (other
than Article 6 hereof) shall terminate upon the closing of
such sale.

4.3 Special Restrictions on Transfer.

Notwithstanding anything contained herein to the contrary, no Holder
shall, or shall permit its Affiliates to, transfer any Company
Securities to any competitor of the Company engaged in the propylene
terminaling business in the United States.

4.4 Restriction on Transfer; Transfer With Consent.

(a) No Holder shall, or shall permit its Affiliates to,
transfer any Company Securities (i) without the prior written
consent of all of the other Holders or (ii) except as
permitted by this Article 4. The giving or withholding of
consent to any transfer of any Company Securities shall be
entirely within the discretion of the Holder requested to give
such consent.

(b) Any attempted transfer of any Company Securities other
than as permitted by this Article 4 shall be void and shall
have no effect. Each certificate evidencing any Company
Securities shall display a prominent legend regarding the
restrictions set forth in this Article 4.

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<PAGE> 17

4.5 Transfer to a Subsidiary.

(a) Each Holder shall have the right, at any time, to (i)
transfer any or all of its Company Securities to one or more
of its wholly owned and controlled Affiliates (individually, a
"Subsidiary" and, collectively, its "Subsidiaries") or (ii)
permit any of its Subsidiaries to transfer any or all of the
Company Securities held by such Subsidiary to such Holder or
another Subsidiary of such Holder; provided, however, that (i)
if a Subsidiary of such Holder which owns Company Securities
is to cease being a Subsidiary of such Holder for any reason,
such Holder shall cause all of such Company Securities to be
transferred back to such Holder or to another Subsidiary of
such Holder prior to such cessation, (ii) such Holder causes
each Subsidiary of such Holder which holds any Company
Securities to observe all of the terms of this Agreement and
assume and perform all of the obligations, liabilities and
duties of such Holder hereunder and (iii) such Holder or its
Subsidiaries (at its or their sole cost and expense) obtain,
prior to such transfer, all consents, approvals, exemptions
and authorizations from, give all notices to and make all
filings with any third party (including, without limitation,
any financial institution or governmental or
quasi-governmental agency, authority, commission, board,
bureau or instrumentality) which may be necessary in
connection with such transfer.

(b) Upon consummation of a transfer pursuant to Section 4.5(a)
hereof, the Subsidiary of a Holder to whom Company Securities
shall have been transferred shall be entitled to all of the
rights of such Holder hereunder as appropriate and references
contained herein to such Holder shall be deemed to include
references to such Subsidiary as appropriate; provided,
however, that, under no circumstances shall such Subsidiary,
such Holder and all of the other Subsidiaries of such Holder
which hold any Company Securities together have greater rights
hereunder than such Holder would have had if it alone held all
of the Company Securities held by it and its Subsidiaries.

(c) No transfer of Company Securities to a Subsidiary pursuant
to this Section 4.5 shall relieve the Holder who transferred
or whose Subsidiary transferred such Company Securities of its
obligations, liabilities and duties hereunder or result in
such Holder ceasing to be a "Stockholder".

4.6 Transfer of Company Securities or Subsidiary With Other
Businesses. Notwithstanding anything contained in this Article 4
(other than Section 4.3 hereof) to the contrary, (i) D-S shall have
the right, at any time, without the consent of or subject to any rights
of any other Party, to transfer its Company

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<PAGE> 18

Securities or any of its Subsidiaries which hold Company Securities to
any successor to or transferee of its polymer grade propylene business
and (ii) JLM shall have the right, at any time, without the consent of
or subject to any rights of any other Party, to transfer its Company
Securities or any of its Subsidiaries which hold Company Securities to
any successor to or transferee of substantially all of the assets of
JLM.

4.7 Certain Conditions to Transfer of Company Securities or
Subsidiaries to Third Parties. It shall be a condition precedent to any
proposed transfer of Company Securities or of any Subsidiary which
holds Company Securities to a third party (other than pursuant to
Section 4.5 hereof) that (i) the Holder who proposes (or whose
Subsidiary proposes) to transfer such Company Securities or Subsidiary
and the proposed transferee (at its and their sole cost and expense)
obtain all consents, approvals, exemptions and authorizations from,
give all notices to and make all filings with any third party
(including, without limitation, any financial institution or
governmental or quasi-governmental agency, commission, board, bureau or
instrumentality) which may be necessary in connection with the proposed
transfer and (ii) before or contemporaneously with the consummation of
the proposed transfer, the proposed transferee executes and delivers a
written instrument pursuant to which it agrees to (1) become a party to
this Agreement, (2) observe all of the terms hereof and conditions
hereof, (3) assume and perform all of the obligations, liabilities and
duties hereunder of the Holder who is transferring or whose Subsidiary
is transferring such Company Securities or Subsidiary and (4) execute
proxies in the form executed by such transferring Holder pursuant to
Section 2.1(C) hereof. Such written instrument must contain such
representations and warranties as the other Holders may reasonably
request to the effect that the proposed transferee will have good and
marketable title to such Company Securities or Subsidiary, that such
written instrument has been duly authorized, executed and delivered and
constitutes a legal, valid and binding obligation of the proposed
transferee and as to satisfaction of the condition precedent set forth
in clause (i) of the preceding sentence. Upon consummation of such
transfer following satisfaction of such conditions precedent, the
proposed transferee shall be entitled to all of the rights hereunder of
the Holder who transferred (or whose Subsidiary transferred) such
Company Securities or Subsidiary and references contained herein to
such Holder shall be deemed to be references to the proposed
transferee; provided, however, that, under no circumstances shall the
proposed transferee individually, or the proposed transferee and such
Holder and its Affiliates together, have greater rights hereunder than
such Holder and its Affiliates would have had if such transfer had not
been consummated. If upon the completion of such transfer no Company
Securities are owned by a Holder or any of its Affiliates, then such
Holder and its Affiliates (i) shall cease being a

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<PAGE> 19

"Stockholder" or having any rights hereunder and (ii) shall be released
from all obligations, liabilities and duties hereunder except (A) for
rights, obligations, liabilities or duties accruing, or arising out of
or related to events occurring or conditions existing, prior to the
date of such transfer or (B) as otherwise provided in Section 6.3(b)
hereof.

5. DISPUTE RESOLUTION. If there is a dispute between the Parties relating
to an alleged breach of this Agreement or to the business and affairs of the
Company, none of the Parties shall commence any proceeding with respect to, or
terminate this Agreement because of, such dispute until thirty (30) days after
it shall have given a notice with respect to such dispute to the other Parties;
Provided, however, that nothing contained herein shall limit or restrict in
any way the right or power of a Party at any time to commence and prosecute a
proceeding for an injunction or other order (i) to restrain any other Party
from breaching this Agreement or (ii) for specific enforcement of this Article
5 or Article 4 hereof. The Parties agree that any legal remedy available to a
Party with respect to a breach of this Article 5 or Article 4 hereof will not
be adequate and that, in addition to all legal remedies, each Party is entitled
to an order specifically enforcing this Article 5 and Article 4 hereof.

6. CONFIDENTIALITY.

6.1 Confidentiality.

(a) All data, reports, records and other information of any
kind received by a Party or the Affiliates, subsidiaries,
stockholders, directors, partners, officers, employees,
agents, representatives, consultants or lenders of a Party
(such Party being hereinafter referred to as the "Receiving
Party") from one of the other Parties or the Affiliates,
subsidiaries, stockholders, directors, officers, partners,
employees, agents, representatives, consultants or lenders of
one of the other Parties (such other Party being hereinafter
referred to as the "Delivering Party") under this Agreement or
in connection with the transactions contemplated hereby and
marked as "confidential,, shall be treated as confidential
(collectively, "Confidential Information"). Except as
otherwise provided herein, the Receiving Party shall not use
(and shall not permit its Affiliates, subsidiaries,
stockholders, directors, officers, partners, employees,
agents, representatives, consultants or lenders to use)
Confidential Information for its own (or their own) benefit
and shall use all reasonable efforts (and shall cause its
Affiliates, subsidiaries, stockholders, directors, officers,
partners, employees, agents, representatives, consultants or
lenders to use all reasonable efforts) to maintain the
confidentiality of Confidential Information. If the Receiving
Party or any of its Affiliates, subsidiaries, stockholders,
directors,

- 19 -

<PAGE> 20

officers, partners, employees, agents, representatives,
consultants or lenders is required to disclose Confidential
Information by or to any court of competent jurisdiction or
any governmental or quasi-governmental agency, authority or
instrumentality of competent jurisdiction, the Receiving Party
shall, prior to such disclosure, immediately notify the
Delivering Party of such requirement and all particulars
related to such requirement. The Delivering Party shall have
the right, at its expense, to object to such disclosure and to
seek confidential treatment of any Confidential Information to
be so disclosed on such terms as it shall determine.

(b) The restrictions set forth in Section 6.1(a) hereof shall
not apply to the use or disclosure of Confidential Information
to the extent, but only to the extent, (i) permitted or
required pursuant to any other agreement between or among the
Parties (or their respective Affiliates), (ii) necessary by a
Party (or its Affiliates) in connection with exercising its
(or their) rights or performing its (or their) duties or
obligations under this Agreement, the agreements, instruments
and other documents contemplated hereby or the other
agreements described in clause (i) of this sentence, (iii)
necessary by a Party (or its Affiliates) in connection with
the sale or transfer of its (or their) Company Securities or
business or assets, generally; provided, however, that in any
such event such Party (or Affiliate) shall cause such proposed
transferee to execute a confidentiality agreement which shall
provide projections substantially similar to those contained
in this Section 6, (iv) contemplated by the last two (2)
sentences of Section 6.1(a) hereof or (v) that the Receiving
Party can demonstrate Confidential Information (A) is or
becomes generally available to the public through no fault or
neglect of the Receiving Party, (B) is received in good faith
on a non-confidential basis from a third party who, to the
best knowledge of the Receiving Party, discloses such
Confidential Information without violating any obligations of
secrecy or confidentiality, (C) is independently developed
after the time of receipt as shown by dated written records or
(D) was already possessed at the time of receipt as shown by
prior dated written records. The restrictions set forth in
Section 6.1(a) hereof shall not apply to the use or disclosure
by the Company or any of its Affiliates of Confidential
Information which consists of data, reports, records and
information relating to its or their business or the
ownership, leasing or use of the properties owned, leased or
used by the Company or any of its Affiliates and which is used
or disclosed in connection with the conduct of its or their
business.

- 20 -

<PAGE> 21

(c) For the purposes of this Section 6.1, (i) information
which is specific shall not be deemed to be within an
exception set forth in Section 6.1(b) hereof merely because it
is embraced by general information which is within such an
exception and (ii) a combination of information shall not be
deemed to be within an exception set forth in Section 6.1(b)
hereof merely because individual aspects of such combination
are within such an exception unless the combination of
information itself, its principle of operation and its value
or advantages are within such an exception.

6.2 Survival.

(a) Notwithstanding anything contained herein to the contrary,
this Article 6 shall survive the termination of this Agreement
for any reason until the expiration of five (5) years after
the date of such termination.

(b) This Article 6 shall continue to bind a Party which has
ceased to be a "Stockholder" until the expiration of five (5)
years after the date of such cessation.

7. FORUM; CONSENT TO PERSONAL JURISDICTION.

Each Party agrees that any proceeding arising out of or relating to this
Agreement or the breach or threatened breach of this Agreement shall be
commenced and prosecuted in a court in the State of Texas. Each Party consents
and submits to the non-exclusive personal jurisdiction of any court in the State
of Texas in respect of any such proceeding. Each Party consents to service of
process upon it with respect to any such proceeding by registered mail, return
receipt requested, and by any other means permitted by applicable laws and
rules. Each Party waives any objection that it may now or hereafter have to the
laying of venue of any such proceeding in any court in the State of Texas and
any claim that it may now or hereafter have that any such proceeding in any
court in the State of Texas has been brought in an inconvenient forum.

8. NOTICES.

All notices, demands and requests required or permitted to be given pursuant to
this Agreement shall be given in writing, shall be transmitted by personal
delivery, by registered or certified mail, return receipt requested, postage
prepaid, or by telecopier or other electronic means and shall be addressed as
follows:

- 21 -

<PAGE> 22

When D-S is the intended recipient:

D-S Splitter, Inc.
P.O. Box 696000
San Antonio, Texas 78269-6000
Telecopy No.: (210) 641-8899
Attention: General Manager, Petrochemicals

When JLM is the intended recipient:

JLM Industries, Inc.
8675 Hidden River Parkway
Tampa, Florida 33637
Telecopy No.: (813) 632-3301
Attention: John T. White, Esq.

When the Company is the intended recipient:

Olefins Terminal Corporation
8675 Hidden River Parkway
Tampa, Florida 33637
Telecopy No.: (813-632-3301
Attention: John T. White, Esq.

A Party may designate a new address to which notices required or permitted to be
given pursuant to this Agreement shall thereafter be transmitted by giving
written notice to that effect to the other Parties. Each notice transmitted in
the manner described in this Article 8 shall be deemed to have been given,
received and become effective for all purposes at the time it shall have been
(i) delivered to the addressee as indicated by the return receipt (if
transmitted by mail), the affidavit of the messenger (if transmitted by personal
delivery) or the answer back or call back (if transmitted by telecopier or other
electronic means) or (ii) presented for delivery to the addressee as so
indicated during normal business hours, if such delivery shall have been refused
for any reason.

9. TERM AND TERMINATION OF AGREEMENT.

9.1 Term of Agreement. This Agreement shall become effective as of the
date hereof and shall continue until terminated in accordance with the
terms hereof.

9.2 Termination. This Agreement may be terminated at any time by mutual
written consent of the Parties.

- 22 -

<PAGE> 23

10. ADDITIONAL REPRESENTATION.

JLM represents and warrants that all of the beneficial owners of Common Stock
which JLM owns of record have executed consents agreeing to be bound by the
terms and conditions affecting JLM hereunder, and JLM agrees that any breach of
the terms or conditions of this Agreement by any such beneficial owner shall be
deemed a breach by JLM hereunder for which JLM shall be liable as if JLM had
committed such breach.

11. MISCELLANEOUS.

11.1 Governing Law. The validity, interpretation, performance and
enforcement of this Agreement shall be governed by the law of the State
of Texas (without giving effect to the laws, rules or principles of the
State of Texas regarding conflicts of laws).

11.2 Entire Agreement. This Agreement constitutes the entire contract
among the Parties with respect to the subject matter hereof and cancels
and supersedes all of the previous or contemporaneous contracts,
representations, warranties and understandings (whether oral or
written) by, between or among the Parties with respect to the subject
matter hereof.

11.3 Binding Effect; Assignment. This Agreement shall be binding upon
the Parties and their respective successors and assigns and shall inure
to the benefit of the Parties and their respective successors and
permitted assigns. No Party shall assign any of its rights or delegate
any of its duties under this Agreement without the prior written
consent of the other Parties. No Person (including, without limitation,
any employee or creditor of the Company) shall be, or be deemed to be,
a third party beneficiary of this Agreement.

11.4 Severability. If any provision of this Agreement shall hereafter
be held to be invalid, unenforceable or illegal, in whole or in part,
in any jurisdiction under any circumstances for any reason, (i) such
provision shall be reformed to the minimum extent necessary to cause
such provision to be valid, enforceable and legal while preserving the
intent of the Parties as expressed in, and the benefits to the Parties
provided by, this Agreement or (ii) if such provision cannot be so
reformed, such provision shall be severed from this Agreement and an
equitable adjustment shall be made to this Agreement (including,
without limitation, addition of necessary further provisions to this
Agreement) so as to give effect to the intent so expressed and the
benefits so provided. Such holding shall not affect or impair the
validity, enforceability or legality of such provision in any other
jurisdiction or under any other circumstances. Neither such holding nor
such reformation or severance shall

- 23 -

<PAGE> 24

affect or impair the legality, validity or enforceability of any other
provision of this Agreement.

11.5 Headings. The headings set forth in this Agreement have been
inserted for convenience of reference only, shall not be considered a
part of this Agreement and shall not limit, modify or affect in any way
the meaning or interpretation of this Agreement.

11.6 Survival of Representations. All representations and warranties
set forth herein shall survive the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby.

11.7 Amendments; Modifications. No addition to, and no cancellation,
renewal, extension, modification or amendment of, this Agreement shall
be binding upon a Party unless such addition, cancellation, renewal,
extension, modification or amendment is set forth in a written
instrument which states that it adds to, amends, cancels, renews,
extends or modifies this Agreement and which is executed and delivered
on behalf of each Party by an officer of, or attorney-in-fact for, such
Party. No such addition, cancellation, renewal, extension, modification
or amendment by the Company or to which the Company is a party shall be
effective unless the other Parties shall have given their prior written
approval thereto.

11.8 Waiver. No waiver of any provision of this Agreement shall be
binding upon a Party unless such waiver is expressly set forth in a
written instrument which is executed and delivered on behalf of such
Party by an officer of, or attorney-in-fact for, such Party. Such
waiver shall be effective only to the extent specifically set forth in
such written instrument. Neither the exercise (from time to time and at
any time) by a Party of, nor the delay or failure (at any time or for
any period of time) to exercise, any right, power or remedy shall
constitute a waiver of the right to exercise, or impair, limit or
restrict the exercise of, such right, power or remedy or any other
right, power or remedy at any time and from time to time thereafter. No
waiver of any right, power or remedy of a Party shall be deemed to be a
waiver of any other right, power or remedy of such Party or shall,
except to the extent so waived, impair, limit or restrict the exercise
of such right, power or remedy. No waiver by the Company shall be
effective unless the other Parties shall have given their prior written
approval thereto.

11.9 Remedies Cumulative. Except as otherwise provided in this
Agreement, all rights, powers and remedies afforded to a Party
hereunder, by law, in equity or otherwise shall be cumulative (and not
alternative) and shall not preclude assertion or seeking by a Party of
any other rights or remedies.

- 24 -

<PAGE> 25

11.10 Counterparts. This Agreement may be signed in any number of
counterparts, each of which (when executed and delivered) shall
constitute an original instrument, but all of which together shall
constitute one and the same instrument. This Agreement shall become
effective and be deemed to have been executed and delivered by all of
the Parties at such time as counterparts shall have been executed and
delivered by each of the Parties, regardless of whether each of the
Parties has executed the same counterpart. It shall not be necessary
when making proof of this Agreement to account for any counterparts
other than a sufficient number of counterparts which, when taken
together, contain signatures of all of the Parties.

11.11 Certain Expenses. Except as otherwise provided in this Agreement,
each Party agrees to pay all expenses, fees and costs (including,
without limitation, legal, accounting and consulting expenses) incurred
by it in connection with the transactions contemplated hereby.

11.12 No Partnership. Nothing contained herein shall be construed as
forming a partnership between the Parties.

IN WITNESS WHEREOF, the Parties have duly executed and delivered this Agreement
as of the date first above written.

OLEFINS TERMINAL CORPORATION JLM INDUSTRIES, INC.

By: By:
------------------------------------- --------------------------------
Its: Its:
------------------------------------ -------------------------------

D-S SPLITTER, INC.

By:
-------------------------------------
Its:
------------------------------------

- 25 -

<PAGE> 1
EXHIBIT 10.30
BAKER & McKENZIE
Chicago Office
PJHB/ILL
FINAL
April 14, 1997

INVESTMENT AGREEMENT

By and Between

JLM INDUSTRIES, INC.

and

TAN SIEW KIAT

Dated as of April 25, 1997

<PAGE> 2

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1 DEFINITIONS ................................................. 2
1.1 "Accounts Receivable" ....................................... 2
1.2 "Adverse Change" ............................................ 2
1.3 "Adverse Effect" and "Adverse" .............................. 2
1.4 "Affiliate" ................................................. 2
1.5 "Amended Articles" .......................................... 3
1.6 "Amendment" ................................................. 3
1.7 "Asia Shares" ............................................... 3
1.8 "Audited Financial Statements" .............................. 3
1.9 "Authority" ................................................. 3
1.10 "Business" .................................................. 3
1.11 "Business Day"............................................... 3
1.12 "Buyer" ..................................................... 3
1.13 "Buyer Claims" .............................................. 3
1.14 "Claims" ................................................... 3
1.15 "Companies" ................................................. 3
1.16 "Compete" and "Competing Business" .......................... 3
1.17 "Confidential Information" .................................. 3
1.18 "Contingent Payment" ........................................ 4
1.19 "Contingent Purchase Price" ................................. 4
1.20 "Contract" .................................................. 4
1.21 "Days" ...................................................... 4
1.22 "Defaulting Party" .......................................... 4
1.23 "Employee Benefit Plans" .................................... 4
1.24 "Encumbrances" .............................................. 4
1.25 "Environmental Law" ......................................... 4
1.26 "Exhibit" ................................................... 4
1.27 "Expiration Date" ........................................... 4
1.28 "Fiscal Year" ............................................... 4
1.29 "Fixed Purchase Price" ...................................... 4
1.30 "Historical Financial Statements" ........................... 4
1.31 "Indemnified Party" ......................................... 4
1.32 "Indemnifying Party" ........................................ 4
1.33 "Independent Accounting Firm" ............................... 5
1.34 "Initial Closing" ........................................... 5
1.35 "Initial Closing Date" ...................................... 5
1.36 "Intellectual Property Rights" .............................. 5
1.37 "Interest" .................................................. 5
1.38 "Liability" ................................................ 5
1.39 "Loss" and "Losses" ......................................... 5
1.40 "Material Contract" ......................................... 5
1.41 "Net Earnings" .............................................. 5
1.42 "Nonassessable" ............................................. 5
1.43 "Non-Defaulting Party" ...................................... 5
1.44 "Option Notice", "Option Price" and
"Option Shares" ............................................. 5
</TABLE>

<PAGE> 3

<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
1.45 "Permits" ................................................... 5
1.46 "Person" .................................................... 5
1.47 "Proprietary Information" ................................... 6
1.48 "Purchase Price" ............................................ 6
1.49 "Real Property" ............................................. 6
1.50 "Schedules" and "Schedule Updates" .......................... 6
1.51 "Second Closing" ............................................ 6
1.52 "Second Closing Date" ....................................... 6
1.53 "Seller" .................................................... 6
1.54 "Shares" .................................................... 6
1.55 "Singapore Dollars" ......................................... 6
1.56 "Singapore GAAP" ............................................ 6
1.57 "Subsidiaries" .............................................. 6
1.58 "Taxes" and "Tax Returns" ................................... 6
1.59 "Taxpayers" ................................................. 6
1.60 "Tenancy" ................................................... 6
1.61 "Termination Date" .......................................... 7
1.62 "Third Party" ............................................... 7
1.63 "Trading Shares" ............................................ 7
1.64 "United States Dollars" or "US$" ............................ 7
1.65 "U.S. GAAP" ................................................. 7
1.66 "Vietnam JV" ................................................ 7
1.67 "Vietnam Charter and Investment License" .................... 7
1.68 Other Definitional Provisions................................ 7

ARTICLE 2 TERMS OF PURCHASE OF SHARES ................................. 7
2.1 Purchase of Shares .......................................... 7
2.2 Purchase Price .............................................. 8
2.3 The Closings ................................................ 8
2.4 Deliveries .................................................. 9
2.5 Contingent Purchase Price ................................... 11

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER .................... 13
3.1 Corporate Status ............................... ............ 13
3.2 Ownership ................................................... 14
3.3 Authorized Share Capital .................................... 14
3.4 Power and Authority; Effect of Agreement .................... 14
3.5 Investments ................................... ............. 15
3.6 Financial Information ....................................... 15
3.7 Undisclosed Liabilities; Absence of Certain
Changes ..................................................... 16
3.8 Machinery and Equipment; Accounts Receivable;
Inventory ................................................... 16
3.9 Intellectual Property Rights ................................ 18
3.10 Litigation .................................................. 19
3.11 Compliance with Laws; Permits ............................... 19
3.12 Tax Matters ................................................. 21
</TABLE>

<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
3.13 Shareholder Agreements....................................... 22
3.14 Consents .................................................... 22
3.15 Environmental Matters ....................................... 22
3.16 Absence of Certain Changes or Events ........................ 23
3.17 Material Contracts (Including Related
Party Contracts) ............................................ 23
3.18 Employee Benefits; Employment Contracts and
Directors Remuneration....................................... 25
3.19 Real Property ............................................... 26
3.20 Insurance ................................................... 27
3.21 No Conflicts of Interest .................................... 28
3.22 Brokers ..................................................... 28
3.23 Disclosure .................................................. 28

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER .................... 13
4.1 Corporate Power and Authority; Effect........................ 13
of Agreement
4.2 Consents ................................................... 14
4.3 Absence of Litigation ....................................... 14
4.4 Brokers...................................................... 14

ARTICLE 5 UNDERTAKINGS OF THE PARTIES ................................. 30
5.1 Tax Relief and Grants ....................................... 30
5.2 Cooperation ................................................. 30
5.3 Conduct of Business Between Signing and Initial
Closing .................................................... 31
5.4 No Shop ..................................................... 32
5.5 Access to Information ....................................... 33
5.6 Further Assurances .......................................... 34
5.7 Amendments to Schedules ..................................... 34
5.8 Non-Competition/Non-Solicitation ............................ 35
5.9 Amended Articles .......................................... 36
5.10 Management of the Companies ................................ 36
5.11 Conduct of the Business of the Companies .................... 37
5.12 Commercial Relationships with the Vietnam JV ................ 38
5.13 Auditing, Accounting System, Information and
Reports ..................................................... 38
5.14 Transfers of Interests ...................................... 39
5.15 Agreements Between the Companies and the
Parties ..................................................... 39
5.16 Constituent Documents ....................................... 39

ARTICLE 6 CONDITIONS TO BUYER'S OBLIGATIONS ........................... 40
6.1 Representations and Warranties of Seller .................... 40
6.2 Performance of Undertakings ................................. 40
</TABLE>

iii

<PAGE> 5

Page
----
<S> <C> <C> <C>
6.3 No Pibition ................................................. 40
6.4 No Action ................................................... 40
6.5 No Adverse Change ........................................... 40
6.6 Governmental Approvals and Consents ......................... 41
6.7 Other Approvals and Consents ................................ 41
6.8 Construction of Vietnam JV Facility ......................... 41

ARTICLE 7 CONDITIONS TO SELLER'S OBLIGATIONS .......................... 41
7.1 Representations and Warranties of Buyer ..................... 42
7.2 Performance of Undertakings ................................. 42
7.3 No Prohibition .............................................. 42
7.4 No Action ................................................... 42
7.5 Governmental Approvals and Consents ......................... 42

ARTICLE 8 INDEMNIFICATION .............................................. 43
8.1 Seller's Indemnification ..................................... 43
8.2 Buyer's Indemnification ..................................... 43
8.3 Conditions of Indemnification ............................... 43
8.4 No Waiver of Subrogation .................................... 45
8.5 Remedies Cumulative ......................................... 45
8.6 Injunctive Relief ........................................... 45
8.7 General Provisions and Limitations ......................... 45
8.8 Right of Set-Off ............................................ 46
8.9 Cooperation of the Parties .................................. 47

ARTICLE 9 TERMINATION ................................................. 47
9.1 Termination Prior to the Initial Closing .................... 47
9.2 Procedure and Effect of Termination Prior
to Initial Closing .......................................... 48
9.3 Term and Termination after the Initial Closing .............. 49
9.4 Put Rights of Buyer ......................................... 50
9.5 Option Closing .............................................. 51

ARTICLE 10 DISPUTE RESOLUTION .......................................... 52
10.1 Arbitration ................................................. 52

ARTICLE 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . ............. 54
11.1 Survival of Representations, Warranties
and Undertakings ........................................... 54
11.2 Entire Agreement ............................................ 54
11.3 Successors and Assigns ...................................... 54
11.4 No Third Party Beneficiary Rights ........................... 54
11.5 No Agency ................................................... 55
</TABLE>

<PAGE> 6

Page
----
<S> <C> <C> <C>
11.6 Counterparts................................................. 55
11.7 Interpretation............................................... 55
11.8 Amendment and Modification................................... 55
11.9 Waiver of Compliance; Consents............................... 55
11.10 Expenses; Transfer Taxes; Attorneys' Fees ................... 55
11.11 Notices...................................................... 56
11.12 Public Announcements......................................... 57
11.13 Governing Law ............................................... 58
</TABLE>

LIST OF SCHEDULES AND EXHIBITS

SCHEDULES
<S> <C>

Schedule 3.1 Corporate Status.

Schedule 3.3 Authorized Share Capital.

Schedule 3.5 Investments.

Schedule 3.6 Financial Information.

Schedule 3.7 Undisclosed Liabilities; Absence of Certain
Changes.

Schedule 3.8(a) Machinery and Equipment.

Schedule 3.8(b) Accounts Receivable.

Schedule 3.10 Litigation.

Schedule 3.11(c) U.S. Export Controls.

Schedule 3.11(d) U.S. Anti-Boycott Legislation.

Schedule 3.11(e) Permits.

Schedule 3.12 Tax Matters.

Schedule 3.13 Shareholder Agreements.

Schedule 3.14 Consents.

Schedule 3.15 Environmental Matters.

Schedule 3.16 Absence of Certain Changes or Events.

Schedule 3.17(a) Tenancy.

Schedule 3.17(b) Material Contracts.

Schedule 3.17(c) Breach of Material Contracts or the Tenancy.

Schedule 3.18(a) Employee Benefit Plans.

Schedule 3.18(d) Personnel Services.

Schedule 3.19(a) Real Property.
</TABLE>

<PAGE> 8
<TABLE>
<S> <C>
Schedule 3.20(a) Insurance.

Schedule 3.20(b) Guarantees and Bonds.

EXHIBITS

Exhibit 1.5 Amended Articles.

Exhibit 3.1 Certified copy of the memorandum and articles of
association of the Companies as currently in force.

</TABLE>

vii

<PAGE> 9

INVESTMENT AGREEMENT

THIS INVESTMENT AGREEMENT, made and entered into as of this __________
day of April, 1997, by and between:

JLM Industries, Inc., a corporation organized under the laws of the State of
Delaware, United States of America, having its principal place of business at
8675 Hidden River Parkway, Tampa, Florida 33637, United States of America (the
"Buyer"); and

Tan Siew Kiat, an individual resident at 135 Sunset Way No. 01-04, Singapore
597158 (the "Seller").

W I T N E S S E T H:

WHEREAS, Buyer is engaged in, among other things, the marketing,
distribution and terminating of bulk commodity chemicals and olefins;

WHEREAS, SK Chemicals Asia Pte. Ltd., a private limited company organized
under the laws of Singapore having its registered office at 16B Trengganu
Street, Singapore 058470 ("Asia"), has made an indirect investment in the
capital of ICP-Chemquest Vietnam Ltd., a Vietnamese joint venture company (the
"Vietnam JV"), through its wholly-owned subsidiary, SK Chemicals (Singapore)
Pte. Ltd. (formerly Valdular Pte. Ltd.), a private limited company organized
under the laws of Singapore, and SK Chemical Trading Pte. Ltd., a private
limited company organized under the laws of Singapore having its registered
office at 16B Trengganu Street, Singapore 058470 ("Trading"), has made a direct
investment in the capital of the Vietnam JV;

WHEREAS, Buyer desires to acquire from Seller and Seller desires to sell to
Buyer, a portion of the shares of Asia and Trading, subject to the satisfaction
of certain conditions contained in this Agreement;

NOW, THEREFORE, in consideration of the foregoing premises and the
respective representations, warranties, undertakings, indemnifications and
agreements, and upon the terms and subject to the conditions hereinafter set
forth, and intending to be legally bound hereby the parties do hereby agree as
follows:

<PAGE> 10

ARTICLE 1

DEFINITIONS

As used in this Agreement, the following terms when capitalised have the
meanings set forth below:

1.1 "Accounts Receivable" has the meaning set forth in Section 3.8
(b).

1.2 "Adverse Change" means:

(a) in respect of Seller or the Companies, the commencement of a
voluntary proceeding under applicable bankruptcy laws or laws regarding the
suspension of payments, or of a proceeding to be adjudicated bankrupt or
insolvent, or the consent by them to the institution of such proceedings against
them, or the filing by them of a petition or answer or consent seeking
reorganization, an arrangement or similar relief under applicable bankruptcy
laws, or the consent by them to the appointment of a receiver, liquidator,
trustee or similar official for them or for a substantial part of their
property, or the making by them of an assignment for the benefit of creditors,
or the admission by them in writing of their inability to pay their debts
generally as they become due;

(b) Seller or the Companies becoming in any manner directly or
indirectly controlled by any Authority, or any Authority taking any action that
has or that, with the passage of time or the giving of notice, or both, would
have an Adverse Effect on the Companies or an Adverse Effect on Buyer's rights
under this Agreement;

(c) Seller or the Companies, as the case may be, violating in any
respect any of its obligations under this Agreement and (if such default shall
be curable) such default continuing unremedied for a period of sixty (60) Days
after written notice from Buyer of such default; or

(d) any other event, circumstance or condition which has or
which, with the passage of time or the giving of notice, or both, would have an
Adverse Effect on Buyer's rights under this Agreement or an Adverse Effect on
the Companies.

1.3 "Adverse Effect" and "Adverse" mean an adverse effect on the
condition (financial or otherwise), business, operations, affairs, prospects,
assets or Liabilities of the referenced Person, which in the aggregate reduces
the profits, turnover or net asset value of Asia and Tradings by 20% or more.

1.4 "Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or

<PAGE> 11

under common control with such Person as well as the shareholders, directors and
managers of such Person, and any grandparent, parent, child or grandchild of
such Person; for purposes of this definition, "control" shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of an entity, whether through the
ownership of voting securities or otherwise.

1.5 "Amended Articles" shall mean the amended memorandum and
articles of association of the Companies in the form and content attached hereto
as Exhibit 1.5.

1.6 "Amendment" has the meaning set forth in Section 5.7.

1.7 "Asia Shares" has the meaning set forth in Section 2.1.

1.8 "Audited Financial Statements" have the meanings set forth in
Section 3.6(a).

1.9 "Authority" means any international, supranational, regional,
national, provincial, departmental, state, local, municipal or other
administrative, governmental or regulatory authority, body, court, bureau,
agency or instrumentality.

1.10 "Business" has the meaning set forth in Section 5.8(b)(i).

1.11 "Business Day" is referable to the local time of the place
where an action is to be done or an obligation is to be performed or observed,
and means any Day that is not a Saturday, a Sunday or a Day on which banks are
required or permitted to be closed in the relevant place, being Tampa, Florida,
U.S.A., or Singapore.

1.12 "Buyer" has the meaning set forth in the preamble to this
Agreement.

1.13 "Buyer Claims" has the meaning set forth in Section 8.1(a).

1.14 "Claims" has the meaning set forth in Section 8.2.

1.15 "Companies" means each of Asia, Trading and each of their
Subsidiaries mutatis mutandis.

1.16 "Compete" and "Competing Business" have the meanings set
forth in Section 5.8(b)(ii).

1.17 "Confidential Information" has the meaning set forth in
Section 5.5(b).

<PAGE> 12

1.18 "Contingent Payment" has the meaning set forth in Section 2.5(b).

1.19 "Contingent Purchase Price" has the meaning set forth in Section
2.2(a)(ii).

1.20 "Contract" means any agreement, arrangement, bond, commitment,
contract, deed, indenture, instrument, lease, license, mortgage, note, option,
purchase order, subscription, undertaking, warrant or understanding of any
nature whatsoever, whether written or oral.

1.21 "Days" means calendar days.

1.22 "Defaulting Party' has the meaning set forth in Section 9.3(c).

1.23 "Employee Benefit Plans" has the meaning set forth in Section
3.18(a).

1.24 "Encumbrances" means all liens, mortgages, charges, attachments,
judgments, conditional sale agreements, pledges, rights of usufruct, options,
rights of first refusal, rights of possession, restrictions on transfer, voting
agreements, security interests or other rights or claims of others or
restrictions or encumbrances of any character whatsoever.

1.25 "Environmental Law" has the meaning set forth in Section 3.15.

1.26 "Exhibit" means each of the exhibits referred to in this
Agreement, including Article 3 hereof, containing information concerning Seller
and the Companies.

1.27 "Expiration Date" has the meaning set forth in Section 11.1.

1.28 "Fiscal Year" means the calendar years commencing with the year
1997.

1.29 "Fixed Purchase Price" has the meaning set forth in Section
2.2(a)(i).

1.30 "Historical Financial Statements" has the meaning set forth
in Section 3.6(a).

1.31 "Indemnified Party" has the meaning set forth in Section 8.3(a).

1.32 "Indemnifying Party" has the meaning set forth in Section 8.3.

<PAGE> 13

1.33 "Independent Accounting Firm" has the meaning set forth in
Section 2.5(d).

1.34 "Initial Closing" shall mean the completion of the purchase of
the Asia Shares and the other transactions to be consummated at such time as
contemplated in this Agreement.

1.35 "Initial Closing Date" has the meaning set forth in Section
2.3(a).

1.36 "Intellectual Property Rights" has the meaning set forth in
Section 3.9(a).

1.37 "Interest" has the meaning set forth in Section 5.8(b) (iii).

1.38 "Liability" means any debt, obligation, commitment,
responsibility or liability, whether accrued or fixed, known or unknown,
contingent or absolute, primary or secondary, secured or unsecured, determined
or undetermined and whenever arising.

1.39 "Loss" and "Losses" have the meanings set forth in Section
8.1(a).

1.40 "Material Contract" has the meaning set forth in Section 3.17(b).

1.41 "Net Earnings" has the meaning set forth in Section 2.5(a).

1.42 "Nonassessable" means that the owners of record of the relevant
equity interest or investment in the equity capital of the Companies are not
liable, solely by reason of such shareholding, for the payment of any taxes,
duties, wages, or other amounts for which the Person which issued such interest
or capital is liable.

1.43 "Non-Defaulting Party" has the meaning set forth in Section
9.3(c).

1.44 "Option Notice", "Option Price" and "Option Shares" have the
meanings set forth in Section 9.4(a).

1.45 "Permits" has the meaning set forth in Section 3.11(f).

1.46 "Person" includes an individual, a company, a firm, a
partnership, a joint venture, a corporation, a limited liability company, a
trust, an estate, an unincorporated association or any other organization of any
kind.

<PAGE> 14

1.47 "Proprietary Information" has the meaning set forth in Section
3.9(b).

1.48 "Purchase Price" has the meaning set forth in Section 2.2(a).

1.49 "Real Property" has the meaning set forth in Section 3.19(a).

1.50 "Schedules" and "Schedule Updates" means each of the disclosure
schedules referred to in this Agreement, including Article 3 hereof, containing
information concerning Seller and the Companies. "Schedule Updates" has the
meaning set forth in Section 5.7.

1.51 "Second Closing" shall mean the completion of the purchase of the
Trading Shares and the other transactions to be consummated at such time as
contemplated in this Agreement.

1.52 "Second Closing Date" has the meaning set forth in Section
2.3(b).

1.53 "Seller" has the meaning set forth in the Preamble to this
Agreement.

1.54 "Shares" means all of the issued and outstanding shares of Asia
and Trading (as the case may be) for the time being.

1.55 "Singapore Dollars" and the symbol "S$" mean Singapore Dollars,
the lawful currency of Singapore as of the date of this Agreement.

1.56 "Singapore GAAP" means Singapore's generally accepted accounting
principles.

1.57 "Subsidiaries" means (a) the Vietnam JV; and (b) any Person with
respect to which the Companies directly or indirectly have an equity
participation, individually and collectively, on the date hereof and/or on the
Initial Closing Date, equal to or exceeding 50% or otherwise controls the
management or operations thereof.

1.58 "Taxes" and "Tax Returns" have the meanings set forth in Section
3.12(h).

1.59 "Taxpayers" has the meaning set forth in Section 3.12(a).

1.60 "Tenancy" has the meaning set forth in Section 3.17(a).

<PAGE> 15

1.61 "Termination Date" has the meaning set forth in Section 2.3

1.62 "Third Party" has the meaning set forth in Section 8.(b).

1.63 "Trading Shares" has the meaning set forth in Section 2.1.

1.64 "United States Dollars" or "US$" shall mean United States
Dollars, the lawful currency of the United States of America as of the date of
this Agreement.

1.65 "U.S. GAAP" means United States' generally accepted accounting
principles.

1.66 "Vietnam JV" has the meaning set forth in the recitals.

1.67 "Vietnam Charter and Investment License" has the meaning set
forth in Section 3.5.

1.68 Other Definitional Provisions. Whenever the context so requires,
each of the neuter, masculine or feminine forms of any pronoun shall include all
such forms, the singular shall include the plural and the plural shall include
the singular. References to "this Agreement" include all Exhibits and Schedules
hereto.

ARTICLE 2

TERMS OF PURCHASE OF SHARES

2.1 Purchase of Shares. Subject to the terms and conditions of this
Agreement, Seller shall sell and deliver to Buyer, and Buyer shall purchase from
Seller, for the Purchase Price set forth in Section 2.2(a), that number of
Shares of Asia at the Initial Closing as shall immediately following such
purchase constitute twenty-five percent (25.00%) of the Shares of Asia on the
Initial Closing Date (the "Asia Shares"), and that number of Shares of Trading
at the Second Closing as shall immediately following such purchase constitute
twelve and 745/1000 percent (12.745%) of the Shares of Trading on the Second
Closing Date (the "Trading Shares"), free and clear of all Encumbrances (except
as set forth herein and in the Amended Articles) and together with all rights
now and hereafter attaching thereto. Upon such sale and transfer, Asia and
Trading shall record on their respective share transfer books that Buyer is the
owner as of the Initial Closing Date of the Asia Shares and as of the Second
Closing Date of the Trading Shares.

<PAGE> 16

2.2 Purchase Price.

(a) The cash consideration to be paid by Buyer to Seller for
the Asia Shares and Trading Shares (the "Purchase Price") shall be a:

(i) fixed amount of US$1,000,000 (One Million United States
Dollars) less the amount of Buyer's deposits to Seller relating to the Letter of
Intent dated September 12, 1996 (the "Fixed Purchase Price"); and

(ii) contingent amount of US$500,000 (Five Hundred Thousand
United States Dollars), subject to the provisions of Section 2.5 (the
"Contingent Purchase Price").

(b) Payment of one-half of the Fixed Purchase Price by Buyer shall
be made in United States Dollars at the Initial Closing by delivery to Seller of
a cashier's order or banker's cheque in immediately available United States
Dollar funds payable to Seller or Seller's nominee in the amount of one-half of
the Fixed Purchase Price. Payment of the other one-half of the Fixed Purchase
Price by Buyer shall be made in United States Dollars at the Second Closing by
delivery to Seller of a cashier's order or banker's cheque in immediately
available United States Dollar funds payable to Seller or Seller's nominee in
the amount of the other one-half of the Fixed Purchase Price.

2.3 The Closings.

(a) The Initial Closing. The Initial Closing shall take place
at the offices of the Companies, commencing at 9:00 a.m. (Singapore time) on
____________, 1997, or at such other time and date as Seller may specify by
giving Buyer at least seven (7) Days' notice thereof (the "Initial Closing
Date"), provided that all of the conditions set forth in Articles 6 and 7 to the
parties' obligations at the Initial Closing have been satisfied or waived. All
matters at the Initial Closing shall be considered to take place simultaneously
and no delivery of any document shall be deemed complete until all transactions
and deliveries of documents are completed. If the Initial Closing shall not have
occurred by June 30, 1997 (the "Termination Date"), then Buyer shall have the
right, pursuant to Section 9.1(b) to terminate and cancel this Agreement in its
entirety.

(b) The Second Closing. The Second Closing shall take place
at the offices of the Companies, commencing at 9:00 a.m. (Singapore time) on
___________, 1997, or at such other time and date as Seller may specify by
giving Buyer at least seven (7) Days' notice thereof (the "Second Closing
Date"), upon the commencement of construction of the Vietnam JV facilities set
forth in the Vietnam Charter and Investment License, provided that all of the
conditions set forth in Articles 6 and 7 to the parties'

<PAGE> 17

obligations at the Second Closing have been satisfied or waived. All matters at
the Second Closing shall be considered to take place simultaneously and no
delivery of any document shall be deemed complete until all transactions and
deliveries of documents are completed.

2.4 Deliveries.

(a) Deliveries at the Initial Closing.

(i) Deliveries by Buyer. At the Initial Closing, Buyer
shall deliver or cause to be delivered the following:

(A) one-half of the Fixed Purchase Price in the manner
provided in Section 2.2(b);

(B) a certificate of Buyer to the effect that (1) the
representations and warranties of Buyer set forth in Article 4 are true and
correct as of the Initial Closing Date; and (2) Buyer has performed and complied
with each and every undertaking, agreement and condition required to be
performed or complied with by Buyer prior to or on the Initial Closing Date;

(C) copies, certified by the Secretary or an Assistant
Secretary of Buyer as duly adopted and in full force and effect, of resolutions
of the Board of Directors of Buyer approving this Agreement and authorizing the
transactions contemplated hereby; and

(D) any other documents, instruments and writings
required to be delivered by Buyer prior to or on the Initial Closing Date
pursuant to the terms of this Agreement.

(ii) Deliveries by Seller. At the Initial Closing, Seller
shall deliver or cause to be delivered the following:

(A) share certificates representing the Asia Shares
(with a corresponding transfer form, if necessary) duly executed in favor of
Buyer or its designee (or at the latest, fourteen (14) days after the Initial
Closing);

(B) a receipt duly issued by Seller for one-half of the
Fixed Purchase Price (or at the latest, upon the availability of such funds to
Seller);

(C) a certificate of Seller to the effect that (1) the
representations and warranties of Seller set forth in Article 3 were true and
correct when made and, except for any changes therein expressly contemplated by
this Agreement, are true and correct on and as of the Initial Closing Date as
though such

<PAGE> 18

representations and warranties were made on such date; and (2) Seller has
performed and complied with each and every undertaking, agreement and condition
required to be performed or complied with by it prior to or on the Initial
Closing Date;

(D) a copy of the minutes of a shareholders' meeting of
Asia duly certified /the Amended Articles; and / and adopting

(E) any other documents, instruments and writings
required to be delivered by Seller prior to or on Initial Closing pursuant to
the terms of this Agreement.

(b) Deliveries at the Second Closing.

(i) Deliveries by Buyer. At the Second Closing, Buyer shall
deliver or cause to be delivered the following:

(A) one-half of Fixed Purchase Price to Seller in the
manner provided in Section 2.2(b).

(B) a certificate of Buyer to the effect that (1)
except for any changes expressly contemplated by this Agreement, the
representations and warranties of Buyer set forth in Article 4 are true and
correct at and as of the Second Closing Date as though such representations and
warranties were made on the Second Closing Date; and (2) Buyer has performed and
complied with each and every undertaking, agreement and condition required to be
performed or complied with by Buyer prior to or on the Second Closing Date; and

(C) any other documents, instruments and writings
required to be delivered by Buyer at or prior to the Second Closing pursuant to
the terms of this Agreement.

(ii) Deliveries by Seller. At the Second Closing, Seller
shall deliver or cause to be delivered the following:

(A) share certificates representing the Trading Shares
(with a corresponding transfer form, if necessary) duly executed in favor of
Buyer or its designee (or at the latest, fourteen (14) days after the Second
Closing);

(B) a duly executed receipt by Seller for one-half of
the Fixed Purchase Price (or at the latest, upon the availability of such
funds to Seller);

(C) a certificate of Seller to the effect that (1)
except for any changes expressly contemplated by this Agreement and reasonably
set forth in such certificate (including any updated Schedules attached thereto)
reflecting any changes in the relevant facts, circumstances or law occurring
after the

<PAGE> 19

Initial Closing Date, the representations and warranties of Seller set forth in
Article 3 are true and correct at and as of the Second Closing Date as though
such representations and warranties were made on the Second Closing Date; and
(2) Seller has performed and complied with each and every undertaking, agreement
and condition required to be performed or complied with by it prior to or on the
Second Closing now.

(D) a copy of the minutes of a shareholder meeting of
Trading duly certified /adopting the Amended Articles; / and

(E) copies of any additional approvals or consents of
any Persons which after the Initial Closing Date have become necessary for the
consummation of any transaction to be consummated hereunder on the Second
Closing Date; and

(F) any other documents, instructions and writings
required to be delivered by Seller at or prior to the Second Closing pursuant to
the terms of this Agreement.

2.5 Contingent Purchase Price. After the Initial Closing,
the Contingent Purchase Price shall be calculated and determined in accordance
with this Section 2.5.

(a) Within ninety (90) Days after the end of Fiscal Years
1998, 1999, 2000 and 2001, Seller shall procure that Asia and Trading deliver or
cause to be delivered to Buyer Audited Financial Statements of the Companies,
prepared in accordance with Singapore GAAP, applied on a consistent basis. Buyer
shall cause Buyer's accountants to review the Audited Financial Statements in
accordance with Singapore GAAP. Seller shall cause Seller's accountants to
cooperate fully with Buyer's accountants in conducting their review. The report
of Buyer's accountants on the Audited Financial Statements shall be delivered to
Buyer and Seller no later than thirty (30) Days after Buyer has received the
Audited Financial Statements from Asia and Trading. The Audited Financial
Statements, as reviewed by Buyer's accountants and subject to Section 2.5(d),
and the net earnings before taxes of Asia and Trading as of the end of Fiscal
Years 1998, 1999, 2000 and 2001 as shown on the Audited Financial Statements and
reviewed by Buyer's accountants, provided that a net loss incurred in any Fiscal
Year shall not be carried back to offset earnings for any prior Fiscal Year, but
shall be carried forward to offset earnings for subsequent Fiscal Years (the
"Net Earnings"), shall be final and binding among the parties for purposes of
any Contingent Purchase Price calculation and determination pursuant to this
Section 2.5. The translation rate into or from United States Dollars shall be at

<PAGE> 20

the closing exchange rate published in The Wall Street Journal (U.S. edition) as
of the last Business Day of the relevant Fiscal Year.

(b) Buyer shall pay Seller as the Contingent Purchase Price
an annual payment for a period of four (4) years equal to US$125,000 (One
Hundred Twenty-Five Thousand United States Dollars) for each Fiscal Year,
beginning with January 1, 1998 (or beginning January 1, 1999 mutatis mutandis if
construction of the Vietnam JV facilities commences during Fiscal Year 1998),
during which Asia and Trading collectively achieve Net Earnings of US$500,000
(Five Hundred Thousand United States Dollars), calculated and determined as
follows and herein referred to as the "Contingent Payment":

(i) For the Fiscal Year 1998 - US$125,000 (One Hundred
Twenty-Five Thousand United States Dollars) if 1998 Net Earnings equal or exceed
US$500,000 (Five Hundred Thousand United States Dollars);

(ii) For the Fiscal Year 1999 - US$125,000 (One Hundred
Twenty-Five Thousand United States Dollars) if 1999 Net Earnings equal or exceed
US$500,000 (Five Hundred Thousand United States Dollars), or if 1998 and 1999
Net Earnings together equal or exceed US$1,000,000 (One Million United States
Dollars);

(iii) For the Fiscal Year 2000 -US$125,000 (One Hundred
Twenty-Five Thousand United States Dollars) if 2000 Net Earnings equal or exceed
US$500,000 (Five Hundred Thousand United States Dollars), or if 1998, 1999 and
2000 Net Earnings together equal or exceed US$1,500,000 (One Million Five
Hundred Thousand United States Dollars); and

(iv) For the Fiscal Year 2001 - US$125,000 (One Hundred
Twenty-Five Thousand United States Dollars) if 2001 Net Earnings equal or exceed
US$500,000 (Five Hundred Thousand United States Dollars), or if 1998, 1999, 2000
and 2001 Net Earnings together equal or exceed US$2,000,000 (Two Million United
States Dollars).

(c) Each Contingent Payment shall be payable within fifteen
(15) Business Days after the delivery by Buyer's accountants to Seller and Buyer
of the Audited Financial Statements in accordance with Section 2.5(a) or Section
2.5(d) (as the case may be) by delivery of a bank cashier's cheque or by wire
transfer in such amount, payable to Seller or Seller's nominee.

(d) If Buyer in good faith objects to the Audited Financial
Statements, then Buyer and Seller and their respective accountants shall attempt
to resolve the disputed matters within

<PAGE> 21

thirty (30) Days of the receipt by Seller of notice from Buyer of the disputed
matters. If Buyer and Seller and their accountants are unable to resolve the
matter within such thirty (30) Day period, then Buyer and Seller shall jointly
appoint a mutually acceptable firm from among the six (6) largest
internationally recognized public accounting firms (or, if they cannot agree on
a mutually acceptable firm within five (5) Days of the end of such thirty (30)
Day period, they shall cause their respective accountants to select within a
further period of ten (10) Days such firm from among the six (6) largest
internationally recognized public accounting firms), excluding any such
accounting firm which has been engaged by any of the parties or their Affiliates
to audit the accounts of such Person or its Affiliates within the preceding
five-year period. The accounting firm so selected is herein referred to as the
"Independent Accounting Firm". The parties shall provide such firm with full
cooperation. The Independent Accounting Firm shall be instructed to reach its
conclusion regarding the disputed matters, acting as experts and not as
arbitrators, within sixty (60) Days. The Independent Accounting Firm's
resolution of the disputed matters shall be conclusive and binding upon all the
parties. The fees of the Independent Accounting Firm shall be borne equally
(50/50) by Buyer and Seller.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF SELLER

Subject to Section 3.24 Seller represents and warrants to Buyer as
follows:

3.1 Corporate Status. Asia and Trading are private limited companies
having their registered offices at 16B Trengganu Street, Singapore 058470. The
Companies are duly organized and validly existing under the laws of Singapore
and Vietnam (as the case may be) and have all requisite corporate power and
authority to own and lease their properties and to carry on their business as
and where the same is now conducted. The Companies are duly registered, in good
standing and qualified as a foreign corporation to do business in all other
jurisdictions in which the nature of their assets or business makes such
qualification necessary except where the failure to be so qualified would have
no Adverse Effect on the Companies' business. Each jurisdiction in which the
Companies are so registered and qualified or have an office, branch, warehouse
or establishment of any kind outside of their jurisdiction of organization is
identified in Schedule 3.1. A certified copy of the memorandum and articles of
association of the Companies as currently in force is contained in Exhibit 3.1.

<PAGE> 22

3.2 Ownership. Seller owns of record and beneficially and has good
title to the Asia Shares and Trading Shares, and Seller owns the Asia Shares and
Trading Shares free and clear of all Encumbrances, except as contemplated herein
and in the Amended Articles.

3.3 Authorized Share Capital. The authorized share capital of Asia and
Trading consists of 3,000,000 (three million) ordinary shares, and 2,000,000 and
1,050,000 (two million and one million fifty thousand) ordinary shares,
respectively, with a par value of S$1.00 (One Singapore Dollar) and US$1.00 (One
United States Dollar), respectively, per share. As of the respective date of
issuance of the Asia and Trading Shares to Buyer, all of the equity interest or
investment in the equity capital in the Companies shall be duly and validly
authorized and issued, fully paid and Nonassessable. Except as set forth in
Schedule 3.3, or as provided in this Agreement, there is no Contract, call or
right of any nature whatsoever with respect to the allotment, issuance, sale,
delivery or transfer of any equity interest or investment in the equity capital
of the Companies, including any right of conversion or exchange under any
security or other instrument.

3.4 Power and Authority: Effect of Agreement.

(a) Seller has all requisite power and authority to execute,
deliver and perform this Agreement, and to consummate the transactions
contemplated hereby.

(b) The execution, delivery, and performance by Seller of
this Agreement and the consummation by Seller of the transactions contemplated
hereby have been duly authorized to the extent necessary by the Companies, and
no other corporate action or proceeding on the part of the Companies or its
respective shareholders is necessary to authorize this Agreement or the
consummation of any of the transactions contemplated hereby.

(c) This Agreement has been duly and validly executed and
delivered by Seller. This Agreement constitutes the valid and binding obligation
of Seller enforceable against Seller in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally.

(d) The execution, delivery and performance by Seller of
this Agreement, and the consummation by Seller of the transactions contemplated
hereby do not and will not (i) violate any law, rule or regulation to which
either Seller or the Companies, or any of their respective assets or properties
is subject (ii) violate any order writ, injunction, judgment or

<PAGE> 23

decree applicable to either Seller or the Companies, or any of their respective
assets or properties, (iii) conflict with, or result in a breach of any term or
condition of the memorandum and articles of association of the Companies or (iv)
conflict with, or result in a breach of or default under, or give rise to any
right of termination, cancellation or acceleration under, any of the terms,
conditions or provisions of any Contract to which either Seller or the Companies
is a party or by which either of them or any of their respective assets or
properties may be bound.

3.5 Investments. The Companies or other Persons own of record and
beneficially and have good title to and unrestricted voting rights in respect of
all of the equity interest or investment in the equity capital of the Companies
(including, without limitation, the Vietnam JV), in the amounts shown on
Schedule 3.5, and the Companies or other Persons own the equity interest or
investment in the equity capital of the Companies (including, without
limitation, the Vietnam JV) free and clear of all Encumbrances, except as
contemplated herein and in the Charter dated December 28, 1994 establishing the
Vietnam JV and the Investment License dated June 22, 1995 issued by the Vietnam
State Committee for Cooperation and Investment (the "Vietnam Charter and
Investment License"). Each of Seller and the Companies is not a party to (nor
are they aware of) any agreement, understanding or arrangement, direct or
indirect, relating to the equity interest or investment in the equity capital in
the Vietnam JV, including, without limitation, voting or sale thereof, except as
contemplated in the Vietnam Charter and Investment License. Each of Seller and
the Companies does not have, nor pursuant to any agreement will it have, the
right or obligation to acquire by any means, an equity interest or investment in
the equity capital of any corporation, partnership, joint venture or other
Person, except as contemplated herein.

3.6 Financial Information.

(a) Seller has previously furnished to Buyer certain financial
statements (true, correct and complete copies of which are attached hereto as
Schedule 3.6) as follows: (i) audited balance sheets and the related audited
statements of profits and losses, shareholders equity and fund flows (including
the related notes) for the Companies for each of the fiscal years ended December
31, 1995 and December 31, 1994, accompanied by the reports thereon by the
Companies, auditors (collectively, the "Audited Financial Statements"); and (ii)
the unaudited balance sheets and the related unaudited statements of profits and
losses, shareholders equity and fund flows (including related notes) for the
Companies, for the twelve (12) months ended December 31, 1996 (the "Unaudited
Financial Statements"; together with the Audited Financial Statements, the
"Historical Financial Statements").

<PAGE> 24

(b) The Historical Financial Statements (i) were prepared from
the books and records of the Companies, which books and records accurately
reflect the accounts and transactions recorded therein, (ii) present fairly the
financial position and results of operations of the Companies, as of and for the
periods to which they relate, (iii) have been prepared in accordance with
Singapore GAAP and past accounting practices consistently applied throughout the
periods covered, except as otherwise noted therein or with respect to the
omission of normal and recurring year-end adjustments and notes related thereto,
(iv) reflect adequate recognition of profits and provisions for losses on
contracts in accordance with Singapore GAAP applied on a consistent basis except
as reflected therein, stated separately.

(c) The books, records and accounts of the operations of the
Companies accurately and fairly reflect, in reasonable detail, transactions in
and dispositions of the assets of the operations of the Companies. The Companies
maintain a system of internal accounting controls reasonably adequate to assure
that transactions are executed in accordance with management authorization and
are recorded as necessary to permit preparation of financial statements in
accordance with Singapore GAAP and to permit access to assets only in accordance
with management authorization.

3.7 Undisclosed Liabilities; Absence of Certain Changes. The Companies
have no Liabilities, except Liabilities (i) which are fully reflected, reserved
against or disclosed in the Historical Financial Statements; (ii) which were or
are incurred (by the Companies) in the ordinary course of business and
consistent with past practice since December 31, 1996 and which do not exceed in
the aggregate S$200,000.00 (Two Hundred Thousand Singapore Dollars); or (iii)
which are set forth in Schedule 3.7. The Companies have reserved for all
Liabilities for which reserves should be established in accordance with
Singapore GAAP, and all such reserves, including those set forth in the
Historical Financial Statements, are adequate in all respects.

3.8 Machinery and Equipment; Accounts Receivable; Inventory.

(a) Machinery and Equipment. Schedule 3.3(a) contains a true
and complete list and brief description of all items of machinery, dies,
computer, data processing and other equipment, office furniture, vehicles,
fixtures and similar tangible personal property owned, used or leased by the
Companies and a brief description of the rights of the Companies therein. Except
as otherwise explained on Schedule 3.8(a), all tangible personal property
reflected on the Historical Financial Statements is set forth on Schedule
3.8(a). Each of such items of machinery,

<PAGE> 25

dies, computer, data processing and other equipment, office furniture, vehicles,
fixtures and similar tangible personal property is in good operating condition
and repair, is currently used in the day-to-day operations of the Companies, and
is reasonably necessary or material to the business or operation of the
Companies as currently conducted. The Companies have good title to (or, as
described on Schedule 3.8(a) a valid leasehold right in, as the case may be) all
the properties listed on Schedule 3.8(a) as owned, used or leased by the
Companies, free and clear of all Encumbrances, liens for current taxes not yet
due or which are being contested in good faith by appropriate proceedings and
for which appropriate reserves have been established and disclosed in writing to
Buyer, or as set forth on Schedule 3.8(a) and which do not (i) detract from or
interfere with their present use or otherwise impair business operations, or
(ii) render title unmarketable. Except as set forth on Schedule 3.8(a), all
tangible personal property used by the Companies is located on the Real Property
set forth on Schedule 3.19(a).

(b) Accounts Receivable. All accounts receivable of the
Companies that are reflected on the Historical Financial Statements or on the
accounting records of the Companies as of the Closing Date (collectively, the
"Accounts Receivable") represent or will represent valid obligations arising
from sales actually made or services actually performed in the ordinary course
of business. Unless paid prior to the Closing Date, the Accounts Receivable are
or will be as of the Closing Date current and collectible net of the respective
reserves shown on the Historical Financial Statements or on the accounting
records of the Companies as of the Closing Date (which reserves are adequate and
calculated consistent with past practice and, in the case of the reserve as of
the Closing Date, will not represent a greater percentage of the Accounts
Receivable as of the Closing Date than the reserve reflected in the Historical
Financial Statements represented of the Accounts Receivable reflected therein
and will not represent a material Adverse Change in the composition of such
Accounts Receivable in terms of aging). Except as set forth on Schedule 3.8(b),
subject to such reserves, to the best knowledge of Seller after due inquiry,
each of the Accounts Receivable either has been or will be collected in full,
without any set-off. The Companies shall use their best efforts to collect the
Accounts Receivable in the ordinary course of business. There is no contest,
claim, or right of set-off, other than returns in the ordinary course of
business, under any Contract with any obligor of an Accounts Receivable relating
to the amount or validity of such Accounts Receivable. Schedule 3.8(b) contains
a complete and accurate list of all Accounts Receivable as of December 31, 1996,
which list sets forth the aging of such Accounts Receivable.

<PAGE> 26

(c) Inventory. All inventory of the Companies, whether or not
reflected in the Historical Financial Statements, consists of a quality and
quantity usable and salable in the ordinary course of business, except for
obsolete items and items of below-standard quality, all of which have been
written off or written down to net realizable value in the Historical Financial
Statements or on the accounting records of the Companies as of the Closing Date,
as the case may be. All inventories not written off have been priced at the
lower of cost or net realizable value on a first in, first out basis. The
quantities of each item of inventory (whether raw materials, work-in-process, or
finished goods) are not excessive, but are reasonable in the present
circumstances of the Companies.

3.9 Intellectual Property Rights.

(a) There are no registered patents, trademarks and service
marks, applications for patent, trademark and service mark registrations,
copyrights and copyright registrations owned by the Companies (the "Intellectual
Property Rights"). In addition, (i) no other Person or Authority is licensed or
authorized by the Companies to use any of the Intellectual Property Rights; (ii)
the Companies do not use any of the Intellectual Property Rights by consent of
or license from any other rightful owner or licensor thereof; (iii) the
operation of the business of the Companies as now being conducted does not
conflict with any patents, trademarks, service marks, names, trade names or
copyrights of others in any way; (iv) there is no pending litigation or
proceeding in or before any Person or Authority, nor have the Companies received
any notice or other communication, in which any of the Intellectual Property
Rights are being challenged or contested; (v) the Companies have not received
any protests, claims, notices, or other communications relating to infringement
of the rights of others arising from the present use of the Intellectual
Property Rights; (vi) the Companies have not contracted to provide
indemnification for infringement of the intellectual property rights of others,
or to grant any license of the Intellectual Property Rights to any other Person
or Authority, or receive a license to use any patent, trademark or copyright
from a third party or to undertake not to sue any other Person or Authority with
respect to the Intellectual Property Rights; and (vii) the Companies do not have
any obligation to compensate any Person or Authority for the development, use,
sale or exploitation of any Intellectual Property Right.

(b) The Companies have taken reasonable security measures
to protect the secrecy, confidentiality and value of the information that
relates to the business of the Companies and that are proprietary and
confidential ("Proprietary Information"); any of the Companies' employees and
any other persons who, either alone or in concert with others, developed,
invented, discovered,

<PAGE> 27

derived, programmed or designed such Proprietary Information, or who have
knowledge of or access to information relating to it, have been put on
reasonable notice, and have entered into agreements that such Proprietary
Information is proprietary to the Companies, as the case may be, and is not to
be divulged or misused. None of the Proprietary Information has been used,
divulged or appropriated for the benefit of any past or present employees or any
Person other than the Companies, or to detriment of the Companies. The Companies
have not used any trade secret owned by any other Person or received any notice
or been served in any lawsuit alleging that it is infringing the trade secrets
of any other Person.

(c) No employee of the Companies is in default under any term of
any employment contract, agreement or arrangement relating to any Intellectual
Property Right or non-competition contract relating to any Intellectual Property
Right or its development or exploitation.

3.10 Litigation. Except as set forth in Schedule 3.10, (i) there is no
action, suit, arbitration or legal, administrative, arbitration or other
proceeding or investigation (governmental or non-governmental) pending or, to
the knowledge of Seller after due inquiry, threatened against the Companies or
their respective assets, properties or business nor is Seller aware of any acts,
errors or omissions that in the normal course of events could lead to any of the
same; (ii) the Companies are not a party to or subject to the provisions of any
judgment, order, injunction, decree or award of any Person or Authority against
or affecting the Companies; (iii) the Companies are not presently engaged in any
legal action to recover moneys due to it or damages sustained by it; and (iv)
there is no action, suit, proceeding or investigation pending or, to the
knowledge of Seller after due inquiry, threatened which would give any third
party the right to enjoin or rescind or cause an alteration in the transactions
contemplated hereby.

3.11 Compliance with Laws; Permits

(a) The Companies have complied with and are in compliance in all
respects with all applicable laws, regulations, ordinances, rules, orders,
judgments decrees and awards of any Person or Authority in connection with the
assets, properties and business of the Companies, except for any non-compliance,
individually or in the aggregate, which has not and will not have an Adverse
Effect on the Companies, the rights of Buyer under this Agreement or the
consummation of the transactions contemplated hereby. The Companies have not
received any notice of any failure to comply with, nor are there any
circumstances which indicate that the Companies are in violation of any such
laws, regulations, ordinances, orders, judgments or decrees.

<PAGE> 28

(b) Each transaction of the Companies has been properly and
accurately recorded on the books and records of the Companies, and each document
(including any contract, invoice or receipt) on which entries in the Companies'
books and records are based is complete and accurate in all material respects.
The Companies maintain a system of internal accounting controls adequate to
insure that each maintains no off-the-books accounts and the assets of the
Companies are used only in accordance with the directives of the Companies'
management.

(c) The Companies (since their incorporation) have to their best
knowledge at all times during the previous five-year period complied with the
export control laws of the United States with respect to products, services and
technology obtained from the United States, and with those of any other
jurisdictions, to the extent such U.S. and other laws were or are applicable.
Except as set forth in Schedule 3.11(c) no product sold or service performed by
the Companies in the previous five-year period has been sold or performed,
directly or indirectly, to or for the benefit of, nor has Seller had any
business dealings whatsoever with, any Person of or in Cuba, Iran, Iraq, Libya,
Serbia, Montenegro or Serbian controlled portions of Croatia or Bosnia, or any
Person owned or controlled by any of the foregoing (including, without
limitation, "specially designated nationals").

(d) Except as set forth on Schedule 3.11(d), during the previous
five-year period, no product has been sold or service performed by the Companies
to or for the benefit of customers in Bahrain, Kuwait, Lebanon, Oman, Sudan,
Syria or Yemen.

(e) Set forth on Schedule 3.11(e) are all of the concessions,
licenses, sublicenses, permits, applications, filings, registrations, rights,
easements, permissions, authorizations and consents required by applicable law
or otherwise necessary in order for the Companies to operate in each
jurisdiction in which each conducts business ("Permits"). Except as set forth in
Schedule 3.11(e), such Permits have been duly obtained, are legally valid and in
full force and effect; and to the knowledge of Seller, there are no
circumstances which indicate that any of such Permits are likely to be subject
to legal challenge, revoked or not renewed. The Companies are not in default nor
have they received notice of any claim of default with respect to any Permit,
nor is there pending before any Authority any dispute or other proceeding
regarding the validity, nature, scope or interpretation of any Permit. None of
such Permits or the rights of the Companies thereunder will be Adversely
affected by the consummation of the transactions contemplated hereby. All such
Permits are renewable by their terms or in the ordinary course of business
without the need to comply with any special qualification procedures or to pay
any amounts other than routine filing fees. None of such Permits

<PAGE> 29

will be Adversely affected by consummation of the transactions contemplated
hereby. No employee or former employee of the Companies or any other Person,
owns or has any proprietary, financial or other interest (direct or indirect) in
any Permit that the Companies own, possess or use in the operation of their
business.

3.12 Tax Matters. Except as set forth in Schedule 3.12:

(a) All Tax Returns (as hereinafter defined) required to be
filed by the Companies (the "Taxpayers") have been filed on a timely basis and
are in all material respects true, complete and correct;

(b) All Taxes (as hereinafter defined) that are due and payable
or claimed or asserted to be due and payable by the Taxpayers by any Authority
for all periods up to and including the Initial and Second Closing Date have
been paid or fully provided for, except for Taxes on income which are the
subject of customary challenges by the relevant Authorities.

(d) The Taxpayers have complied in all respects with all
applicable laws, rules and regulations relating to the payment and withholding
of Taxes pursuant to all applicable provisions concerning withholding of Taxes
or similar provisions and have, within the time and in the manner prescribed by
law, paid over to the proper Authorities all amounts required to be withheld and
paid over under all applicable laws;

(e) No audits or other administrative proceedings or court
proceedings are now pending or to the knowledge of the Taxpayers threatened with
regard to any Taxes or Tax Returns of the Taxpayers;

(f) None of the transactions contemplated by or completed with
respect to this Agreement has or will cause the Taxpayers to incur any
additional Liability for Taxes as a result thereof;

(g) The Companies have not incurred any Liabilities for Taxes for
the period beginning January 1, 1996 and ending on the Initial Closing Date or
the Second Closing Date (as the case may be) other than Liabilities for Taxes
incurred in the ordinary course of their business which have been paid or
properly accrued;

(h) For purposes of this Agreement, (i) "Taxes" means all taxes,
charges, fees, levies or other assessments,

<PAGE> 30

including, without limitation, income tax, business tax, property tax,
technology transfer tax, value added tax, all other net income, sales, use,
registration, ad valorem, excise, transfer, social security license,
withholding, payroll, employment, social security, unemployment and retirement
contributions, estimated, property or other taxes, customs duties, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts imposed by any Authority
of any jurisdiction upon the Taxpayers, and (ii) "Tax Returns" means all
returns, declarations, reports, information returns and statements required to
be filed by the Taxpayers in connection with Taxes.

3.13 Shareholder Agreements. Except for this Agreement and except as
set forth in Schedule 3.13, there are no Contracts, whether written or oral
(including any amendments thereto), among or between the shareholders of the
Vietnam JV or the Companies, or between the Vietnam JV or the Companies and a
shareholder of the Vietnam JV or the Companies, or between the Vietnam JV or the
Companies and the holders of any security of the Vietnam JV or the Companies,
with respect to the equity interest or investment in the equity capital of the
Vietnam JV or the Shares of the Companies.

3.14 Consents. Except as set forth in Schedule 3.14, no consent,
approval or authorization of, or exemption by, or filing or registration with,
any Authority or any other Person is required in connection with the execution,
delivery and performance by the Seller of the transactions contemplated by this
Agreement.

3.15 Environmental Matters. Except as set forth in Schedule 3.15, (a)
the operations of the Companies comply in all material respects with all
applicable Singapore environmental and health and safety statutes and
regulations ("Environmental Law"); (b) the Companies do not, nor to Seller's
knowledge after due inquiry, any prior owner or tenant of the Real Property has
made, caused or contributed to any release of any hazardous or toxic waste,
substance or constituent, into the environment; (c) none of the operations of
the Companies is subject to any pending or threatened judicial or administrative
proceeding alleging the violation of any Environmental Law; (d) none of the
operations of the Companies is subject to any compliance agreement or settlement
agreement resulting from an alleged violation of any Environmental Law; (e) none
of the operations of the Companies is the subject of any Singapore investigation
or threatened investigation regarding a violation or alleged violation of any
Environmental Law; (f) none of the operations of the Companies is required to
file a notice or report pursuant to any Environmental Law of any past or present
spill or release of hazardous or toxic substance or constituent into the
environment; (g) none of the operations of the Companies involves the
generation, treatment or disposal of hazardous or

<PAGE> 31

toxic waste; (h) to Seller's knowledge after due inquiry, there are no hazardous
wastes or toxic substances in or on the Real Property; and (i) the Companies
possess all environmental Permits required by any Environmental Law to operate
their business as presently conducted.

3.16 Absence of Certain Chances or Events. Except as set forth in
Schedule 3.16 or otherwise contemplated by this Agreement, since December 31,
1996, there has not been (i) any Adverse Change in the Companies; (ii) any
significant damage, destruction or loss of any assets affecting the Companies
whether or not covered by insurance; (iii) any increase out of the ordinary
course of business in the compensation payable or to become payable by the
Companies to the officers, managers or key employees working for the Companies;
(iv) any increase out of the ordinary course of business in any bonus,
insurance, pension or other employee benefit plan, payment or arrangement made
to, for or with any such officers, managers or key employees; or (v) any entry
into any Material Contract by Seller affecting the Companies or by the
Companies; (vi) any change by the Companies in accounting methods, principles or
practices except as required by Singapore GAAP; (vii) any revaluation by the
Companies of any of their assets; (viii) any direct or indirect redemption,
purchase, or other acquisition by the Companies of any of their equity interest
or investment in equity capital; or (ix) any increase in the capital stock of,
or change to the par value of the equity interest or investment in equity
capital of the Companies.

3.17 Material Contracts (Including Related Party Contracts).

(a) Schedule 3.17(a) contains the full-text execution copies of
any and all lease or tenancy agreements for the Real Property leased by the
Companies and which are used in whole or in part by the Companies (the
"Tenancy"). The Companies enjoy undisturbed possession under the Tenancy.

(b) Schedule 3.17(b) contains a description of each agreement,
arrangement, commitment, contract, hire-purchase, license, understanding or
other Contract (including, without limitation, with any Authority or
government-owned enterprise), whether written or oral (including any amendments
thereto), to which Seller or the Companies are a party or by which their
properties or assets may be bound (other than the Tenancy), and which is
material to the conduct of the business of the Companies (a "Material
Contract"); and where such Material Contract is oral or is evidenced only by
form purchase orders, Schedule 3.17(b) sets forth an accurate description of the
essential terms of such Material Contract. For purposes of this Section 3.17(b),
a Material Contract shall mean (i) any Contract involving payments or

<PAGE> 32

obligations to or from Seller relating to the Companies or to or from the
Companies in excess of S$100,000.00 (One Hundred Thousand Singapore Dollars) in
one or a series of transactions; (ii) any Contract the termination of which
would have an Adverse Effect on the Companies, the rights of Buyer under this
Agreement or the consummation of the transactions contemplated hereby; (iii) any
exclusivity agreement or undertaking not to compete; (iv) any current Contract
which is between or among Seller or the Companies, on the one hand and any one
or more Affiliates of Seller or the Companies or any director or management
personnel of the Companies, on the other hand; (v) any Material Contract not
entered into in the ordinary course of business; (vi) any joint venture,
consortium, teaming or similar Contract; (vii) any agency, consulting,
representative, distribution or similar Contract, including any such Contract
for registration, qualification or representation in a country other than
Singapore; or (viii) any other Contract which is material to the business,
assets, operations, prospects or financial condition of the Companies. Schedule
3.17(b) also contains as an attachment each of the forms of customer agreements
utilized in connection with the business of the Companies.

(c) Each Material Contract and the Tenancy is valid and
enforceable in accordance with its terms. Except as disclosed in Schedule
3.17(c), there is no breach, default or event that with notice or lapse of time,
or both, would constitute a breach or default by any party to any of these
Material Contracts or the Tenancy. Neither Seller nor the Companies have
received notice (i) that there exists an event or condition with respect to any
Material Contract or the Tenancy that has not since been cured or waived and
that, with or without the passage of time or the giving of notice, or both,
would constitute a default under such Material Contract or the Tenancy, or (ii)
that any party to any of these Material Contracts or the Tenancy intends to
cancel or terminate any of these Material Contracts or the Tenancy or to
exercise or not exercise any options under any of these Material Contracts or
the Tenancy. No such Material Contract or the Tenancy contains any contractual
requirement with which there is a substantial likelihood Seller, the Companies
or any other party thereto will be unable to comply.

(d) With regard to each Contract, bid, offer, quotation, or
report of any kind with or to any Authority or government-owned enterprise with
respect to the Companies, each of Seller and the Companies:

(i) has complied with all governmental procurement and other
regulations;

<PAGE> 33

(ii) has not violated any statutes or regulations relative
to prohibited practices;

(iii) has made no representations or certifications that are
untrue; which non-compliance, violation or inaccuracy has or could result in an
Adverse Effect on the Companies or result in any criminal liability of any
Person, and

(iv) is unaware of any current or prospective audit by any
Authority or any such enterprise concerning any of the above, concerning
pricing, or relative to debarment, other than regular audits in the ordinary
course of governmental contracts; and

(v) is unaware of any prospective disallowance of costs,
fees or money claims with respect to any Contract with any Authority or any such
enterprise.

3.18 Employee Benefits; Employment Contracts and Directors
Remuneration.

(a) Schedule 3.18(a) contains a true and complete list or
description of all Employee Benefit Plans pertaining to any director, officer,
agent, employee or former employee of the Companies. The Companies have
delivered to Buyer correct and complete copies of all plan documents and summary
plan descriptions, all related trust agreements, insurance contracts and other
funding agreements which implement the Employee Benefit Plan, and where a plan
document for an Employee Benefit Plan does not exist, a detailed description of
such Employee Benefit Plan. Except as disclosed in Schedule 3.18(a), no Employee
Benefit Plan provides medical, health, life insurance, or other welfare-type
benefits for current or future retired or terminated officers, directors and
employees of the Companies, their spouses or their dependents. "Employee Benefit
Plans" means any agreement, plan, program, fund, policy, contract or arrangement
(either written or unwritten) providing any bonus, incentive, compensation,
profit sharing, retirement, pension, insurance, disability, death benefit,
medical, dental or vision insurance or expense reimbursement, sick pay,
dependent care, stock bonus, stock option, stock purchase, stock appreciation
rights, phantom stock, stock equivalent bonus, thirteenth month, savings,
thrift, deferred compensation, consulting, severance pay or termination pay,
vacation pay, day-care, legal services, supplemental or excess benefit, housing
assistance, moving expense reimbursement, educational assistance, welfare or
other employee benefits or fringe benefits, covering any officer, director or
employee of the Companies, and the beneficiaries and dependents of any such
officer, director or

<PAGE> 34

employee, regardless of whether it is mandated under local law (e.g., Provident
Fund), private, funded, unfunded, financed by the purchase of insurance,
contributory or non-contributory.

(b) The Companies are not a party to any collective bargaining or
union agreement, and within the last five (5) years, nor have the Companies
experienced any significant union organization attempts or any material work
stoppage due to any labor disagreement. There is no individual or collective
labor complaint against the Companies pending or, to Seller's best knowledge
after due inquiry, threatened, before any Singapore labor board or tribunal.
There is no labor strike, request for representation, slowdown or stoppage
actually pending or, to Seller's best knowledge after due inquiry, threatened
against or affecting the Companies. No grievance or other claim has been
asserted pursuant to any collective bargaining or other labor union agreement,
the settlement of which would have an Adverse Effect on the Companies. No
arbitration proceedings arising out of or under any collective bargaining or
other labor union agreement is pending or, to Seller's best knowledge after due
inquiry, threatened against the Companies.

(c) There are no other employment or personal service
agreements, or any "golden parachute", "pay-to-stay", loans or indemnity
agreements, between Seller or the Companies, on the one hand, and any officer,
director or manager of the Companies (including, without limitation, the Vietnam
JV) on the other hand.

(d) Except as set forth in Schedule 3.18(d) no third party
provides personnel, manpower or personnel services to the Companies.

3.19 Real Property.

(a) Except as set forth in Schedule 3.19(a), the Companies
neither own, use, hold for use, nor occupy any land or easements nor any
buildings, structures or other improvements, nor do they have any rights or
appurtenances in or to any real property, nor any real property leasehold
interests, nor any other real property interests of any kind whatsoever,
(hereinafter, the "Real Property");

(b) The Companies have all easements and rights of way necessary
to operate their business as currently conducted.

(d) No development has been carried out in relation to the Real
Property which would require any consent under or by

<PAGE> 35

virtue of the Planning Acts or any by-laws or building regulations or other
relevant legislation without such consent having been properly obtained and any
conditions or restrictions imposed thereon have been fully observed and
performed, no application by the Companies for planning consent has been refused
and no application by the Companies for planning consent has been submitted or a
decision in relation thereto appealed against where the decision in relation
thereto or the outcome of the appeal (as appropriate) is still pending.

(e) All policies of insurance relating to the Real Property
(including fixtures, fittings and contents) effected by the Companies are
current and valid, cover the full reinstatement value thereof (including where
the relevant property is let, loss of rent cover conforming with the
requirements of the relevant lease) and are not subject to any special or
unusual terms or restrictions or to the payment of any premium in excess of the
normal rate for policies of the same kind and, in respect of policies on Real
Property held on lease where the Companies are responsible for maintaining
insurance, the policy conforms in all respects with the requirements of the
lease under which any of the Real Property is held.

(f) There are no policies of insurance relating to any of the
Real Property (including fixtures fittings and contents) which have not been
effected by the Companies.

(g) No structural or other material defects have appeared in
respect of or affecting the buildings and structures on or comprising the Real
Property or any parts thereof and all such buildings are in good and substantial
repair and condition.

(h) The companies are not engaged in any negotiation for review
of the rent payable under any lease or tenancy agreement under which they hold
any of the Real Property and no negotiations for such review have been concluded
changing the rent from that disclosed to Buyer in writing.

(i) The Companies are not the guarantor of or surety for any
other party's liability (contingent or otherwise) for any obligations under any
lease or tenancy or under any agreement relating to the assignment of any lease
or tenancy.

3.20 Insurance.

(a) The Companies' policies of liability, fire, automobile,
property, general civil liability and other forms of insurance, all of which are
valid and enforceable and in full force and effect, are underwritten by
unaffiliated financially sound and reputable insurers, are sufficient for all
applicable requirements

<PAGE> 36

of law and provide insurance coverage against, including, without limitation,
all errors and omissions and general liability, officers and directors
liability, and products liability insurance, in such amounts and against such
risks as is customary in Singapore for companies engaged in similar businesses
to those of the Companies to protect the properties, assets, businesses and
operations of the Companies. Schedule 3.20(a) sets forth a true and correct
summary description of all of the policies in force and effect including a
description of their respective coverage and limits. All such policies will
remain in full force and effect through their respective dates and will not in
any way be affected by or terminate or lapse by reason of any of the
transactions contemplated hereby. No notice of cancellation has been received,
and there is no existing default or event that, with the giving of notice or
lapse of time or both, would constitute a default under such policies. The
Companies have not been refused any insurance, nor have their coverage been
limited, by any insurance carrier to which they have applied for insurance or
with which they have carried insurance, at any time during the past five (5)
years.

(b) Schedule 3.20(b) sets forth a true and complete summary
description of all outstanding bank or other guarantees, bonds, letters of
credit and other surety arrangements issued or entered into in connection with
the business, assets and Liabilities of the Companies, including any guarantees
issued by the Companies or any shareholder of the Companies in respect of any
contractual or other obligation or Liability of the Companies.

3.21 No Conflicts of Interest. No Affiliate, director, senior
management personnel (including any elected or appointed officer) or salaried
employee of the Companies, or any Person in which the Companies or any Affiliate
thereof have a beneficial interest, has any direct, indirect or beneficial
interest in any competitor, supplier or customer of the Companies or in any
Person from whom or to whom the Companies lease any real or personal property,
or in any other Person with whom the Companies are doing business.

3.22 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's fee or commission in connection with the transactions
contemplated by this Agreement based on arrangements made by or on behalf of
Seller. Seller will indemnify and hold Buyer harmless from any such payment
alleged to be due by or through Seller as a result of the action of Seller or
his agents.

3.23 Disclosure.

(a) The representations and warranties in this Agreement
are given subject to matters fully fairly and

<PAGE> 37

specifically disclosed in the Schedules hereto and where applicable any exchange
of correspondence between the parties or their respective attorneys.

(b) Each of the representations and warranties shall be separate
and independent.

(c) The representations and warranties given by Seller herein
are made to the best of the knowledge, information and belief of Seller, and
have been made after due and careful inquiry.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as follows:

4.1 Corporate Power and Authority; Effect of Agreement.

(a) Buyer is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, United States of
America. Buyer has all requisite corporate power and authority to execute,
deliver and perform this Agreement to which it is a party and to consummate the
transactions contemplated hereby.

(b) The execution, delivery and performance by Buyer of this
Agreement and the consummation by Buyer of the transactions contemplated hereby
have been duly authorized by the Board of Directors and shareholders of Buyer,
and no other corporate action or proceeding on the part of Buyer is necessary to
authorize this Agreement or the consummation of any of the transactions
contemplated hereby.

(c) This Agreement has been duly and validly executed and
delivered by Buyer and constitutes the valid and binding obligation of Buyer,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and the availability of specific performance.

(d) The execution, delivery and performance by Buyer of this
Agreement and the consummation by Buyer of the transactions contemplated hereby
do not and will not, with or without the giving of notice or the lapse of time,
or both, (i) violate any law, rule or regulation to which it or any of its
assets or properties is subject, (ii) violate any order, writ,

<PAGE> 38

injunction, judgment or decree applicable to it or any of its assets or
properties, or (iii) conflict with, or result in a breach of or default under,
or give rise to any right of termination, cancellation or acceleration under (A)
any term or condition of its Articles of Incorporation and Bylaws, or (B) any of
the terms, conditions or provisions of any note, bond, mortgage, indenture or
lease, license, agreement or other instrument to which it is a party or by which
its assets or properties may be bound; except, with respect to clauses (i), (ii)
and (iii)(B) above, for violations, conflicts, breaches or defaults which in the
aggregate would not hinder or impair its ability to consummate the transactions
contemplated hereby.

4.2 Consents. No consent, approval or authorization of, or exemption
by, or filing or registration with, any Authority is required in connection with
the execution, delivery and performance by Buyer of the transactions
contemplated by this Agreement.

4.3 Absence of Litigation. No claim, action, proceeding or
investigation is pending or, to the knowledge of Buyer, threatened against Buyer
before any Authority or other Person that would be reasonably likely to
materially and Adversely affect or restrict Buyer's ability to consummate the
transactions contemplated hereby.

4.4 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's fee or commission in connection with the transactions
contemplated by this Agreement based on arrangements made by or on behalf of
Buyer. Buyer will indemnify and hold Seller harmless from any such payment
alleged to be due by or through Buyer as a result of the action of Buyer or its
officers or agents.

ARTICLE 5

UNDERTAKINGS OF THE PARTIES

5.1 Tax Relief and Grants. Seller undertakes to cause the Companies to
request and use their best efforts to pursue such tax relief and government
grants as may be available, as soon as reasonably possible after the Initial
Closing Date.

5.2 Cooperation. Each of the parties hereto shall use its best efforts
to satisfy all applicable conditions to the Initial and Second Closing and the
respective Contingent Payment (as the case may be) and to cause the consummation
of the transactions contemplated by this Agreement in accordance with the terms
and conditions hereof and applicable law. Each of the parties hereto shall use
its best efforts to obtain any

<PAGE> 39

governmental consents and approvals necessary to consummate the transactions
contemplated by this Agreement and to cause the Initial and Second closing and
the respective Contingent Payment (as the case may be) to occur. Each of Buyer
and Seller shall use, and Seller shall cause the Companies to use, its best
efforts to obtain the consent or approval of Authorities and third Persons to
the transactions contemplated hereby. In the event any consent or approval of
any such Authority or third Person which is necessary or desirable to preserve
for the Companies any right or benefit under the Tenancy, Material Contract or
Permit, which is not obtained prior to the Initial Closing (and provided that
Buyer waives any resulting failure of a condition under Article 6), Seller will,
subsequent to the Initial Closing, cooperate with Buyer and the Companies in
attempting to obtain such consent or approval as promptly thereafter as
practicable.

5.3 Conduct of Business Between Signing and Initial Closing.

(a) From the date hereof until the Initial Closing, Seller
shall use his best efforts to cause the Companies to preserve their business
organization intact, keep available to them their respective present management
and employees and preserve their present relationship with and the goodwill of
their customers, suppliers and others having business relationships with them,
and conduct their business and activities diligently. Prior to the Initial
Closing, without the prior written consent of Buyer (which consent shall not be
unreasonably withheld or delayed) or unless otherwise contemplated or permitted
by this Agreement, Seller shall use his best efforts to cause the Companies to
refrain from the following actions (including any agreement to take any of the
following actions):

(i) enter into any amalgamation, reconstruction or
reorganization with any Person or Authority, acquire any ownership interest in
any Person or Authority or substantially all of the assets of any business as an
entity or liquidate, dissolve or otherwise reorganize or seek protection from
creditors;

(ii) enter into or modify any other Material Contracts;

(iii) make any investment of a capital nature by purchase of
shares or securities, contributions to capital, property transfers or otherwise,
or by the purchase of any property or assets of any other Person or Authority;

(iv) enter into a new line of business or make or institute
any unusual or novel methods of operation, purchase,

<PAGE> 40

sale, lease, management or accounting that would vary from those methods
currently used by it;

(v) issue, sell or deliver, or agree to issue, sell or
deliver any equity interest or investment in equity capital or issue or create
any Contract or other commitment under which any additional shares might be
authorized, issued or transferred;

(vi) sell, transfer, mortgage, charge, pledge or create or
permit the creation of an Encumbrance on or in respect of any of the Companies'
assets, properties or rights, tangible or intangible;

(vii) amend their memorandum and articles of association or
grant any general powers of attorney, or any special powers of attorney except
in the ordinary course of business or in order to carry out the transactions
contemplated by this Agreement;

(viii) grant any change in any benefits or any increase out
of the ordinary course of business in compensation to any employee, consultant,
agent, representative, distributor or director of the Companies;

(ix) declare or pay any dividend or make any distribution to
shareholders in cash, equity interest or investment in equity capital or
property; or

(x) redeem, repurchase or otherwise acquire any equity
interest or investment in equity capital.

(b) Should the Companies desire to take, carry out or implement
any of the actions listed in Section 5.3(a), paragraphs (i) through (x), Seller
shall request permission to do so from Buyer in writing and Buyer will respond
promptly to such request.

5.4 No Shop. Save as provided in this Agreement, Seller undertakes
that until the later of: (i) ninety (90) Days from the date hereof and (ii) the
Termination Date, it shall not, and shall cause its Affiliates and the
respective agents, representatives, officers, directors and employees of the
foregoing Persons not to:

(a) solicit or enter into any discussions, negotiations or
similar activities relating to the sale or other disposition of the Companies or
any of their assets, equity interest or investment in equity capital or other
securities, including, without limitation, any offering or sale of equity
interest or investment in equity capital, options, warrants or other equity or
convertible securities in whole or in part, whether directly or indirectly,
through purchase, amalgamation.

<PAGE> 41

reconstruction, reorganization or otherwise (other than sales of inventory in
the ordinary course); or

(b) without the prior written consent of Buyer, sell, purchase,
convey, acquire, pledge or otherwise encumber or transfer any equity interest or
investment in equity capital or other securities of the Companies, or request
any other Person or Authority to act in any such transaction.

5.5 Access to Information.

(a) Throughout the term of this Agreement, Buyer and its
authorized representatives shall be permitted, upon reasonable prior notice, to
make such full and complete investigations of Seller's ownership of the equity
interest or investment in equity capital, of Seller's authority to enter into
and comply with this Agreement, and of the Companies and their business
activities, and their historical business activities, as Buyer from time to time
deems reasonably necessary. For such purposes, (i) Buyer and its authorized
representatives shall have access during normal business hours to all accounts,
books, records, Contracts, facilities and properties of the Companies and to
those employees and financial, legal and other representatives of the Companies
having knowledge of financial, operating and legal data and other information
with respect to the business and properties of the Companies as Buyer may from
time to time reasonably request, and (ii) Buyer and its authorized
representatives shall be permitted to conduct financial, environmental and legal
audits of the Companies; provided, however, that Buyer shall use its reasonable
best efforts to conduct such investigations in such a manner as not to disrupt
the operations of the Companies.

(b) From and after the date of this Agreement, Buyer and its
authorized representatives (on the one hand), and Seller and the Companies, and
their authorized representatives (on the other hand), shall treat all
information concerning Seller and the Companies (the "Confidential Information")
as strictly confidential; provided, however, that disclosure of such information
may be made by either Buyer or Seller (i) with the prior written consent of the
other party or (ii) if, in the opinion of counsel for the party desiring to make
such disclosure, such disclosure is required by law. Confidential Information
shall not include information which (i) is already in the possession of Buyer
and which was not disclosed to Buyer by Seller or the Companies, provided that
such information is not known to be subject to another confidentiality agreement
with, or other obligation of secrecy to, Seller or the Companies, (ii) is or
becomes generally available to the public other than as a result of a disclosure
by a party hereto in violation of this Section 5.5(b), or (iii)

<PAGE> 42

becomes available to either Buyer (on the one hand) or Seller or the Companies
(on the other hand) on a non-confidential basis from a source other than Seller
or the Companies (on the one hand) or Buyer (on the other hand) or their
respective directors, officers, employees, agents, representatives or advisors,
provided that such source is not known by the disclosing party to be bound by a
confidentiality agreement with, or other obligation of secrecy to any of the
aforementioned Persons.

5.6 Further Assurances. Subject to the terms and conditions of this
Agreement, each of the parties hereto (a) will take, or cause to be taken, all
actions, and do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement and to ensure that Buyer's and
Seller's rights under this Agreement continue unimpeded, and (b) will take, or
cause to be taken, no action inconsistent with the terms of this Agreement or
inconsistent with Buyer's and Seller's rights hereunder. In case at any time
after the Initial Closing Date any further action is necessary or desirable to
carry out the purposes of this Agreement, (a) Buyer will cause its proper
officers and directors to take all such actions, and (b) Seller will take or
cause the proper officers and directors of the Companies to take all such
actions.

5.7 Amendments to Schedules. No later than ten (10) Days prior to the
Initial Closing Date, Seller shall notify Buyer of (i) any representation
contained in Article 3 which has become untrue or incorrect in any respect, (ii)
the relevant facts and circumstances, and (iii) the amendments to the Schedules
hereto which Seller believes in good faith would be necessary to make the
representations contained in Article 3 true and correct in all respects in light
of such facts and circumstances. No later than five (5) Days prior to the
Initial Closing Date, Seller shall deliver to Buyer any updates to Schedules
attached hereto (the "Schedule Updates"). Notwithstanding the foregoing time
periods, Seller must advise Buyer as soon as possible at any time prior to the
Initial Closing Date, of any new facts or circumstances which may require the
amendment of any representation contained in Article 3 or to any of the
Schedules attached hereto. Following consultation between Buyer, Seller and the
Companies, Buyer will advise Seller whether it accepts the Schedule Updates or
any new facts and circumstances arising and disclosed in writing after the
delivery of the Schedule Updates, in whole or in part, or if such Schedule
Updates or new facts or circumstances arise for reasons within the sole control
of Seller and the Companies and in the aggregate reduce the profits, turnover or
net asset value of any of the Companies by 20 or more, whether it intends to
terminate this Agreement pursuant to Section 9.1 and exercise its rights to
indemnification under Section 8.1. To the extent accepted in

<PAGE> 43

writing by Buyer, such Schedule Updates are referred to herein as an
"Amendment."

5.8 Non-Competition/Non-Solicitation.

(a) From the date hereof until the fifth (5th) anniversary
of the Second Closing Date (or, in the case of Buyer, until Buyer no longer is a
shareholder of Asia and Trading, if later), Buyer, Seller and its Affiliates
shall not:

(i) participate or have any Interest in any Person that
Competes in any manner anywhere in the world with the Business of the Companies;

(ii) solicit or entice away or attempt to solicit or entice
away from the Companies in the conduct of the Business any Person who is or has
at any time within twelve months prior to the date in question been a customer
or agent of the Companies; or

(iii) solicit or entice away or attempt to solicit or entice
away from the Companies any employee of the Companies whether or not such person
would commit a breach of contract by reason of leaving such employment.

(b) The following terms shall have the meanings ascribed for the
purposes of this Section 5.8:

(i) "Business" of the Companies means the wholesale and
retail of chemicals and chemical-related products;

(ii) "Compete" and "Competing Business" mean any business
engaged in activities which are the same or similar to the activities comprising
the Business, whether with the same or similar products, or different products
which provide the same or similar functionality as the products of the Business,
including products which may be substituted for the products of the Business;
and

(iii) "Interest" includes any of the following, whether
existing directly or indirectly, legally or beneficially: (A) ownership of any
equity, partnership or other ownership interest or entitlement in any entity,
(B) any right to vote with respect to decisions of the board, management,
supervisory or similar committee or body of any entity, (C) any right to vote,
or direct the voting of, any equity, partnership or other ownership interest or
entitlement in any entity, (D) any right to receive, or direct the recipient, of
any dividends or other distributions from any entity, or (E) any management
rights with respect to any entity.

<PAGE> 44

(c) Each obligation under this clause shall be treated as a
separate obligation and shall be severally enforceable, and in the event of any
obligation being or becoming unenforceable in whole or in part, such part as is
unenforceable shall be deleted from this clause, and any such deletion shall not
affect the enforceability of such parts of this clause as remain

5.9 Amended Articles. The parties agree that effective as of the
Initial Closing Date, the Amended Articles shall be adopted, which shall include
the provisions contained in Sections 5.10, 5.11 and 5.13.

5.10 Management of the Companies.

(a) The parties agree to modify the Amended Articles to give
effect to the provisions of this Section 5.10.

(b) So long as Buyer holds not less than twenty-five percent
(25%) of the Asia Shares, Buyer shall be entitled to appoint and from time to
time to replace one Director of Asia, and so long as Buyer holds not less than
twelve and 745/1000 percent (12.745%) of the Trading Shares, Buyer shall be
entitled to appoint and from time to time to replace one Director of Trading.

(c) Each appointment and removal of its Director by Buyer shall
be effected by notice sent to the relevant one of the Companies.

(d) Buyer shall be responsible for and shall hold Seller,
its Affiliates and the Companies harmless from and against any claim for damages
asserted against Seller, its Affiliates or the Companies by its Director or
losses incurred by Seller, its Affiliates or the Companies resulting from any
and all acts or omissions of its Director other than acts or omissions agreed to
by the Board of Directors.

(e) Each Director may, in accordance with any subject to the
Amended Articles, appoint an alternate to represent him at meetings of the Board
which he is unable to attend.

(f) Members of the Board may participate in and act at any
meeting of the Board through the use of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in such a meeting shall constitute
attendance and presence in person at the meeting of the person or persons so
participating for all purposes.

(g) Meetings of the Board shall (unless the parties otherwise
agree in writing) take place at such time or times as may

<PAGE> 45

be determined by the Board but in any event not less frequently than twice per
year and on not less than fourteen (14) Days' prior written notice (unless
otherwise agreed by all of the Directors), which notice shall be accompanied by
an agenda.

5.11 Conduct of the Business of the Companies.

(a) The parties shall procure that the Companies shall not,
except with the sanction of a prior resolution of the Board of the Companies
(including the Director appointed by Buyer pursuant to Section 5.10) and where
required by the Singapore Companies Act (Cap. 50), the prior sanction of the
shareholders of the Companies:

(i) sell, transfer, lease, assign, dispose of or part with
control of any interest in all or any material part of their undertaking,
business, property or assets (whether by a single transaction or a series of
transactions), or contract to do so, or acquire or contract to acquire any
business, property or assets which would, following such acquisition, constitute
a material part of their business, property or assets (and for these purposes
any part accounting for ten percent or more of the profits, turnover or net
asset value of the Companies shall be deemed material);

(ii) make or agree to make any change to their authorized
or issued share capital or grant any option over, or issue any investment
carrying rights of conversion into, any of their share capital;

(iii) do or permit or suffer to be done any act or thing
whereby they may be wound up (whether voluntarily or compulsorily), save as
otherwise expressly provided for in this Agreement;

(iv) make any change to the Amended Articles; or

(v) dispose of any equity interest or investment in equity
capital of the Vietnam JV.

(b) Each party shall exercise all voting and other powers in
relation to the Companies so as to procure (so far as it is able by the exercise
of such rights and powers) that at all times during the life of this Agreement:

(i) Buyer shall be entitled within normal hours and upon
giving not less than seventy-two hours' notice to the Companies of its desire
so to do, to examine the

<PAGE> 46

books, accounts and records to be kept by or on behalf of the Companies and
shall be entitled to be supplied with all relevant information (including
monthly management accounts and operating statistics and such trading, financial
and other information in such form as it may reasonably require) to keep it
properly informed about the business and affairs of the Companies;

(ii) Without limiting the generality of Section 5.11(b)(i),
Buyer shall be entitled within the time and upon the notice referred to in
Section 5.11(b)(i), to procure that the examination and review referred to in
Section 5.11(b)(i) be conducted by any of its respective financial and legal
advisers.

(c) Each party shall procure that any Companies controlled by
the Companies shall observe and perform the provisions and conditions contained
in this Agreement relating to the Companies as if they applied directly to each
such Companies.

(d) All dealings between the Companies on the one hand and their
members or any of their respective Affiliates on the other hand shall be on
normal arm's-length terms as between unrelated parties.

5.12 Commercial Relationships with the Vietnam JV. Seller shall use
his best efforts to procure that the Companies shall discuss in good faith with
Buyer and its Affiliates the appropriate commercial relationships between the
Vietnam JV and Buyer and its Affiliates.

5.13 Auditing Accounting System. Information and Reports.

(a) Seller and Buyer shall cause the Companies to keep and
maintain complete and accurate books, records and accounts on an accrual basis
of accounting. Such records shall be maintained for a minimum period of six (6)
years from the date of making thereof, except for those records, if any,
required to be kept for a longer period under any Singapore legal requirement or
at the reasonable request of Buyer.

(b) Seller and Buyer shall cooperate with each other in
developing a uniform, comprehensive accounting and reporting system, in order
that, from and after the Initial Closing, the Companies will be able to prepare
financial statements in accordance with Singapore GAAP, and in such a manner as
reasonably permits the preparation by Buyer of financial statements in respect
of its interest in the Companies in accordance with U.S. GAAP (the expenses of
which shall be borne by Buyer), and provide management of the Companies with
prompt periodic financial information and other operating data desired by
management.

<PAGE> 47

including, without limitation, all data needed for tax, accounting, securities
laws and other financial reporting purposes in Singapore and the United States.
Seller and Buyer shall cause the Companies at regular intervals, in such form as
may be reasonably requested by either party, to supply such party information on
the business of the Companies including as regards their respective financial
positions.

(c) Seller shall cause the Companies to furnish to Buyer as soon
as such statements or information can reasonably be prepared (but in no event
later than the time period indicated, if any):

(i) a copy of audited annual financial statements within
ninety (90) Days following the end of the applicable Fiscal Year;

(ii) A copy of unaudited quarterly financial statements
within thirty (30) Days following the end of the applicable quarter; and

(iii) a copy of unaudited monthly statements within thirty
(30) Days following the end of the applicable month.

5.14 Transfers of Interests. During the life of this Agreement, none
of Seller's or Buyer's legal or beneficial rights in any equity interest or
equity investment in capital of the Companies shall be assigned, sold,
transferred, mortgaged, charged, pledged or otherwise disposed of or encumbered,
except as pursuant to this Agreement and the Amended Articles.

5.15 Agreements Between the Companies and the Parties.

Each party shall take all steps within its power to procure that
the Companies performs their obligations under and observes the provisions of
any agreements with the other parties or their Affiliates.

5.16 Constituent Documents. Insofar as permitted by applicable law,
Seller agrees that if and to the extent that any provision in the Amended
Articles conflicts with the provisions of this Agreement, this Agreement shall
prevail, and that, in the event of such conflict, they shall exercise all voting
rights and other powers available to them in relation to the Companies, and take
all such further steps as may be necessary or requisite, to ensure that the
provisions of this Agreement shall prevail.

<PAGE> 48

ARTICLE 6

CONDITIONS TO BUYER'S OBLIGATIONS

The obligation of Buyer to consummate the transactions contemplated by
Article 2 shall be subject to the satisfaction (or waiver) on or prior to the
Initial or Second Closing Date or each respective Contingent Payment (as the
case may be) of all of the following conditions, unless otherwise stated below:

6.1 Representations and Warranties of Seller. All representations and
warranties of Seller set forth in Article 3 shall be, except as otherwise
contemplated by this Agreement, true and correct in all material respects as of
the date of this Agreement and as of the Initial or Second Closing Date (as the
case may be) as though made on and as of the Initial or Second Closing Date (as
the case may be), as amended by any Amendments.

6.2 Performance of Undertakings. Seller shall have performed and
complied in all material respects with each and every undertaking, agreement and
condition required by this Agreement to be performed or complied with by Seller
prior to or on the Initial or Second Closing Date or prior to or on each
respective Contingent Payment (as the case may be).

6.3 No Prohibition. The consummation of the transactions contemplated
in this Agreement shall not be prohibited or delayed by any order, decree or
injunction of a court of competent jurisdiction and there shall not have been
any action taken or any failure to act or any statute, rule or regulation or
order of any court or other Authority enacted which (a) prohibits or delays
Buyer for a period greater than thirty (30) Days from consummating the
transactions contemplated by this Agreement or (b) imposes any limitation on the
ability of Buyer to exercise full rights of ownership of the Asia Shares and
Trading Shares and to exercise its full rights set forth herein.

6.4 No Action. No action, suit or proceeding before any Authority
shall be pending or threatened against Buyer by a third party challenging the
validity or legality of the transactions contemplated by this Agreement.

6.5 No Adverse Change. No occurrences, events, circumstances or
conditions which, individually or in the aggregate, constitute an Adverse Change
shall have occurred or arisen after December 31, 1996 (in the case of the
Initial Closing Date) or after the Initial Closing Date (in the case of the
Second Closing or a Contingent Payment), including any occurrences, events,
circumstances or conditions which, notwithstanding Seller's disclosure to Buyer
prior to the Initial or Second Closing Date or

<PAGE> 49

each respective Contingent Payment (as the case may be), have or with the
passage of time or the giving of notice would have an Adverse Effect on Buyer'S
rights under this Agreement or an Adverse Effect on the Companies.

6.6 Governmental Approvals and Consents. All approvals, authorizations
or consents of, or clearances or exemptions by, or filings or registrations
with, any Authority or stock exchange which are required for the consummation of
the transactions contemplated hereby to occur on the Initial or Second Closing
Date or each respective Contingent Payment (as the case may be) or to permit the
Companies, after consummation of the transactions contemplated hereby, to carry
on their business in the manner now conducted, shall have been obtained, made or
effected in all material respects; provided, that no such approval,
authorization, consent, clearance or exemption shall have imposed any Adverse
condition thereto.

6.7 Other Approvals and Consents. All consents or approvals of any
Persons or Authorities who are parties to Material Contracts to which the
Companies are also a party or to which any assets of the Companies are subject,
the granting of which is necessary for the consummation of any transaction
contemplated hereby or for preventing the termination of any material right,
privilege, license or agreement of the Companies, shall have been obtained and
copies thereof delivered to Buyer.

6.8 Construction of Vietnam JV Facility. The construction of the
Vietnam JV facilities set forth in the Vietnam Charter and Investment License
shall have commenced no later than September 30, 1997, and the Vietnam JV shall
have all necessary financial resources for such construction as well as
operation thereof as of the Second Closing Date or as of each respective
Contingent Payment (as the case may be). Construction of the Vietnam JV facility
shall be deemed to commence upon the execution of the respective land lease by
Tan Thuan Industrial Promotion Company (IPC), and the issuance of all required
approvals, if any.

ARTICLE 7

CONDITIONS TO SELLER'S OBLIGATIONS

The obligations of Seller to consummate the transactions contemplated
by Article 2 shall be subject to the satisfaction (or waiver) on or prior to the
Initial or Second Closing Date (as the case may be) of all of the following
conditions unless otherwise stated below.

<PAGE> 50

7.1 Representations and Warranties of Buyer. All representations and
warranties of Buyer set forth in Article 4 shall be, except as otherwise
contemplated by this Agreement, true and correct in all material respects as of
the date of this Agreement and as of the Initial or Second Closing Date (as the
case may be) as though made on and as of the Initial or Second Closing Date (as
the case may be), as amended by any Amendments.

7.2 Performance of Undertakings. Buyer shall have performed and
complied in all material respects with each and every undertaking, agreement and
condition required by this Agreement to be performed or complied with by Buyer
prior to the Initial or Second Closing Date (as the case may be).

7.3 No Prohibition. The consummation of the transactions contemplated
in this Agreement shall not be prohibited or delayed by any order, decree or
injunction of a court of competent jurisdiction and there shall not have been
any action taken or any failure to act or any statute, rule or regulation or
order of any court or other Authority enacted which (a) prohibits or delays
Seller for a period greater than thirty (30) Days from consummating the
transactions contemplated by this Agreement or (b) imposes any limitation on the
ability of Seller to exercise his full rights set forth herein.

7.4 No Action. No action, suit or proceeding before any Authority
shall be pending or threatened against Seller or the Companies challenging the
validity or legality of the transactions contemplated by this Agreement which,
if decided Adversely to Seller or the Companies, would have a material and
Adverse Effect on the Companies, the rights of Buyer under this Agreement or the
consummation of the transactions contemplated hereby.

7.5 Governmental Approvals and Consents. All approvals, authorizations
or consents of, or clearances or exemptions by, or filings or registrations
with, any Authority or stock exchange which are required for the consummation of
the transactions contemplated hereby to occur on the Initial or Second Closing
Date (as the case may be) or to permit the Companies, after consummation of the
transactions contemplated hereby, to carry on their business in the manner now
conducted, shall have been obtained, made or effected in all material respects;
provided, that no such approval, authorization, consent, clearance or exemption
shall have imposed any material and Adverse condition thereto.

<PAGE> 51

ARTICLE 8

INDEMNIFICATION

8.1 Seller's Indemnification.

(a) Subject to the terms and conditions of this Article 8,
Seller shall indemnify, defend and hold Buyer harmless from and against any
damages, deficiencies, Liabilities, losses, lost profits, obligations, claims,
demands, judgments, settlements, costs and expenses of any nature whatsoever,
including reasonable attorneys' fees (individually a "Loss" or collectively
"Losses"), asserted against, resulting to, imposed upon or incurred by the
Buyer, at any time prior to the applicable Expiration Date (a' defined in
Section 11.1), by reason of or resulting from: (i) any inaccuracy of any
representation or warranty made by Seller; (ii) any breach or violation of any
undertaking or agreement of Seller contained in this Agreement; (iii) all
undisclosed Liabilities of any nature, existing at, resulting from, relating to
or arising out of the business operations or assets of the Companies prior to
the Initial Closing Date; and (iv) any actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable legal fees and expenses)
incident to any of the foregoing or to the enforcement of this Section 8.1
(items 8.1(a)(i), (ii), (iii) and (iv) collectively, the "Buyer Claims");

(b) Seller shall be solely liable for Buyer Claims, without
any right of contribution from the Companies, and the Companies shall have no
liability therefor whatsoever

8.2 Buyer's Indemnification. Subject to the terms and conditions of
this Article 8, Buyer shall indemnify, defend and hold Seller harmless from and
against any/Losses asserted against, / Loss resulting to, imposed upon or
incurred by Seller, at any time prior or to the applicable Expiration Date by
reason of or resulting from: (i) any inaccuracy of any representation or
warranty of Buyer contained in this Agreement, (ii) any breach or violation of
any undertaking or agreement of Buyer contained in this Agreements (iii) any
actions, suits, claims, proceeding, investigations, demands, assessments,
audits, fines, judgments, costs and other expenses (including, without
limitation, reasonable legal fees and expenses) incident to any of the foregoing
or the enforcement of this Section 8.2 (together with the Buyer Claims, the
"Claims").

8.3 Conditions of Indemnification. The obligations of Seller and
Buyer, as the case may be, under Sections 8.1 and 8.2 (herein referred to as the
"Indemnifying Party"), with respect to

<PAGE> 52

Claims made by third parties shall be subject to the following terms and
conditions:

(a) The Person to whom such Claim relates (the "Indemnified
Party") will give the Indemnifying Party prompt notice of such Claim, whether
threatened or pending, and the Indemnifying Party will assume the defence
thereof by representatives chosen by it. Any failure to give such notice will
not waive the rights of the Indemnified Party except to the extent that the
rights of the Indemnifying Party are actually prejudiced.

(b) Provided the Indemnifying Party assumes the defence as
provided in Section 8.3(a):

(i) The Indemnified Party shall not make any admission of
liability, agreement or compromise in respect of such Claim without prior
consultation with and the prior written consent of the Indemnifying Party (which
shall not be unreasonably withheld or delayed) to the extent that such admission
of liability, agreement or compromise would prevent the Indemnifying Party from
defending its interests. If no reply is received from the Indemnifying Party
within thirty (30) Days of a written notification made to it by the Indemnified
Party that it wishes to admit liability, agree or compromise, the Indemnifying
Party shall be deemed to have consented to the course of action taken. If on the
other hand within the period of thirty (30) Days the Indemnifying Party states
in writing that it does not consent to the intended course of action, it shall
set out the reasons for this, as well as the course of action which should be
followed in respect of any proposed admission of liability, compromise or
agreement with respect to the Claim.

(ii) The Indemnified Party shall take and cause its
Affiliates to take all such commercially reasonable steps or proceedings as the
Indemnifying Party may reasonably consider necessary to avoid, resist, defend,
appeal or compromise any Claim, provided that the Indemnifying Party bears all
the fees, costs and expenses in such connection.

(c) If the Indemnifying Party, within a reasonable time after
notice of any such Claim, fails to assume the defence thereof, the Indemnified
Party or any of its Affiliates shall (upon further notice to the Indemnifying
Party) have the right to undertake the defence, compromise or settlement of such
Claim on behalf of and for the account and risk of the Indemnifying Party,
subject to the right of the Indemnifying Party to assume the defence of such
Claim at any time prior to the settlement, compromise or final determination
thereof.

<PAGE> 53

(d) Anything in this Section 8.3 to the contrary
notwithstanding, (i) if there is a reasonable probability that a Claim may
Adversely affect the Indemnified Party or any of its Affiliates other than as a
result of money damages or other money payments, the Indemnified Party or such
Affiliate shall have the right to defend, at its own cost and expense, and to
compromise or settle such Claim with the consent of the Indemnifying Party and
(ii) the Indemnifying Party shall not, without the written consent of the
Indemnified Party (which shall not be unreasonably withheld or delayed), settle
or compromise any Claim or consent to the entry of any judgment unless the
settlement, compromise or judgment includes as an unconditional term thereof the
giving by the claimant or the plaintiff to the Indemnified Party or such
Affiliate, or both, a release from all liability in respect of such Claim.

(e) Upon the determination of the liability under this
Section 8.3, the Indemnifying Party shall pay to the Indemnified Party within
ten (10) Days after such determination, the amount of any Claim for
indemnification made hereunder. Upon the payment in full of any Claim, the
Indemnifying Party shall be subrogated to the rights of the Indemnified Party
against any Person or Authority with respect to the subject matter of such
Claim.

8.4 No Waiver of Subrogation. Nothing in this Agreement shall be
construed as a waiver of any right of subrogation to which any insurance
Companies may be entitled under any insurance policy maintained by Buyer, or
Seller or the Companies.

8.5 Remedies Cumulative. The remedies provided in this Agreement shall
be cumulative and shall not preclude assertion by any of the parties hereto of
any other rights or the seeking of any other remedies against any other party
hereto.

8.6 Injunctive Relief. The parties hereto shall be entitled to
specific performance and injunctive relief for breach of any agreement,
commitment, undertaking contained in this Agreement or to compel another party
to take any action or to refrain from taking any action, or to cause any other
party to take any action or to refrain from taking any action, that may be
required or prohibited, as the case may be, by the provisions of this Agreement.

8.7 General Provisions and Limitations.

(a) Subject to Section 8.7(d), all indemnification payments to
be made by an Indemnifying Party shall be made without withholding of or
deduction for or on account of any present or future Taxes, unless such
deduction or withholding is required by

<PAGE> 54

applicable law. If the Indemnifying Party is so required to withhold or deduct,
then the Indemnifying Party shall pay to the Indemnified Party such additional
amount as will result in the Indemnified Party receiving, after such withholding
or deduction, the amount which would otherwise have been received by it in
respect of such payment if no such Taxes had been imposed.

(b) Subject to Section 8.7(d), if and to the extent that any
sums payable to the Indemnified Party by the Indemnifying Party pursuant to a
direct Claim prove to be insufficient, by reason of any Taxes suffered thereon,
to compensate fully the Indemnified Party for the damages suffered by it, the
Indemnifying Party shall pay to the Indemnified Party such additional sum as
(after taking into account any taxation suffered by the Indemnified Party
thereon) shall be required to make up the relevant deficit. If and to the extent
that any sums payable to the Indemnified Party by the Indemnifying Party
pursuant to a third party Claim prove to be insufficient, by reason of any Taxes
suffered thereon, for the Indemnified Party to discharge the corresponding
liability to the Person or Authority having made such third party Claim (~'Third
Party"), or to reimburse the Indemnified Party for the cost incurred by it in
discharging the corresponding liability to a Third Party, the Indemnifying Party
shall pay to the Indemnified Party such additional sum as (after taking into
account any Tax suffered by the Indemnified Party thereon) shall be required to
make up the relevant deficit.

(c) Subject to Section 8.7(d), if and to the extent that any sums
constituting (directly or indirectly) an indemnity to the Indemnified Party but
paid by the Indemnifying Party to any Third Party shall be treated as taxable in
the hands of the Indemnified Party, the Indemnifying Party shall pay to the
Indemnified Party such sum as (after taking into account any Tax suffered by the
Indemnified Party on the compensating sum) shall reimburse the Indemnified Party
for any Taxes suffered by it in respect of the first-mentioned sum.

(d) Any payment by or on behalf of Buyer or by or on behalf of
Seller under this Article 8 will be treated as an adjustment to the Purchase
Price; provided, however, that to the extent it cannot be so characterized for
Tax purposes or if such indemnification occurs after the expiration of the
statute of limitations for the 1997 taxable year, the recipient of any such
payment shall be entitled to an additional payment to cover Taxes on the payment
less any allowable Tax deductions attributable to payment of the indemnified
Claim.

8.8 Right of Set-Off. Buyer (or Seller) shall be entitled to set off
against and deduct (or add) from the Fixed Purchase Price or Contingent Purchase
Price payable to Seller any

<PAGE> 55

amounts owing by Seller to Buyer (or Buyer to Seller) pursuant to this Article
8.

8.9 Cooperation of the Parties. Each party shall give the other
parties its full cooperation in defending all Claims subject to indemnification
hereunder, including furnishing witnesses and documentary evidence to the extent
available; provided, however, that a party may charge another party a reasonable
amount for the time and travel expenses of witnesses and for photocopying
documents that it furnishes. If a party shall fail to give reasonable assistance
by way of testimony or otherwise in the defence of such Claim or litigation,
then the other parties may settle such claim or litigation in any manner it
deems appropriate and the party which failed to give such assistance shall be
bound by the terms of such settlement.

ARTICLE 9

TERMINATION

9.1 Termination Prior to the Initial Closing. This Agreement may be
terminated at any time prior to the Initial Closing:

(a) by mutual written consent of Buyer and Seller;

(b) by either Seller or Buyer in writing, without liability to
the terminating party on account of such termination (provided the terminating
party is not otherwise in default or in breach of this Agreement), if the
Initial Closing shall not have occurred on or before the Termination Date;

(i) if there shall be any law or regulation coming into
force after the date of this Agreement that makes consummation of the
transactions contemplated hereby illegal or otherwise prohibited or if any
judgment, injunction, decree or order enjoining any of the parties from
consummating the transactions contemplated hereby is entered and such judgment,
injunction, decree or order shall have become final and nonappealable;

(ii) if any bona fide action or proceeding shall be pending
against any party on the Initial Closing Date that could result in an
unfavorable judgment, injunction, decree or order that would prevent or make
unlawful the carrying out of this Agreement; or

<PAGE> 56

(iii) if all of the conditions to such party's obligations
set forth herein are not satisfied prior to the Initial Closing; or

(d) by either Seller or Buyer in writing, without liability to the
terminating party on account of such termination (provided the terminating party
is not otherwise in default or in breach of this Agreement), if Buyer on the one
hand or Seller on the other hand shall (i) fail to perform in any material
respect its undertakings and agreements contained herein required to be
performed prior to the Initial Closing Date, (ii) breach in any material respect
any of its representations, warranties or undertakings contained herein if such
breach would cause a condition to the obligation of the terminating party to
close not to be satisfied and if such failure to perform or breach has not been
waived by the terminating party, or (iii) make any representation or warranty
which is not materially accurate when made and the effect thereof is to cause,
with or without the passage of time or giving of notice, a material Adverse
Change to Sellers' or the Companies' or Buyers' rights hereunder; provided,
however, that a party's right to indemnification hereunder shall not be affected
by such party's waiver of its right of termination pursuant to this Section 9.1
if such right of termination arises from a willful breach of this Agreement.

9.2 Procedure and Effect of Termination Prior to Initial Closing.

In the event of termination of this Agreement prior to the Initial
Closing and abandonment of the transactions contemplated by this Agreement,
written notice thereof shall forthwith be given to Buyer or Seller, as the case
may be, and this Agreement shall terminate (except for such clauses as are
expressed to continue to apply after termination) and the transactions
contemplated hereby shall be abandoned, without further action by either of the
parties hereto. If this Agreement is terminated as provided herein:

(a) upon request therefor, each of the parties hereto will
redeliver all documents, work papers and other material of the other parties
relating to such party or any of their Affiliates or the transactions
contemplated hereby, whether obtained before or after the execution hereof, to
the party furnishing the same;

(b) all filings, applications and other submissions made pursuant
to the terms of this Agreement shall, to the extent practicable, be withdrawn
from the Authority or other Person to which they were made; and

<PAGE> 57

(c) none of the parties hereto shall have any liability or further
obligation to the other party to this Agreement pursuant to this Agreement
except as stated in this Section 9.2; provided, that no termination of this
Agreement in accordance with Section 9.1 shall relieve any party hereto of
liability resulting from any violation or breach of this Agreement by such
party.

9.3 Term and Termination after the Initial Closing.

(a) After the Initial Closing has occurred, this Agreement shall
continue in full force and effect until terminated in accordance with the
provisions of this Section 9.3.

(b) This Agreement shall automatically terminate without notice
(except for such clauses as are expressed to continue to apply after
termination) in the event of:

(i) Buyer or Seller acquiring all the ordinary shares in the
Companies; or

(ii) the dissolution of the Companies following their
winding-up.

(c) This Agreement may be terminated by Buyer or Seller (the
"Non-Defaulting Party") at any time by notice in writing to the other party (the
"Defaulting Party") if, in relation to the Defaulting Party:

(i) its winding-up is commenced (other than a winding-up in
connection with a solvent amalgamation, reconstruction or reorganization
approved by the Non-Defaulting Party); any encumbrances takes possession of, or
a receiver or manager is appointed over, any of the Defaulting Party's assets or
business and such assets or business are not released within ten (10) Business
Days; the Defaulting Party proposes a composition with any class or all of its
creditors, or takes or suffers any similar action in consequence of debt; or any
distress, execution, sequestration or other process is levied, enforced upon or
taken out against any of its property and not discharged within ten (10)
Business Days;

(ii) it becomes unable to pay its debts in the ordinary course
of business;

(iii) it ceases or threatens to cease wholly or substantially
to carry on its business (otherwise than in connection with a solvent
amalgamation, reconstruction or reorganization approved by the Non-Defaulting
Party);

<PAGE> 58

(iv) it commits a material breach of any of the terms of this
Agreement which cannot effectively be remedied; or

(v) it commits a remediable breach of any of the terms of this
Agreement which it fails effectively to remedy to the reasonable satisfaction of
the Non-Defaulting Party within sixty (60) Days of receipt of notice from the
Non-Defaulting Party specifying the breach and requiring it to be remedied, and
Buyer and Seller agree that during that period of sixty (60) Days, the
principals of Buyer and Seller shall meet to attempt to resolve any differences
in an amicable fashion, and such sixty (60) Day period may be extended, but only
by mutual agreement.

9.4 Put Rights of Buyer.

(a) During a period of three years from the date of this
Agreement, Buyer may by notice in writing to Seller (the "Option Notice")
require Seller (or such other persons as may be nominated by Seller) to purchase
all (but not some only) of the Shares held by it and by any of its Affiliates,
together with all rights then attached thereto (both lots of shares, the "Option
Shares"), in either case at the price specified in the Option Notice (the
"Option Price") or such price as may be agreed or determined pursuant to Section
9.4(b) or (c).

(b) Seller may within fourteen (14) Days of receipt of the Option
Notice accept the Option Price, agree with Buyer on a price other than the
Option Price or require by notice in writing to Buyer that the Option Price be
certified by an independent valuer pursuant to Section 9.4(c). If Seller does
not serve such notice in writing within the said period, the price for the sale
and purchase of the Option Shares shall be the Option Price (unless otherwise
agreed in writing between Buyer and Seller).

(c) If so required by Seller pursuant to Section 9.4(b) the
Option Price (which shall not be discounted solely on account of a minority
holding) shall be certified by an independent valuer (appointed by agreement
between Buyer and Seller, or, in default of such agreement, nominated by the
President for the time being of the Singapore International Arbitration Centre
on the written application of either party) as being the fair market value of
the Option Shares as of the date of Buyer's Option Notice, which shall be valued
as between a willing seller and a willing buyer contracting on an arm's-length
basis, and having regard to the fair value of the assets of the Companies as a
going concern.

(d) Completion of any sale and purchase shall take place in
accordance with Section 9.5 at the principal office of the Companies on the
first Business Day occurring after the expiration of twenty-one (21) Days from
receipt by Seller of the Option

<PAGE> 59

Notice, or, if later, fifteen (15) Business Days after the price settled by any
independent valuer appointed pursuant to Section 9.4(c) has been communicated in
writing to Buyer and Seller.

(e) The fees and expenses of any independent valuation to settle
the Option Price shall be borne equally by Buyer and Seller. All other fees and
expenses, including stamp duty, but excluding Seller's legal and financial fees
and expenses, shall be borne by Buyer.

(f) Seller may assign his obligations under Section 9.4 to such
persons as he nominates by notice to Buyer, except that as between Buyer and
Seller, Buyer may continue to deal only with Seller for purposes of paragraphs
(b) and (c) of Section 9.4.

9.5 Option Closing.

(a) At completion of any sale and purchase referred to in Section
9.4:

(i) Buyer shall deliver or procure that there is delivered to
Seller (or his assignees) all documents and instruments necessary and customary
to transfer the legal and beneficial ownership of the Option Shares to Seller
(or his assignees), free and clear of all Encumbrances and such other documents
as Seller (or his assignees) may reasonably require to show good title to the
Option Shares;

(ii) Seller shall deliver or procure that there be delivered
to Buyer or to its order by certified cheque or banker's draft the Option Price
(less any applicable withholding tax) made payable to Buyer or to its order; and

(iii) Buyer shall deliver to Seller the written resignation of
the Director appointed by Buyer in relation to the Companies.

(b) The exercise of any option by Buyer pursuant to Section 9.4
shall be without prejudice to any other remedies available to Seller or Buyer
whether under this Agreement or otherwise.

<PAGE> 60

ARTICLE 10

DISPUTE RESOLUTION

10.1 Arbitration.
(l / Save as set out in this Agreement, any (a)/
dispute, controversy or claim arising but of or in relation to this Agreement,
including, without limitation, its existence, validity, performance or
termination, whether arising during or after its term, may be finally determined
by arbitration in accordance with the Rules of the Singapore International
Arbitration Centre as hereinafter modified or supplemented. The law of the
arbitration shall be the International Arbitration Act (Cap. 143A). The
arbitration procedure set forth in this Article 10 shall be the sole and
exclusive means of settling or resolving any dispute referred to in this Section
lO.l(a):

(b) With respect to any arbitration described in Section 10.1(a)

(i) the arbitration shall be held in Singapore;

(ii) the arbitration panel shall consist of three (3)
arbitrators selected as follows: each of Buyer and Seller on its own behalf
shall select one arbitrator; and the two arbitrators so appointed shall select a
third arbitrator. Should the dispute arise between the Companies and Buyer only,
Seller shall select one arbitrator on behalf of the Companies, and if between
the Companies and Seller only, Buyer shall select one arbitrator on behalf of
the Companies. In all other cases, an arbitrator shall not be selected on behalf
of the Companies. The third arbitrator shall be the presiding arbitrator. In the
event either Buyer or Seller shall have failed to select an arbitrator within
fifteen (15) Days after the other party has selected its arbitrator or the
arbitrators so selected shall fail to agree on the remaining arbitrator within
thirty (30) Days, such arbitrator shall be selected by the President for the
time being of the Singapore International Arbitration Centre. All arbitrators
shall be lawyers experienced in international transactions and shall be fluent
in English;

(iii) No arbitrator shall be related to, employed by,
affiliated with or have had a substantial or ongoing business relationship with,
nor have a pecuniary or non-pecuniary interest in, Buyer, Seller, the Companies
or any Affiliate of the foregoing persons;

<PAGE> 61

(iv) the arbitrators shall permit each party to the
arbitration to call and question any witness (including any expert witness), to
cross-examine any witness called by any other party to the arbitration and to
request any other party to the arbitration to produce any relevant documents or
evidence prior to or at any hearing;

(v) all documents relating to the arbitration proceeding,
and the proceedings themselves, shall be framed in the English language; and

(vi) the arbitrators shall make their award in writing within
sixty (60) Days of the commencement of the proceedings.

(c) Any arbitral award made in an arbitration pursuant to this
Article 10 shall be binding and shall constitute the exclusive remedy of the
parties for all claims, counterclaims, issues or accountings presented to the
arbitrator. Any such award shall be exclusive of any tax deduction or offset,
and where appropriate shall include interest from the date of breach or other
violation of the agreement until the arbitral award is fully paid, such interest
to be calculated at a rate prescribed by the arbitrator. Judgment upon the
arbitral award may be entered in any court that has jurisdiction in respect of
such award. The court may enforce the award rendered hereunder. The fees of the
arbitrators and the other reasonable and documented costs of the prevailing
party in such arbitration, including reasonable attorneys' fees, shall be borne
by the non-prevailing party. Any additional costs, fees or expenses incurred in
enforcing the arbitral award shall be charged against the party resisting its
enforcement.

(d) Nothing contained in this Article 10 shall prevent Buyer or
Seller from seeking temporary injunctive relief from any judicial or
administrative authority pending the resolution of a controversy or claim by
arbitration.

(e) Nothing contained in this Article 10 shall prevent Buyer or
Seller from bringing any action or proceeding seeking tO enforce any provision
of, or based on any right arising out of, this Agreement against any of the
parties in the courts of any state in the United States in which Buyer is
qualified to do ~ business (currently the States of Florida, Texas and New York,
U.S.A. and each of the parties consents to the jurisdiction of such courts
(and of the appropriate appellate courts) in any action or proceed and waives
any objection to venue laid therein. Process in any action

<PAGE> 62

or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.

ARTICLE 11

MISCELLANEOUS

11.1 Survival of Representations, Warranties and Undertakings.

All representations and warranties of the parties hereto and
related indemnification provisions contained in this Agreement shall survive
indefinitely after the Initial Closing Date, subject only to the applicable
statutes of limitation. The undertakings and agreements contained herein to be
performed or complied with after the Closing shall survive without limitation as
to time, unless otherwise provided herein. The applicable expiration date for
the survival of an applicable representation, warranty or undertaking shall be
referred to herein as the "Expiration Date."

11.2 Entire Agreement. This Agreement, including the Exhibits and
Schedules hereto and the other agreements, documents and instruments referred to
herein, constitute the sole understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings of
the parties hereto with respect to the transactions contemplated by this
Agreement.

11.3 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns; provided, however, that
neither this Agreement nor any of the rights, obligations or interests hereunder
shall be assigned, delegated or otherwise transferred by any party without the
prior written consent of Buyer or Seller (as the case may be) hereto; and
provided, further, that no assignment of this Agreement or any of the rights,
obligations or interests hereunder shall relieve the assignor of its obligations
under this Agreement.

11.4 No Third Party Beneficiary Rights. This Agreement is not intended
to and shall not be construed to give any Person or Authority other than the
parties signatory hereto and their respective Affiliates, successors and
permitted assigns any benefit or rights (including, without limitation, any
third party beneficiary rights) with respect to or in connection with any
agreement or provision contained herein or contemplated hereby, nor is anything
in this Agreement intended to relieve or discharge the liability of any third
Persons or Authorities to any party to this

<PAGE> 63

Agreement, nor shall any provision give any third Persons or Authorities any
right of subrogation or action over or against any party to this Agreement.

11.5 No Agency. No party to this Agreement shall be deemed a partner
or agent of or joint venturer with any other party and no such party shall have
any right or authority, nor shall any party hereto attempt, to enter into any
contract, commitment or agreement to incur any debt or liability, of any nature,
in the name of any other party.

11.6 Counterparts. This Agreement may be executed in counterparts,
each of which shall for all purposes be deemed to be an original and all of
which shall, taken together, constitute the same instrument.

11.7 Interpretation. The table of contents and article and section
headings contained in this Agreement are solely for reference, shall not be
deemed to constitute part of this Agreement, and shall not affect the
interpretation hereof.

11.8 Amendment and Modification. This Agreement may be amended,
modified or supplemented only by written agreement of each of the parties hereto
with respect to any of the terms contained herein.

11.9 Waiver of Compliance: Consents. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any obligation,
undertaking, agreement or condition herein may be waived by the party entitled
to the benefits thereof only by a written instrument signed by such party
granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, undertaking, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any of the parties hereto, such consent shall be given in writing in a manner
consistent with the requirements for a waiver of compliance as set forth in this
Section 11.9.

11.10 Expenses: Transfer Taxes: Attorneys' Fees.

(a) Expenses. Except as otherwise provided in this Agreement,
and whether or not the transactions contemplated hereby are consummated, each of
the parties hereto shall pay all costs and expenses incurred by it, or on its
behalf, in connection with this Agreement and the transactions contemplated
hereby, including, without limiting the generality of the foregoing, fees and
expenses of its own financial consultants, accountants and legal advisors.

<PAGE> 64

(b) Transfer Taxes. All transfer, documentary, sales, use,
registration, recording, conveyancing, notarial and other such taxes, duties,
fees, costs and expenses (including any penalties and interest) incurred in
connection with this Agreement and the transactions contemplated hereby,
including any expenses, fees and commissions or otherwise, arising out of the
delivery of the Shares by or on behalf of Seller to Buyer in any sale of Shares
by Seller to Buyer contemplated herein shall be borne by Buyer. Buyer and Seller
shall cooperate in the filing of all necessary tax returns and other returns and
documentation with respect to all such taxes, duties, fees, costs and expenses,
and, if required by applicable law, Seller and Buyer will each join in the
execution of any such tax returns and other documentation.

(c) Attorneys' Fees. If any legal or arbitral action or other
proceeding is brought Agreement, including the agreement to pursuant to Article
10, or because of default or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party or be entitled
in addition to any other relief to which it or they may be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or proceeding
including fees and costs incurred on appeal and in collecting or enforcing any
award or judgment, and the court or arbitral panel shall so provide in its
judgment or award.

(d) Interest. Any sum due under this Agreement to any party hereto
not paid within the period, if any, provided for in this Agreement or, if not,
within a period of thirty (30) Days after becoming due shall bear interest at
the annual rate of 15% (fifteen percent) from the expiry of said period until
its full payment. Interest shall be calculated on the basis of a year of 365
Days and Days actually elapsed. This paragraph is not to be interpreted as
giving any party extra time for payment and does not constitute a waiver of any
other remedy available.

11.11 Notices. Any notice, request, instruction or other document
permitted or required to be given hereunder by any party hereto to any other
party shall be in writing and delivered personally or sent by facsimile
transmission (confirmed by express courier or express mail), by internationally
recognized express courier or by express mail service, expenses prepaid, as
follows:

<PAGE> 65

if to Buyer, to:

JLM Industries, Inc.
8675 Hidden River Parkway
Tampa, Florida 33637
United States of America
Fax: (1-813) 632-3301
Attn: John T. White, General Counsel

if to Seller, to:

Tan Siew Kiat
135 Sunset Way #01-04
Singapore 597158
Fax: (65) 323-5455

if to Asia, to:

SK Chemicals Asia Pte. Ltd.
16B Trengganu Street
Singapore 058470
Fax: (65) 323-5455
Attn: Mr. Tan Siew Kiat

if to Trading, to:

SK Chemical Trading Pte. Ltd.
16B Trengganu Street
Singapore 058470
Fax: (65) 323 - 5455
Attn: Mr. Tan Siew Kiat

or to such other address or facsimile number for a party as shall be specified
by like notice. All notices shall be effective on actual receipt only.

11.12 Public Announcements. Except as may be required by law and
evidenced by written opinion of legal counsel, none of the parties hereto shall
make and Seller shall ensure that the Companies refrain from making any public
statement, including, without limitation, any press release, with respect to
this Agreement or the transactions contemplated hereby without prior
consultation and opportunity to comment being afforded to the other party. Each
party shall give the other party copies of such written opinion and advance
notice of any intended disclosure and, to the extent practicable, afford the
other party the opportunity

<PAGE> 66

to consult with the disclosing party and comment on the proposed disclosure.

11.13 Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of Singapore.

IN WITNESS WHEREOF, each of the parties hereto has duly executed or
caused this Agreement to be duly executed on its behalf as of the date first
above written.

JLM INDUSTRIES, INC.
("Buyer")

By:
--------------------------------------
Name:
-------------------------------
Title:
------------------------------

TAN SIEW KING
("Seller")
/s/
-----------------------------------------

<PAGE> 67

CERTIFICATE

The undersigned, Tan Siew Kiat, hereby certifies that: (A) the
representations and warranties set forth in Article 3 of the Investment
Agreement dated as of April 25, 1997, are true and correct as of the Initial
Closing Date; and (B) I have performed and complied with each and every
undertaking, agreement and condition required to be performed or complied with
by me prior to or on the Initial Closing Date.

IN WITNESS WHEREOF, the undersigned has hereinbelow executed this
Certificate as of April 22, 1997.

/s/ Tan Siew Kiat
---------------------------------
Tan Siew Kiat

<PAGE> 68

SK CHEMICALS ASIA PTE LTD
(Incorporated in the Republic of Singapore)

MINUTES OF AN EXTRAORDINARY GENERAL MEETING OF THE COMPANY HELD
at 16B TRENGGANU STREET SINGAPORE 058470
on 21 April 1997
at 9:00 a.m.

PRESENT: As per attendance sheet.

NOTICE: All members of the Company being present, it was agreed that
the notice of the meeting has been duly given and is taken as
read.

CHAIRMAN: Mr. Tan Siew Kiat was duly appointed the chairman of the
meeting.

SPECIAL RESOLUTION

RESOLVED:

1. THAT Article 74 of the Articles of Association of the Company be amended by
inserting as the opening words of Article 74 the words "Subject to Article
82A,".

2. THAT Article 79 of the Articles of Association of the Company be amended by
inserting as the opening words of Article 79 the words "Subject to Article
82B".

3. THAT Article 82 of the Articles of Association of the Company be amended by
inserting as the opening words of Article 82 the words "Subject to Article
82A,".

4. THAT after Article 82 of the Articles of Association of the Company there
be inserted the following new Article 82A;

"82A. So long as JLM Industries, Inc. (JLM), of Tampa Florida, USA holds not
less than 25% of the total shares of the Company for the time being issued,
JLM shall be entitled to appoint and from time to time replace one Director
of the Company ("the JLM Director"). Each appointment and removal by JLM of
the JLM Director shall be effected by notice sent to the registered ounce of
the Company. JLM shall be responsible for and shall hold the Company
harmless from and against any claim for damages asserted against the Company
by the JLM Director or tosses incurred by the Company resulting from any and
all acts or omissions of the JLM Director other than acts or,( The JLM
Director may appoint an alternate to represent him at meetings of the
directors which he is unable to attend. The JLM Director shall not be
subject to the retirement by rotation provisions in Articles 74 to 76."

5. THAT after Article 100 of the Articles of Association of the Company there
be inserted the following new Articles 100A, 100B and 100C:

5
<PAGE> 69

"100A. Any director may participate in and at at any meeting of the
directors through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can
hear each other. Participation in such a meeting shall constitute attendance
and presence in person at the meeting of the person or persons so
participating for all purposes.

100B. Meetings of the directors shall take place at such time or times as
may be determined by the directors but in any event not less frequently
than twice per year and on not less than fourteen days' prior written notice
(unless otherwise agreed by all the directors), which notice shall be
accompanied by an agenda.

100C. Except with the sanction of a prior resolution of the directors
(including the JLM Director), the Company shall not:

(i) sell, transfer, lease, assign, dispose of or part with control of any
interest in all or any material part of its undertaking, business, property
or assets (whether by a single transaction or a series of transactions), or
contract to do so, or acquire or contract to acquire any business, property
or assets which would, following such acquisition, constitute a material
part of its business, property or assets (and for these purposes any part
accounting for ten percent or more of the proms, turnover or net asset value
of the Company shall be deemed material);

(ii) make or agree to make any change to its authorized or issued share
capital or grant any option over, or issue any investment carrying rights of
conversion into, any of Is share capital;

(iii) do or permit or suffer to be done any act or thing whereby it may be
wound up (whether voluntarily or compulsorily);

(iv) make any change to its Memorandum or Articles of Association; or

(v) dispose of any equity interest or investment in equity capital of
ICP-Chemquest Vietnam Ltd., a Company incorporated with limited liability in
Vietnam."

6. THAT after Article 107 of the Articles of Association of the Company
thereby inserted the following new Articles 107A, 107B and 107C:

107A. Any shareholders holding not less than 25 percent of the total shares
of the Company for the time being issued shall be entitled within normal
business hours and upon giving not less than seventy-two hours' notice to
the company of its desire so to do, to examine the books, accounts and
records to be kept by or on behalf of the Company and shall be entitled to
be supplied with all relevant information ( including monthly management
accounts and operating statistics and such trading, financial and other
information in such form as it may reasonably require) to keep it properly
informed about the business and affairs of the Company. Without limiting the
generality of the preceding sentence, any such shareholder shall be entitled
within the time and upon the notice referred to in the preceding sentence,
to procure that the examination and review referred to in the preceding
sentence be conducted by any of its respective financial or legal advisors.

<PAGE> 70

107B. The books, records and accounts of the Company shall be kept on an
accrual basis of accounting and shall be maintained for a minimum period of
six years, except for those records required to be kept for a longer period
under any Singapore legal requirement, or at the reasonable request of any
shareholder holding not less than 25 percent of the total shares of the
Company for the time being issued.

107C. The Company shall furnish to each shareholder holding not less than 25
percent of the total shares of the Company for the time being issued the
following financial information relating to the Company:

(i) a copy of audited annual financial statements within ninety days
following the end of the applicable fiscal years:

(ii) a copy of unaudited quarterly financial statements within thirty days
following the end of the applicable quarter; and

(iii) a copy of unaudited monthly statements within thirty days following
the end of the applicable month.

Confirmed as correct records by
Chairman of meeting,

/s/Tan Siew Kiat
- --------------------------------------
TAN SIEW KIAT

Dated: 21 April 1997

Shareholders:-

Vote for the above motions. Against the above motions.

/s/Tan Siew Kiat
- ----------------------------------- -----------------------------------
TAN SIEW KIAT TAN SIEW KIAT

/s/
- ----------------------------------- -----------------------------------
INDUSTRIAL CHEMICALS INDUSTRIAL CHEMICALS
PROMOTION CO LTD PROMOTION CO LTD

<PAGE> 71

SK CHEMICALS ASIA PTE LTD
(Incorporated in the Republic of Singapore)

Attendances at an Extraordinary General Meeting of Company held
at 16B Trengganu Street Singapore 058470
on 21 April 1997
at 9 OO a.m.

PRESENT: TAN SIEW KIAT /s/
-----------------------------------

INDUSTRIAL CHEMICALS
PROMOTION CO LTD /s/
-----------------------------------

<PAGE> 1
EXHIBIT 10.31

AGREEMENT FOR SALE AND PURCHASE OF COMMON STOCK

John L. Macdonald and Gene Harmeyer (collectively, "Seller"), being the owners
of all of the issued and outstanding capital stock of Aurora Chemical, Inc., a
corporation organized and existing under the laws of the State of Texas with
principal offices at 2103 Cypress Landing, Houston, Texas 77090 (the
"Corporation") and JLM Marketing, Inc., a corporation organized under the laws
of Delaware, with principal offices at 8675 Hidden River Parkway, Tampa,
Florida 33637 ("Purchaser") hereby agree as follows concerning the sale and
purchase of all of the issued and outstanding common shares of the Corporation
effective as of January 1, 1997.

1.0.1 RECITALS.

a. Ownership of Shares. Seller is the owner of one hundred (100)
shares of the issued and outstanding common stock of the Corporation, being one
hundred percent (100%) of such capital stock (the "Shares").

b. Purchase and Sale of Shares. Subject to the satisfaction of
all contingencies set forth in this Agreement, Seller wishes to sell and
Purchaser wishes to purchase the Shares on the terms and conditions set forth
in this Agreement.

1.0.2 SALE AND PURCHASE OF SHARES.

Subject to and upon the terms and conditions of this Agreement, at the
Closing as hereinafter set forth Seller agrees to sell, assign, transfer and
deliver the Shares to Purchaser and Purchaser agrees to purchase the Shares
from Seller. The Shares shall be sold to Purchaser in a transaction which is
exempt from the registration provisions of applicable state and federal
securities laws, in accordance with the representations of Purchaser
hereinafter set forth.

1.0.3 PURCHASE PRICE AND PAYMENT OF PURCHASE PRICE.

a. Purchase Price. The Purchase Price for the Shares shall be
One Million Two Hundred Fifty Thousand and 00/100 Dollars ($1,250,000.00).

b. Payment of the Purchase Price. The Purchase Price shall be
paid at the Closing as follows:

(1) $150,000 in cash in immediately available funds
payable to Gene Harmeyer as adjusted by various
debits and credits as provided for in Schedule 1
annexed hereto and $100,000 by a negotiable
promissory note payable in three equal annual
installments of $33,333.33 payable on June 1, 1998,
June 1, 1999 and June 1, 2000 with interest on the
unpaid principal balance computed at the Prime Rate
as reported from time to time in the Wall
<PAGE> 2

Street Journal or, if not available, at the Prime
Rate of Citibank as in effect from time to time,
substantially in the form of Exhibit A.

(2) $1,000,000 by a negotiable promissory note which
shall bear interest at ten (10%) percent per annum,
substantially in the form of Exhibit A, which shall
be delivered to John L. Macdonald.

1.0.4 CLOSING.

The Closing shall take place June 2, 1997 at the offices of Seller's
attorneys, Mezan, Stolzberg & Schwartzman, P.C., 460 Park Avenue, New York, NY.
(the "Closing" or the "Closing Date"). Prior to the Closing, the parties shall
make the following deliveries, in escrow to Maxwell Stolzberg:

a. Deliveries by Seller.

i. Share Certificates. A certificate or certificates
representing the Shares duly endorsed in blank, or accompanied by stock powers
duly executed in blank, by Seller transferring the Shares, with all necessary
transfer tax and other revenue stamps, acquired at Seller's expense, affixed
and canceled. Seller agrees to cure any deficiencies with respect to the
endorsement of the certificates representing the Shares owned by Seller or with
respect to the stock power(s) accompanying any such certificate.

ii. Resignations. Resignations, effective as of the Closing
Date, of the Officers and Directors of the Corporation set forth in EXHIBIT B
attached hereto and made a part hereof.

iii. Books and Records. The corporate minute book, stock
transfer records and corporate seal of the Corporation, together with all
records of the Corporation, including those records not then located on the
business premises of the Corporation. Sellers shall have the right of access
for a period of six (6) years following the Closing to all of the books and
records of the Corporation in the possession or under the control of Purchaser
in connection with tax examinations, governmental audits, disputes or any other
relevant matter for which Seller has any claim or potential liability. Seller
shall pay all reasonable costs of copying such books and records.

iv. Articles of Incorporation; Bylaws, etc. Copies of:

(1) The Articles of Incorporation of the Corporation
and all amendments thereto, certified by the Secretary of State of the State
of Texas.

(2) The Bylaws of the Corporation, certified by
its Secretary.

(3) A certificate from the Secretary of State of
the State of Texas to the effect that the Corporation is in good standing or
subsisting in such jurisdiction.

2
<PAGE> 3

(4) A certificate as to the tax status of the
Corporation from the appropriate official in the State of Texas and each state
in which the Corporation is qualified to do business.

v. Consents and Authorizations. Copies of all consents
and authorizations to the transactions set forth in this Agreement, if any,
required to be obtained by Seller.

vi. Seller's Certificate. A certificate signed by each
individual Seller that, as of the Closing, Seller and the Corporation have
substantially complied with all of the warranties, representations and
covenants made by Seller in this Agreement and that such warranties,
representations and covenants are and will be true, valid and correct in all
material respects as of the Closing, with the same force and effect as if the
same had been made as of the Closing, and that the Shareholders' Equity of the
Corporation as of the Closing equals such Shareholders' Equity as of the close
of business on December 31, 1996.

vi. Other Documents. Such other documents and instruments as
are reasonably necessary to effectuate the transactions provided for in this
Agreement.

b. Deliveries by Purchaser.

i. The Purchase Price. The Purchase Price as provided in
Section 3 of this Agreement by check in the amount of $150,000 (as adjusted)
drawn on a state or national bank the accounts of which are insured by the FDIC
and a note in the amount of $100,000 payable to Gene Harmeyer and a note in the
amount of $1 million payable to the order of John L. Macdonald.

ii. Purchaser's Certificate. A Certificate signed by
Purchaser to the effect that, as of the Closing, Purchaser has substantially
complied with all of the warranties, representations and covenants made by
Purchaser in this Agreement, and that such warranties, representations and
covenants are true, valid and correct in all material respects as of the
Closing, with the same force and effect as if the same had been made at the
Closing.

iii. Other Documents. Such other documents and instruments
as, in the opinion of counsel for Seller, are reasonably necessary to
effectuate the transactions provided for in this Agreement.

1.0.5 REPRESENTATIONS AND WARRANTIES OF SELLER.

Seller represents and warrants to Purchaser on the date hereof and on
the Closing as follows:

a. Schedules. Attached hereto are the following Schedules, each of
which is complete and accurate in all material respects.

3
<PAGE> 4

i. Financial Statements. Balance sheets, statements of
operations and net worth, and statements of changes in financial position for
the Corporation for the fiscal years ended December 31, 1993, December 31,
1994, December 31, 1995 and December 31, 1996 (the "Financial Statements").

ii. Other Property. A list and description of all property,
real or personal, owned by the Corporation of a value equal to or greater than
$10,000.00. (Schedule i)

iii. Liens. A complete and accurate list of all material
liens, encumbrances, easements, security interests and other similar interests
in or on any material asset of the Corporation. (Schedule ii)

iv. Operating Licenses. A complete and accurate list of all
operating licenses required for the operation of the business of the
Corporation. (Schedule iii)

v. Written Agreements. A list of each lease, contract,
promissory note, mortgage, license or other written agreement to which the
Corporation or Seller is a party or is bound relating to the business or
properties of the Corporation which involves or can reasonably be expected to
involve aggregate future payments or receipts by the Corporation (whether by
the terms of such lease, contract, promissory note, mortgage, license, or other
written agreement or as a result of a guarantee of the payment of or indemnity
against the failure to pay the same) of $10,000.00 or more annually during the
twelve (12) month period ending December 31, 1996 setting forth in reasonable
detail the parties, terms and any special provisions thereof. (Schedule iv).

vi. Consents Required. A list of all material agreements to
which Seller or the Corporation is a party or is bound under the terms of which
consent to the transactions set forth in this Agreement may be required to
avoid a default thereunder or pursuant to which notice of such transaction is
required, stating the nature of such consent or notice and the parties from
whom consent must be obtained or to whom notice must be given. (Schedule v)

vii. Accounts Receivable. A list of all of material accounts
receivable of the Corporation as of three (3) days prior to the date of this
Agreement - with each customer of the Corporation deemed collectible by the
Corporation (the "Accounts Receivable") showing the name and address of the
account debtor, the amount, status and the terms of the account and the
collateral, if any, held by the Corporation and the location thereof.
(Schedule vi)

viii. Uncollectible Accounts. A list of all material
accounts receivable of the Corporation deemed uncollectible by the Corporation,
stating the name and address of the account debtor, the amount unpaid and the
reason for uncollectability and the amount, if any, reserved in respect thereof
on the Financial Statements for 1996. (Schedule vii)

4
<PAGE> 5

ix. Articles of Incorporation and Bylaws. Copies of the
current Articles of Incorporation and Bylaws of the Corporation, together with
all amendments thereto to the date hereof. (Schedule viii)

x. Officers and Directors. A list of all officers and
directors of the Corporation. (Schedule ix)

xi. Salary Schedule. A list of the names and the current
salary rate for each present employee of the Corporation who received
$25,000.00 or more in aggregate compensation from the Corporation, by way of
salary, commission, bonus or otherwise during the year ended December 31, 1995,
or who during the year ending December 31, 1996 is presently scheduled to
receive from the Corporation aggregate compensation in excess of $25,000.00 if
such employee remained employed for the full year 1996. (Schedule x)

xii. Litigation. A list of all written civil, criminal,
administrative, regulatory, arbitration or other such proceedings or
investigations pending or threatened to the knowledge of Seller which may
materially and adversely affect the business of the Corporation setting forth
for each matter the case name, file number, jurisdiction in which pending,
amount in controversy, and a brief summary of the history. (Schedule xi)

xiii. Employee Benefit Plans. A list of all stock option,
bonus, incentive compensation, deferred compensation, profit sharing,
retirement, pension, group insurance, disability, death benefit or other
benefit plans, trust agreements or arrangements of the Corporation in effect on
the date hereof, to which the Corporation has contributed or has been obliged
to contribute in any of their last preceding three (3) fiscal years, or which
will become effective after the date hereof. (Schedule xii)

xiv. Insurance. A list and description of all material
insurance policies naming the Corporation as an insured or beneficiary or as a
loss payee or for which the Corporation has paid all or part of the premium in
force on the date hereof, specifying any notice or other information known to
Seller regarding cancellation thereof or premium increases thereon. (Schedule
xiii)

xv. Banks. A list showing:

(1) The name of each bank in which the Corporation
has an account or safe deposit box;

(2) The names of all persons authorized to sign checks
thereon or make withdrawals therefrom; and

(3) The names and addresses of all persons holding
powers of attorney from the Corporation and a copy or statement of such power
of attorney. (Schedule xiv)

5
<PAGE> 6

xvi. Intellectual Property Rights. A list of all material
Intellectual Property Rights (hereinafter defined) owned or licensed by the
Corporation, or used in the business thereof, together with an identification
of any license agreement to which the Corporation is party or is bound,
including true and accurate copies of all registrations and such licenses.
(Schedule xvii)

xvii. Tax Returns and Tax Information; Reconciliation. (a) A
list setting forth all federal, state, local and foreign income tax returns
filed with respect to the Corporation for taxable periods ended on or after
December 31, 1993 and indicating those returns that have been audited by the
relevant tax authority, and those returns that currently are the subject of
audit. (b) A copy of the federal income tax return for the Company for the
year ended December 31, 1996, together with a reconciliation of such return(s)
to the Financial Statement of the Company for such fiscal year. (Schedule xvi)

xviii. Assignments. An assignment to the Purchaser of all
the rights and privileges under the contracts between Shell Chemical and the
Corporation for the supply of certain Phenol quantities by Shell and a contract
between Wilson Art and the Corporation for the sale of Phenol to Wilson Art.

b. Organization, Qualification, Power and Standing. The
Corporation is a corporation duly organized, validly existing and in good
standing under the laws of Texas with all requisite corporate power to own or
lease its property and to carry on its business as now being conducted. The
Corporation is duly qualified and in good standing to do business in every
jurisdiction in which the Corporation believes that such qualification is
necessary to conduct its business as such business is now being conducted,
except where a failure to so qualify would not have a material adverse effect
on the business or properties thereof.

c. Capitalization. The Corporation has issued and outstanding One
Hundred (100) shares of common and no other capital stock or securities of any
kind. All such shares are duly authorized and validly issued and are fully
paid and nonassessable, to the extent provided by law. There are no
outstanding options, warrants, rights, cause, commitments, conversion rights,
rights of exchange, plans or other agreements of any character providing for
the purchase, issuance or sale of any shares of the capital stock of the
Corporation, other than as contemplated by this Agreement.

d. Ownership, Power to Sell Shares. Seller is the owner of the
Shares free and clear of all encumbrances, liens, security interests, voting
restrictions, agreements or similar arrangements, or other equitable claims or
interests whatsoever, and has the full legal right, power and authority to enter
into this Agreement and to sell, assign, transfer and convey the Shares to
Purchaser as provided herein. Upon transfer and delivery to Purchaser of
certificates evidencing the Shares pursuant to this Agreement duly endorsed for
transfer, Purchaser will acquire full right, title and interest in and to such
Shares, free of any claims, security interests, encumbrances, security
interests, liens or rights in any other party.

6
<PAGE> 7

e. Authority. This Agreement is the valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except as may
be limited by insolvency, bankruptcy or other laws of general application
respecting the enforcement of creditor's rights generally, or by general equity
principles. Other than as set forth in Schedule v, neither the execution and
delivery of this Agreement or consummation of the transactions contemplated
herein or hereby will: (i) constitute or result in a default (or give rise to
any right of cancellation, termination or acceleration) under the terms of any
material note, bond, mortgage, indenture, license, agreement, or other
instrument or obligation to which Seller or the Corporation is a party or by
which any of the same may be bound; or (ii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to any one of them.
Except as provided in Schedule vi, Seller shall obtain the appropriate written
consents and authorizations from all parties listed in Schedule v and shall
deliver copies of the same to Purchaser prior to or at Closing.

f. Customers. Seller has no knowledge of any material termination,
cancellation, limitation, modification or change in the business relationship
between the Corporation and any customer of the Corporation which does a
material amount of business with the Corporation.

g. Operating Licenses. The Corporation, as required by law, has
obtained and paid for all licenses listed in Schedule iii. No material license
or operating authority listed in Schedule iv shall be subject to revocation as
a result of the consummation of this transaction, except as may be provided in
such Schedule.

h. Additional Representations and Warranties. Seller makes the
additional representations and warranties set forth in Rider A attached hereto,
as if they were set forth in full in this Section.

i. Full Disclosure. Each of this Agreement, any Rider, Schedule,
Exhibit or Certificate attached thereto ("Deliveries") is true, complete and
accurate in all material respects and contains all material information as
required thereby. No Delivery contains or will contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements not misleading. There is
no fact known to any individual Seller which materially and adversely affects
the business or financial condition of the Corporation or its properties or
assets, which has not been set forth in this Agreement, the Financial
Statements (hereinafter defined) (including the footnotes thereto), any
Schedule, Exhibit or certificate attached hereto or delivered in accordance
with the terms hereof. Seller or the Corporation shall promptly advise
Purchaser in writing of any matter arising or discovered by either of them
after the date of this Agreement up to the Closing Date which is required to
have been set forth or described herein or disclosed to Purchaser at or prior
to the time of execution hereof which was not so set forth herein or disclosed
or be required to be so set forth, described or disclosed as if such matter
arose prior to the date hereof. Subject to Article 5.j, such notification
shall be deemed to modify the applicable schedules and representations
previously made.

j. Truth at Closing. In addition to being true as covenants,
warranties, and representations as of the date of this Agreement, all
covenants, warranties, and representations of

7
<PAGE> 8

Seller set forth in this Agreement or any Schedule or Exhibit hereto shall be
true and correct as of the Closing and shall be of the same force and effect as
though made on said date and shall be deemed to have been made at the Closing.

k. Survival. All of the representations, warranties, covenants and
Indemnities of the Seller contained in this Agreement and the schedules, riders
and exhibits annexed hereto shall survive the Closing hereunder (unless
Purchaser had actual knowledge of any misrepresentation of breach of warranty,
representation or covenant at the time of Closing) and continue in full force
and effect until December 31, 1997 except for those relating to tax, which
shall survive the Closing four years.

1.0.6 REPRESENTATIONS AND WARRANTIES OF PURCHASER.

Purchaser represents, warrants and covenants to and with Seller on the
date hereof and on the Closing as follows:

a. Organization, Qualification, Power and Standing. Purchaser is a
corporation validly organized and in good standing under the laws of the State
of Delaware with all requisite corporate power to own or lease its properties
and to carry on its business as now being conducted.

b. Purchase for Investment. The Shares are being purchased by
Purchaser for Purchaser's own account for investment and not for the purpose of
or the view towards the resale or distribution thereof within the meaning of
the Securities Act of 1933.

c. Due Execution, The execution and delivery of this Agreement by
Purchaser and the performance by Purchaser of all Purchaser's duties and
obligations hereunder, and the consummation of the transactions contemplated
hereby have been duly authority by Purchaser's Board of Directors. No further
action will be or is necessary on the part of Purchaser in order to authorize
the execution and delivery of this Agreement by Purchaser and the performance
of Purchaser's duties and obligations hereunder. This Agreement constitutes
the legal, valid and binding obligation of Purchaser and is enforceable against
Purchaser in accordance with its terms, except as the same may be limited by
insolvency, bankruptcy or other laws of general application affecting
enforcement of creditors rights and by general equity principles.

d. Non Contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any government, agency or
court to which the Purchaser is subject or any provision of its charter or
by-laws, or (B) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to the
accelerate, terminate, modify or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Purchaser is a party or by which it is bound or to which any of its assets
is subject.

8
<PAGE> 9

e. No Financing. The transactions contemplated by this Agreement are
not subject to any financing contingency on the part of the Purchaser.

f. No Material Adverse Events. To the knowledge of Purchaser, there
are no material adverse events which will effect the business and prospects of
the Purchaser and its affiliates prior to the closing.

g. Filings. There are no filings required for this transaction under
the Hart-Scott-Rodino statute or similar acts.

1.0.7 BROKERS, ETC.

The parties mutually represent and warrant to each other that the
warranting party has not employed or used the services of any broker or finder
in connection with the transactions contemplated by this Agreement. A party
retaining a finder or broker shall indemnify, hold harmless and defend the
other party from and against all claims or finder's fees, broker's commissions
or other similar compensation made by any such broker or finder.

1.0.8 DISCLOSURE; CONFIDENTIALITY.

Seller and Purchaser agree to use their best efforts to keep this
Agreement and the execution and terms hereof confidential until Closing.
Either party may, however, disclose such matters to its directors, officers,
executive employees and professional advisors and those of prospective lenders
to such extent as may be reasonable for the negotiation, execution and
consummation of this Agreement, or to the extent reasonably required by law.
Each party shall keep confidential all information concerning the other
obtained pursuant to this Agreement and shall not use such information except
in connection with the transactions set forth herein. The foregoing
obligations of confidentiality shall continue for a period of there (3) years
following the Closing and do not pertain to the disclosure of information which
is available publicly or which is required to be disclosed by any or order of
any court. If for any reason this transaction shall not be consummated, each
party will return all such information (including all copies thereof) regarding
the other, to the other party and neither party shall make use of any such
information, directly or indirectly, for its own purposes or for that of any
affiliate, including in the solicitation of any customer of such party.

1.0.9 MISCELLANEOUS.

a. Notices. Whenever any party desires to give any notice to any
other party such notice shall be in writing and it shall be deemed to have been
properly given if (a) served in person, (b) mailed, by United States registered
or certified mail, full postage prepaid, return receipt requested (c) sent by
special courier service (e.g. Federal Express) or (d) sent by telecopy,
provided that in confirmation thereof, an executed original of such notice is
concurrently given by means of any other mode of delivery permitted hereunder,
addressed as follows:

9
<PAGE> 10

Seller: John L. Macdonald
921 Anchorage Road
Tampa, FL 33602

Eugene Harmeyer
24514 Creekview
Spring, Texas 77389

Copy to: Mezan, Stolzberg & Schwartzman P.C.
460 Park Avenue
New York NY 10022

Attn: Maxwell Stolzberg, Esq.

Purchaser: JLM Marketing, Inc.
8675 Hidden River Parkway
Tampa, FL 33637

Attn: Michael Molina

Any notice, request, demand or other communication served as provided in
Section (a) shall be deemed to have been given and received on the date of
actual receipt of such notice, request, demand or other communication. Any
notice, request, demand or other communication mailed as provided in Section
(b) or sent as provided in Section (c) shall be deemed to have been given and
received on the earlier of the date of actual receipt of such notice,
regardless of mode of delivery, or the fifth business day next following the
date of mailing by U.S. registered or certified mail or the second business day
following the date of delivery to such special courier service of such notice,
request, demand or other communication, or in the case of delivery as provided
in Section (d), the date the confirmation thereof is deemed received. A
failure to send the requisite copies does not invalidate an otherwise properly
sent notice to a party.

DATED: June 2, 1997

SELLER

__________________________
John L. Macdonald

____________________________

10
<PAGE> 11

Eugene Harmeyer

ATTEST: PURCHASER

JLM Marketing, Inc.

By_________________________ By___________________________
Michael Molina, Secretary Ted Lelek, Vice President

11
<PAGE> 12

Rider A

Additional Provisions

This Rider A is attached to and made a part of that certain Agreement
for Sale and Purchase of Common Stock dated as of January 1, 1997 between John
L. Macdonald and Eugene Harmeyer and JLM Marketing, Inc. relating to the sale
and purchase of one hundred (100) shares of the issued and outstanding common
stock of Aurora Chemicals, Inc. and contains additional provisions of such
Agreement. Such provisions are a part of the Agreement as if they had been set
forth in full in the body thereof.

R-1. ACTIONS PENDING CLOSING. Subsequent to the execution of this Agreement
and prior to Closing, Seller agrees as follows:

a. Operation of Business. The Corporation shall in all material
respects operate its business substantially as presently operated and in the
ordinary course and, consistent with such operation, Seller shall use Seller's
best efforts to preserve intact the business organizations and relationships
with all persons having business and dealings with the Corporation to keep the
services of the officers and other employees available and to maintain
favorable relations and good will with the Corporation's customers, licensors,
suppliers, distributors, clients and others with whom the Corporation do
business. Without the prior written consent of Purchaser, the Corporation
shall not:

i. Amend its Articles of Incorporation or Bylaws or cause
to be amended; or

ii. Issue or contract to issue any share of capital stock or
security exchangeable for or convertible into capital stock of the
Corporation;

iii.(a) Enter into or perform any agreement for the merger,
consolidation, or reorganization of the Corporation or any other
transaction that will effect any change in the structure or control of
the Corporation or (b) enter into or assume any contract or
obligation except for contracts or obligations in the ordinary
course of business; (c) guarantee any obligation; or (d) cancel or
forgive any indebtedness owed to the Corporation or waive any claim
that the Corporation may possess.

b. Access to Records. Purchaser and its respective agents,
representatives, attorneys and auditors shall, at all reasonable times during
normal business hours upon giving reasonable prior notice, have complete access
to all of the premises, personnel, books, records, files, agreements and
financial statements of the Corporation, provided that such access shall not
unduly interfere with the normal business operations of the Corporation.
Without limitation of the foregoing, Seller agrees to make available to
Purchaser all written reports, operating data and other information relating to
the Corporation or its business and properties, and to answer all inquiries
pertinent to the subject matter of this Agreement which Purchaser or any of its
representatives tiny make prior to the Closing. During the period from the
date of this Agreement to the Closing,

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<PAGE> 13

Seller shall cause representatives of the Corporation to confer on a regular
and frequent basis with one or more designated representatives of Purchaser to
report material operational matters and to report the general status of ongoing
operations. The foregoing review shall not affect the representations and
warranties made by Seller hereunder or the remedies of the Purchaser for
breaches of those representations and warranties, except that Purchaser shall
give prompt notice to Seller of any claim for breach of any such representation
or warranty or for indemnification. In such event, either party shall have the
right to terminate this Agreement by written notice to the other sent within
ten (10) days of the sending of Purchaser's such notice, without cost or
liability. No such termination, however, shall abrogate the duty of
confidentiality placed upon the parties by the terms of this Agreement.

c. Advice of Change. Seller will promptly upon discovery thereof
advise Purchaser of any material adverse change in the financial condition,
operating results or business prospects of the Corporation, and any other
material adverse matter respecting the business and operations of the
Corporation, or any legal action (or any threat of the same) relating to the
Corporation and/or to the transactions contemplated hereby. Seller shall cause
the Corporation to notify Purchaser of any unexpected emergency and of any
governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), adjudicatory proceedings, budget
meetings or submissions involving any material property of the Corporation, and
to keep Purchaser fully informed of such events and Purchaser's representatives
prompt access to all materials prepared in connection therewith. All such
notifications shall be deemed to be supplements to the representations,
warranties and schedules contained in or attached to this Agreement.

d. Exclusive Dealing. During the period from the date of this
Agreement to the Closing, Seller shall not take, and shall cause the
Corporation to refrain from taking, any action to, directly or indirectly,
encourage, initiate or engage in discussions or negotiations with, or provide
any information to, any person or entity, other than Purchaser, concerning any
purchase of the Shares or any merger, sale of substantial assets or similar
transaction involving the Corporation.

R-2. CONDITIONS PRECEDENT TO CLOSING. The obligations of the parties pursuant
to this Agreement are specifically contingent upon satisfaction of all of the
following:

a. Conditions Precedent to Seller's Obligations.

i. Deliveries. All deliveries by Purchaser pursuant to
Section 4.b of this Agreement shall have been made in a complete and
timely manner;

ii. Truth of Warranties. All warranties of Purchaser set
forth in this Agreement shall be true when made and as of the Closing;

iii. Substantial Compliance. Purchaser shall have
substantially and materially complied with all provisions of this
Agreement;

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<PAGE> 14

If the foregoing contingencies shall not have been satisfied on or before the
Closing, or such other later date as the parties may in writing agree, Seller
may terminate this Agreement by written notice to Purchaser.

b. Conditions Precedent to Purchaser's Obligations.

i. Deliveries. All deliveries by Seller as provided in
Section 4.a of this Agreement shall have been made in a substantially
complete and timely manner;

ii. Percentage of Shares Delivered. Seller shall deliver to
Purchaser at Closing certificates aggregating not less than one
hundred percent (100%) of the voting common stock of the Corporation;

iii. Truth of Warranties. All warranties of Seller set forth
in this Agreement shall, in all material respects, be true when made
and as of the Closing;

iv. No Material Adverse Change. Prior to the Closing Date,
there shall be no material adverse change in the assets or
liabilities, the business or condition, financial or otherwise, or the
results of operations of the Corporation, whether as a result of any
legislative or regulatory change, revocation or any license or
rights to do business, fire, explosion, accident, casualty, labor
trouble, flood, drought, riot, storm, condemnation, or act of God or
other public force or otherwise.

v. Consents and Other Approvals. All material consents and
other approvals, if any, necessary to permit the consummation of the
transactions contemplated by this Agreement shall have been received.

vi. Substantial Compliance. Seller shall have substantially
and materially complied with all provisions of this Agreement.

If the foregoing contingencies shall not have been satisfied on or before the
Closing, or such other later date as the parties may in writing agree,
Purchaser may terminate this Agreement by written notice to Seller.

c. Abandonment. Notwithstanding any of the other provisions of
this Agreement, this Agreement may be canceled and abandoned at any time prior
to the Closing by the mutual written agreement of the parties.

14
<PAGE> 15

assurances as may be reasonably required by the other party hereto or by any
regulatory authority having jurisdiction in order to fully carry out and to
effectuate the transactions contemplated by this Agreement. The parties agree
that they will cooperate reasonably with each other in all matters required for
the reasonable consummation of such transactions.

R-4. RESOLUTION OF DISPUTES. All disputes regarding to this Agreement and the
interpretation thereof and the performance of the parties hereunder shall be
resolved by mediation and/or arbitration according to the provisions of this
Section R-5.

a. Initiation. A party wishing to initiate the dispute
resolution procedures of this Section, shall send to the other parties to this
Agreement a written demand setting forth with particularly the dispute giving
rise to the demand. If the parties do not agree unanimously upon the
resolution of such dispute within thirty (30) days after the sending of such
notice, the matter may be referred by any party to the American Arbitration
Association or other professional dispute resolution organization (the
"Arbitrator") for resolution.

b. Procedure. All disputes not resolved pursuant to subsection
R-4.a above shall be settled utilizing the procedures of the Arbitrator in
Tampa, Florida.

i. Mediation. All disputes shall be first subject to
non-binding mediation through the mediation service of the Arbitrator.
"Mediation" means to engage in good faith discussions, aimed at
resolving the dispute with a neutral intermediary (the "Mediator") and
the other party or parties to the dispute. The mediation shall last
no longer than one (1) day. The Mediator will have no authority to
impose a decision, but only to assist the parties in reaching
agreement. All statements made and information provided in the
mediation shall be confidential and privileged from discovery as
settlement discussions. Mediation shall begin within fourteen (14)
days of receipt by all parties and the Mediator of the request for
mediation.

If the parties shall not accept the resolution suggested by the
Mediator (the "Mediation Award"), any party may, within ten (10) days after the
mediation hearing, initiate arbitration according to paragraph R-4bii below.
No procedure to arbitrate the dispute may be commenced or prosecuted by any
party who has not first participated, or offered in good faith to participate,
in mediation.

ii. Arbitration. Except as specifically set forth in
this Agreement, all disputes shall be decided pursuant to the rules of
the Arbitrator governing commercial arbitrations. The arbitrator(s)
shall hear the evidence and render their award within ninety (90) days
after they have been selected, unless the parties shall unanimously
extend such time in writing. The award (a) shall be in writing; (b)
shall be set forth with specificity the reasons supporting decision,
including findings of fact and conclusions of law in support of the
decision; (c) may order a party to undertake affirmative actions; and
(d) shall allocate the costs of the arbitration m a reasonable manner.
If either party shall fail or refuse to appear or to abide by any
order of the arbitrator(s), the arbitrator(s) may base their decision
on

15
<PAGE> 16

the evidence presented by the other party. A decision of the
arbitrator(s), once final, shall not be subject to being opened except
by unanimous agreement of the parties, or a provided by law.

c. Discovery. The arbitrator(s) may, upon the written request of
either party upon good cause shown, allow such discovery as the arbitrator(s)
deem necessary, including discovery by deposition or other appropriate method.

d. Interest. Interest will accrue on any award at the legal rate
for judgements from the date of the filing of the demand for arbitration until
payment in full.

e. Costs. The costs of proceeding pursuant to paragraphs R-4.a
and R-4-b-i shall be divided between the parties as determined by the
arbitrator(s), and each party shall bear such party's legal fees.

f. Enforcement. The Courts of the State of Florida and the
federal courts within such State shall have jurisdiction with respect to the
enforcement of any arbitral award and all other matters relating to any
arbitration hereunder and judgment of such court shall be entered upon any such
award. The parties submit themselves to the jurisdiction of the courts within
such State for all purposes related to arbitrations arising under this Article
and agree to service of process by certified mail to the addresses listed in
the notices provision.

R-5. MISCELLANEOUS.

a. Waiver. Any term or provision of this Agreement may be waived
in writing at any time by the party entitled to the benefit thereof. Any
failure to enforce any provision hereof shall not constitute a waiver of such
provision or of any subsequent failure to perform any obligation hereunder.

b. Captions. Descriptive headings are for convenience only and
shall not control or affect the meaning or construction of any provision of
this Agreement.

c. Purchaser's Review. The review by Purchaser of the records of
the Corporation shall not relieve Seller of any duty, obligation, ability,
warranty or representation set forth in this Agreement. Purchaser shall give
prompt notice to Seller of any claim for breach of any representation or
warranty of Seller contained in this Agreement or in any Schedule or Exhibit
hereto. In such event, either party shall have the right to terminate this
Agreement without cost or liability by written notice to the other sent within
ten (10) days of the sending of Purchaser's such notice. No such termination,
however, shall abrogate the duty of confidentiality placed upon the parties by
the terms of this Agreement.

d. Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.

16
<PAGE> 17

e. Entire Agreement. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof, and may be
altered or amended only by written instrument executed by the party sought to
be bound. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter. Any provision of this
Agreement can be waived, amended, supplemented or modified by agreement of the
parties.

f. Severability. In case any provision in this Agreement shall
be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.

g. No Assignment. Neither this Agreement nor any rights
hereunder may be assigned either party without the prior written consent of the
other.

h. Jurisdiction. Subject to the provisions of Section R-4,
Seller agrees irrevocably that, subject to Purchaser's sole and absolute
election, all actions to enforce this Agreement or other actions, suits or
other proceedings arising out or in respect of this Assignment ("Actions")
shall be brought in a court of competent jurisdiction sitting in Tampa,
Florida. Seller irrevocably consents to the jurisdiction of such courts.
Seller further (a) agrees that in any such Action, service of process may be in
the same manner as notices are delivered hereunder and that Seller consent to
and shall accept service made in such manner and (b) irrevocably waives any
right Seller or Seller's Shareholders may have to transfer or change the venue
of, or to claim that any such Action has been brought in an inconvenient forum.

j. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of Florida.

k. Representations made on the Knowledge of a Party. Where any
representation or warranty contained in this Agreement is expressly qualified
by reference to the knowledge, information and belief of the party or
individual making such statement, such party or individual in making the
statement confirms that he, she or it has made reasonably diligent inquiry as
to the matters that are the subject of such representations and warranties.

l. Joint and Several Obligations. The warranties,
representations, covenants and agreements of the individual Sellers contained
in this Agreement are joint and several.

m. Expenses. Each party shall pay all of such party's own
expenses relating to the transactions contemplated by this Agreement,
including, without limitation the fees and expenses of their respective counsel
and financial advisers.

17
<PAGE> 18

EXHIBIT A

PROMISSORY NOTE

$1,000,000 Fairfield, Connecticut
June 23, 1997

FOR VALUE RECEIVED, JLM MARKETING, INC., promises to pay to the order
of JOHN L. MACDONALD, at his principal place of business, or at such other
place as the holder hereof may specify from time to time, the principal sum of
ONE MILLION ($1,000,000) dollars, together with any accrued but unpaid interest
then due, on June 1, 2002. Interest on the unpaid balance shall be payable
quarterly at the rate of ten percent (10%) per annum, commencing June 1, 1997.

All payments on this Note shall be applied first to accrued but unpaid
interest and, thereafter, to unpaid principal. JLM Marketing, Inc. has the
right to make early principal payments without penalty.

Payment of principal and interest on this Note shall be made in such
coin and currency of the United States of America as at the time of payment is
legal tender for the payment of public and private debts and shall be free and
clear of, and paid without deduction for, any and all present and future taxes,
levies, deductions, charges, set-offs, withholdings or any other amount.

The holder hereof may, without notice and without releasing the
liability of any party hereto, grant extensions or renewals hereof from time to
time and for any terms. The holder hereof shall not be liable for or
prejudiced by failure to collect or for the lack of diligence in bringing suit
on this Note or any renewal or extension hereof.

The provisions of this Note are to be governed by an construed in
accordance with the laws of the State of Florida without regard to the
principles of conflicts of laws.

The undersigned and all endorsers hereof, jointly and severally, waive
presentment, notice of dishonor, notice of protest, and all other notices and
demands, other than demand for payment, in connection with the delivery,
acceptance, performance, default, or endorsement of this Note.

Witness JLM MARKETING

By: By:
---------------------------- ----------------------------
Ted Lelek, Vice President

<PAGE> 19
EXHIBIT A

PROMISSORY NOTE

$100,000 Tampa, Florida
June 1, 1997

FOR VALUE RECEIVED, JLM Marketing, Inc., promises to pay to the order of
GENE HARMEYER, at his principal place of business or at such other place as the
holder hereof may specify from time to time, in installments as herein set
forth, the principal sum of ONE HUNDRED THOUSAND ($100,000) dollars, together
with interest on the outstanding principal amount from the date hereof,,
calculated at the "Prime Rate" of interest as such term is described in the Wall
Street Journal, from time to time. In the event such rate is not contained in
the said Wall Street Journal, then the Prime Rate shall mean the rate charged by
Citibank, from time to time. The principal shall be payable in three equal
consecutive annual installments of THIRTY THREE THOUSAND THREE HUNDRED THIRTY
THREE and one third ($33,333.33) dollars commencing June 1, 1998.

All payments on this Note shall be applied first to accrued but unpaid
interest and, thereafter, to unpaid principal. The

Payment of principal and interest on this Note shall be made in such coin
and currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts and shall be free and clear
of, and paid without deduction for, any and all present and future taxes,
levies, deductions, charges, set-offs, withholdings or any other amount.

The holder hereof may, without notice and without releasing the liability
of any party hereto, grant extensions or renewals hereof from time to time and
for any terms. The holder hereof shall not be liable for any prejudiced by
failure to collect or for lack of diligence in bringing suit on this Note or any
renewal or extension hereof.

The provisions of this Note are to be governed by and construed in
accordance with the laws of the State of Florida without regard to the
principles of conflicts of laws.

The undersigned and all endorsers hereof, jointly and severally, waive
presentment, notice of dishonor, notice of protest, and protest, and all other
notices and demands, other than demand for payment, in connection with the
delivery, acceptance, performance, default, or endorsement of this Note.

<PAGE> 20

Attest: JLM MARKETING

By: /s/ Michael Molina By: /s/ Frank Musto
-------------------------- -----------------------
Michael Molina, Secretary Frank Musto, Vice President

<PAGE> 1
EXHIBIT 10.32

AGREEMENT FOR SALE AND PURCHASE OF COMMON STOCK

John L. Macdonald (the "Seller"), being the owners of all of the issued and
outstanding capital stock of Phoenix Tank Car Corp., a corporation organized
and existing under the laws of the State of Connecticut with an office at c/o
Mezan, Stolzberg & Schwartzman, P.C. 460 Park Avenue, New York, NY 10022 (the
"Corporation") and JLM Marketing, Inc., a corporation organized under the laws
of Delaware, with principal offices at 8675 Hidden River Parkway, Tampa,
Florida 33637 ("Purchaser") hereby agree as follows concerning the sale and
purchase of all of the issued and outstanding common shares of the Corporation
effective as of June 1, 1997.

2. RECITALS.

3. SALE AND PURCHASE OF SHARES.

4. PURCHASE PRICE AND PAYMENT OF PURCHASE PRICE.

a. Purchase Price. The Purchase Price for the Shares shall be
Five Hundred Thousand ($500,000.00) dollars.

b. Payment of the Purchase Price. The Purchase Price shall be
paid at the Closing as follows:

(1) $250,000 in cash in immediately available funds
payable to Seller.

(2) $250,000 by a negotiable promissory note which shall
bear interest at ten (10%) percent per annum,
substantially in the form of Exhibit A, which shall
be delivered to John L. Macdonald.
<PAGE> 2

5. CLOSING.

The Closing shall take place on the day on June 2, 1997 at the offices
of Seller's attorneys, Mezan, Stolzberg & Schwartzman, P.C., 460 Park Avenue,
New York, NY. (the "Closing" or the "Closing Date"). Prior to the Closing the
parties shall make the following deliveries, in escrow to Maxwell Stolzberg:

a. Deliveries by Seller.

ii. Resignations. Resignations, effective as of the Closing
Date, of the Officers and Directors of the Corporation set forth in EXHIBIT B
attached hereto and made a part hereof.

iv. Articles of Incorporation; Bylaws, etc. Copies of:

(1) The Articles of Incorporation of the Corporation
and all amendments thereto, certified by the Secretary of State of the State of
Connecticut.

(2) The Bylaws of the Corporation, certified by its
Secretary.

(3) A certificate from the Secretary of State of
the State of Connecticut to the effect that the Corporation is in good standing
or subsisting in such jurisdiction.

(4) A certificate as to the tax status of the
Corporation from the appropriate official in the State of Connecticut and each
state in which the Corporation is qualified to do business.

v. Consents and Authorizations. Copies of all consents
and authorizations to the transactions set forth in this Agreement, if any,
required to be obtained by Seller.

2
<PAGE> 3

vi. Other Documents. Such other documents and instruments as
are reasonably necessary to effectuate the transactions provided for in this
Agreement.

b. Deliveries by Purchaser.

i. The Purchase Price. The Purchase Price as provided in
Section 3 of this Agreement by check in the amount of $250,000 drawn on a state
or national bank the accounts of which are insured by the FDIC and a note in
the amount of $750,000 substantially in the form of Exhibit A payable to the
order of John L. Macdonald.

iii. Other Documents. Such other documents and instruments
as, in the opinion of counsel for Seller, are reasonably necessary to
effectuate the transactions provided for in this Agreement.

6. REPRESENTATIONS AND WARRANTIES OF SELLER.

Seller represents and warrants to Purchaser on the date hereof and on
the Closing as follows:

a. Schedules. Attached hereto are the following Schedules, each of
which is complete and accurate in all material respects.

ii. Other Property. A list and description of all property,
real or personal, owned by the Corporation of a value equal to or greater than
$10,000.00. (Schedule i)

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<PAGE> 4

iii. Liens. A complete and accurate list of all material
liens, encumbrances, easements, security interests and other similar interests
in or on any material asset of the Corporation. (Schedule ii)

iv. Operating Licenses. A complete and accurate list of all
operating licenses required for the operation of the business of the
Corporation. (Schedule iii)

ix. Articles of Incorporation and Bylaws. Copies of the
current Articles of Incorporation and Bylaws of the Corporation, together with
all amendments thereto to the date hereof. (Schedule viii)

x. Officers and Directors. A list of all officers and
directors of the Corporation. (Schedule ix)

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<PAGE> 5

1995, or who during the year ending December 31, 1996 is presently scheduled to
receive from the Corporation aggregate compensation in excess of $25,000.00 if
such employee remained employed for the full year 1996. (Schedule x)

xv. Banks. A list showing:

(1) The name of each bank in which the Corporation
has an account or safe deposit box;

(2) The names of all persons authorized to sign
checks thereon or make withdrawals therefrom; and

(3) The names and addresses of all persons holding
powers of attorney from the Corporation and a copy or statement of such power
of attorney. (Schedule xiv)

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<PAGE> 6

reconciliation of such return(s) to the Financial Statement of the Company for
such fiscal year. (Schedule xvi)

b. Organization, Qualification, Power and Standing. The
Corporation is a corporation duly organized, validly existing and in good
standing under the laws of Connecticut with all requisite corporate power to
own or lease its property and to carry on its business as now being conducted.
The Corporation is duly qualified and in good standing to do business in every
jurisdiction in which the Corporation believes that such qualification is
necessary to conduct its business as such business is now being conducted,
except where a failure to so qualify would not have a material adverse effect
on the business or properties thereof.

d. Ownership, Power to Sell Shares. Seller is the owner of the Shares
free and clear of all encumbrances, liens, security interests, voting
restrictions, agreements or similar arrangements, or other equitable claims or
interests whatsoever, and has the full legal right, power and authority to
enter into this Agreement and to sell, assign, transfer and convey the Shares
to Purchaser as provided herein. Upon transfer and delivery to Purchaser of
certificates evidencing the Shares pursuant to this Agreement duly endorsed for
transfer, Purchaser will acquire full right, title and interest in and to such
Shares, free of any claims, security interests, encumbrances, security
interests, liens or rights in any other party.

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<PAGE> 7

h. Additional Representations and Warranties. Seller makes the
additional representations and warranties set forth in Rider A attached hereto,
as if they were set forth in full in this Section.

j. Truth at Closing. In addition to being true as covenants,
warranties, and representations as of the date of this Agreement, all
covenants, warranties, and representations of Seller set forth in this
Agreement or any Schedule or Exhibit hereto shall be true and correct as of the
Closing and shall be of the same force and effect as though made on said date
and shall be deemed to have been made at the Closing.

7. REPRESENTATIONS AND WARRANTIES OF PURCHASER.

Purchaser represents, warrants and covenants to and with Seller on the
date hereof and on the Closing as follows:

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<PAGE> 8

e. No Financing. The transactions contemplated by this Agreement are
not subject to any financing contingency on the part of the Purchaser.

g. Filings. There are no filings required for this transaction under
the Hart-Scott-Rodino statute or similar acts.

8. BROKERS, ETC.

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<PAGE> 9

and defend the other party from and against all claims or finder's fees,
broker's commissions or other similar compensation made by any such broker or
finder.

9. DISCLOSURE; CONFIDENTIALITY.

10. MISCELLANEOUS.

Seller: John L. Macdonald
921 Anchorage Road
Tampa, FL 33602

Copy to: Mezan, Stolzberg & Schwartzman P.C.
460 Park Avenue
New York NY 10022

Attn: Maxwell Stolzberg, Esq.

Purchaser: JLM Marketing, Inc.
8675 Hidden River Parkway
Tampa, FL 33637

Attn: Michael Molina

9
<PAGE> 10

DATED: , 1997
----------

SELLER

----------------------------------------
John L. Macdonald

PURCHASER
JLM Marketing, Inc.

By By
---------------------------- --------------------------------------
Michael Molina Its:Secy Ted Lelek, Vice President

10
<PAGE> 11

Rider A

Additional Provisions

This Rider A is attached to and made a part of that certain Agreement
for Sale and Purchase of Common Stock dated as of June 1, 1997 between John L.
Macdonald and JLM Marketing, Inc. relating to the sale and purchase of one
hundred (100) shares of the issued and outstanding common stock of Aurora
Chemicals, Inc. and contains additional provisions of such Agreement. Such
provisions are a part of the Agreement as if they had been set forth in full in
the body thereof.

R-1. ACTIONS PENDING CLOSING. Subsequent to the execution of this Agreement
and prior to Closing, Seller agrees as follows:

i. Amend its Articles of Incorporation or Bylaws or cause
to be amended; or

ii. Issue or contract to issue any share of capital stock or
security exchangeable for or convertible into capital stock of the
Corporation;

iii. (a) Enter into or perform any agreement for the merger,
consolidation, or reorganization of the Corporation or any other
transaction that will effect any change in the structure or control of
the Corporation or (b) enter into or assume any contract or obligation
except for contracts or obligations in the ordinary course of
business; (c) guarantee any obligation; or (d) cancel or forgive any
indebtedness owed to the Corporation or waive any claim that the
Corporation may possess.

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<PAGE> 12

representatives of Purchaser to report material operational matters and to
report the general status of ongoing operations. The foregoing review shall
not affect the representations and warranties made by Seller hereunder or the
remedies of the Purchaser for breaches of those representations and warranties,
except that Purchaser shall give prompt notice to Seller of any claim for
breach of any such representation or warranty or for indemnification. In such
event, either party shall have the right to terminate this Agreement by written
notice to the other sent within ten (10) days of the sending of Purchaser's
such notice, without cost or liability. No such termination, however, shall
abrogate the duty of confidentiality placed upon the parties by the terms of
this Agreement.

R-2. CONDITIONS PRECEDENT TO CLOSING. The obligations of the parties pursuant
to this Agreement are specifically contingent upon satisfaction of all of the
following:

a. Conditions Precedent to Seller's Obligations.

i. Deliveries. All deliveries by Purchaser pursuant to
Section 4.b of this Agreement shall have been made in a complete and
timely manner;

ii. Truth of Warranties. All warranties of Purchaser set
forth in this Agreement shall be true when made and as of the Closing;

iii. Substantial Compliance. Purchaser shall have
substantially and materially complied with all provisions of this
Agreement;

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<PAGE> 13

If the foregoing contingencies shall not have been satisfied on or
before the Closing, or such other later date as the parties may in
writing agree, Seller may terminate this Agreement by written notice
to Purchaser.

b. Conditions Precedent to Purchaser's Obligations.

i. Deliveries. All deliveries by Seller as provided in
Section 4.a of this Agreement shall have been made in a substantially
complete and timely manner;

ii. Percentage of Shares Delivered. Seller shall deliver to
Purchaser at Closing certificates aggregating not less than one
hundred percent (100%) of the voting common stock of the Corporation;

iii. Truth of Warranties. All warranties of Seller set forth
in this Agreement shall, in all material respects, be true when made
and as of the Closing;

iv. No Material Adverse Change. Prior to the Closing Date,
there shall be no material adverse change in the assets or
liabilities, the business or condition, financial or otherwise, or the
results of operations of the Corporation, whether as a result of any
legislative or regulatory change, revocation or any license or rights
to do business, fire, explosion, accident, casualty, labor trouble,
flood, drought, riot, storm, condemnation, or act of God or other
public force or otherwise.

v. Consents and Other Approvals. All material consents and
other approvals, if any, necessary to permit the consummation of the
transactions contemplated by this Agreement shall have been received.

vi. Substantial Compliance. Seller shall have substantially
and materially complied with all provisions of this Agreement.

R3. ADDITIONAL DOCUMENTS; COOPERATION. Each party agrees that such party
will at all times do, execute, acknowledge and deliver or will cause to be
done, executed, acknowledged and delivered, all such other acts, deeds,
assignments, transfers, advances and assurances as may be reasonably required
by the other party hereto or by any regulatory authority having jurisdiction in

13
<PAGE> 14

order to fully carry out and to effectuate the transactions
contemplated by this Agreement. The parties agree that they will
cooperate reasonably with each other in all matters required for the
reasonable consummation of such transactions.

R-4. RESOLUTION OF DISPUTES. All disputes regarding to this Agreement and
the interpretation thereof and the performance of the parties hereunder shall
be resolved by mediation and/or arbitration according to the provisions of this
Section R-5.

b. Procedure. All disputes not resolved pursuant to subsection
R-4.a above shall be settled utilizing the procedures of the Arbitrator in
Tampa, Florida.

14
<PAGE> 15

presented by the other party. A decision of the arbitrator(s), once
final, shall not be subject to being opened except by unanimous
agreement of the parties, or a provided by law.

d. Interest. Interest will accrue on any award at the legal rate
for judgements from the date of the filing of the demand for arbitration until
payment in full.

e. Costs. The costs of proceeding pursuant to paragraphs R-4.a
and R-4-b-i shall be divided between the parties as determined by the
arbitrator(s), and each party shall bear such party's legal fees.

R-5. MISCELLANEOUS.

b. Captions. Descriptive headings are for convenience only and
shall not control or affect the meaning or construction of any provision of
this Agreement.

d. Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.

15
<PAGE> 16

g. No Assignment. Neither this Agreement nor any rights
hereunder may be assigned either party without the prior written consent of the
other.

j. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of Florida.

l. Joint and Several Obligations. The warranties,
representations, covenants and agreements of the individual Sellers contained
in this Agreement are joint and several.

16
<PAGE> 17

EXHIBIT A

PROMISSORY NOTE

$250,000 Fairfield, Ct.
June 23, 1997

FOR VALUE RECEIVED, JLM MARKETING, INC., promises to pay to the order
of JOHN L. MACDONALD, at its principal place of business or at such other place
as the holder hereof may specify from time to time, the principal sum of TWO
HUNDRED FIFTY THOUSAND dollars ($250,000), together with interest then due, on
June 1, 2002. Interest on the unpaid balance shall be payable quarterly at the
rate of ten percent (10%) per annum.

The holder hereof may, without notice and without releasing the
liability of any party hereto, grant extensions or renewals hereof from time to
time and for any terms. The holder hereof shall not be liable for or
prejudiced by failure to collect or for lack of diligence in bringing suit on
this Note or any renewal or extension hereof.

The provisions of this Note are to be governed by and construed in
accordance with the laws of the State of Florida without regard to the
principles of conflicts of laws.

JLM MARKETING, INC.

Attest:
By
--------------------------------------
Ted Lelek, Vice President
- ----------------------------
Michael Molina, Secy

<PAGE> 1

EXHIBIT 10.33

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered
into EFFECTIVE as of the day of ___________, 1997, by and between
________________________ (the "Indemnitee"), and JLM INDUSTRIES, INC., a
Delaware corporation (the "Corporation").

WITNESSETH:

WHEREAS, it is essential to the Corporation to retain and attract as
Directors, officers and key employees the most capable persons available; and

WHEREAS, the substantial increase in corporate litigation subjects
directors and officers to expensive litigation risks at the same time that the
availability of directors' and officers' liability insurance is severely
limited; and

WHEREAS, in addition, the indemnification provisions of the Delaware
General Corporation Law (the "DGCL," as further defined below) expressly provide
that such provisions are non-exclusive; and

WHEREAS, the Indemnitee does not regard the protection available under
the Certificate of Incorporation and Bylaws of the Corporation and insurance, if
any, as adequate in the present circumstances, and considers it necessary to
condition the Indemnitee's agreement to serve as a Director and/or officer of
the Corporation to have appropriate contractual rights to indemnification from
the Corporation, and the Corporation desires the Indemnitee to serve in such
capacity or capacities and to have such rights as set forth in this Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained in this Agreement, it is hereby agreed as
follows:

1. DEFINITIONS.

For the purposes of this Agreement, the terms below shall have the
indicated meanings except where the context in which such a term is used in this
Agreement clearly indicates otherwise:

a. Affiliate means, as to any Person (the "first Person"), any
other Person that, either directly or indirectly, controls, is
controlled by or is under common control with the first Person.

b. Agreement of Indemnity means the agreement provided for by
Section 3(e)(i) of this Agreement.

c. Associate of a Person means a director, officer, employee,
agent, consultant, independent contractor, stockholder or partner of
such Person.

<PAGE> 2

INDEMNIFICATION AGREEMENT
PAGE 2
- --------------------------------------------------------------------------------

d. Board means the Board of Directors of the Corporation.

e. Evaluation Date means, as to any Indemnification Notice, the date
thirty (30) calendar days after the date of receipt by the Board of
such Indemnification Notice.

f. Expense means any cost or expense (other than a Liability),
including but not limited to Legal Fees, and including interest on any
of the foregoing, reasonably paid or required to be paid by the
Indemnitee on account of or in connection with any Proceeding.

g. Expense Advance Request means the request provided for by Section
3(d)(ii) of this Agreement.

h. DGCL means the Delaware General Corporation Law, and any successor
statute.

i. Indemnification Notice means the notice provided for by Section 3(a)
of this Agreement.

j. Legal Fees means the fees and disbursements of legal counsel, legal
assistants, experts, accountants, consultants and investigators, before
and at trial, in appellate or bankruptcy proceedings and otherwise.

k. Liability means any amount (other than an Expense), including any
assessment, fine, penalty, excise or other tax, and including interest
on any of the foregoing, paid or required to be paid by the Indemnitee
on account of or in connection with any Proceeding.

l. Nonindemnifiable Conduct means any act or omission to act of the
Indemnitee material to a Proceeding as to which indemnification under
this Agreement is sought, which act or omission is determined to
involve:

i. a violation of criminal law, unless the Indemnitee had
reasonable cause to believe such conduct was lawful or had no
reasonable cause to believe such conduct was unlawful;

ii. a transaction from which the Indemnitee derived an improper
personal benefit;

iii. willful misconduct or a conscious disregard for the best
interests of the Corporation (when indemnification is sought in a
Proceeding by or in the right of the Corporation to procure a
judgment in favor of the Corporation or when indemnification is
sought in a Proceeding by or in the right of a stockholder); or

iv. conduct as to which then applicable law prohibits
indemnification.

<PAGE> 3

INDEMNIFICATION AGREEMENT
PAGE 3
- --------------------------------------------------------------------------------

m. Person means any natural person or individual, or any artificial
person, including any corporation, association, unincorporated
organization, partnership, joint venture, firm, company, business,
trust, business trust, limited liability company, government, public
body or authority, governmental agency or department, and any other
entity.

n. Proceeding means any threatened, pending or completed claim, demand,
inquiry, investigation, action, suit or proceeding, whether formal or
informal, or whether brought by or in the right of the Corporation,
whether brought by a governmental body, agency or representative or by
any other Person, and whether of a civil, criminal, administrative or
investigative nature, and includes any Third Party Proceeding.

o. Third Party Proceeding means any Proceeding against the Indemnitee
by, or any Proceeding by the Indemnitee against, any third party.

2. GRANT OF INDEMNITY.

The Corporation shall indemnify and hold harmless the Indemnitee in respect of:

a. any and all Liabilities that may be incurred or suffered by the
Indemnitee as a result of or arising out of or in connection with
prosecuting, defending, settling or investigating any Proceeding in
which the Indemnitee may be or may have been involved as a party or
otherwise, arising out of the fact that the Indemnitee is or was an
Associate of the Corporation or any of its Affiliates, or served as an
Associate in or for any Person at the request of the Corporation
(including without limitation service as a trustee or in any fiduciary
or similar capacity for or in connection with any employee benefit plan
maintained by the Corporation or for the benefit of any of the
employees of the Corporation or any of its Affiliates, or service on
any trade association, civic, religious, educational or charitable
boards or committees);

b. any and all Liabilities that may be incurred or suffered by the
Indemnitee as a result of or arising out of or in connection with any
attempt (regardless of its success) by any Person to charge or cause
the Indemnitee to be charged with wrongdoing or with financial
responsibility for damages arising out of or incurred in connection
with the matters indemnified against in this Agreement; and

c. any and all Expenses that may be incurred or suffered by the
Indemnitee as a result of or arising out of or in connection with any
matter referred to in the preceding two paragraphs.

<PAGE> 4

INDEMNIFICATION AGREEMENT
PAGE 4
- --------------------------------------------------------------------------------

3. CLAIMS FOR INDEMNIFICATION; PROCEDURES

a. Submission of Claims. Whenever any Proceeding shall occur as to
which indemnification under this Agreement may be sought by the
Indemnitee, the Indemnitee shall give the Corporation written notice
thereof as promptly as reasonably practicable after the Indemnitee has
actual knowledge of such Proceeding (an "Indemnification Notice"). The
Indemnification Notice shall specify in reasonable detail the facts
known to the Indemnitee giving rise to such Proceeding, the positions
and allegations of the parties to such Proceeding and the factual bases
therefor, and the amount or an estimate of the amount of Liabilities
and Expenses reasonably expected to arise therefrom. A delay by the
Indemnitee in providing such notice shall not relieve the Corporation
from its obligations under this Agreement unless and only to the extent
that the Corporation is materially and adversely affected by the delay.
If the Indemnitee desires to personally retain the services of an
attorney in connection with any Proceeding, the Indemnitee shall notify
the Corporation of such desire in Indemnification Notice relating
thereto, and such notice shall identify the counsel to be retained.

b. Presumption of Right to Indemnification. Upon submission of an
Indemnification Notice to the Corporation, the Board shall review such
Notice and endeavor to determine whether the Indemnitee is entitled to
indemnification under this Agreement with respect to the matters
described therein. As of the Evaluation Date, unless the Board has
reasonably determined that the Indemnitee is not entitled to
indemnification under this Agreement with respect to the matters
described in such Indemnification Notice, there shall be created a
presumption that the Indemnitee is entitled to such indemnification.
Such presumption shall continue, and indemnification and payment shall
be provided under this Agreement, unless and such time as the Board
shall reasonably determine that the Indemnitee is not entitled to
indemnification under this Agreement. This paragraph is procedural only
and shall not affect the right of the Indemnitee to indemnification
under this Agreement. Any determination by the Board that the
Indemnitee is not entitled to indemnification under this Agreement and
any failure to make any payments requested in an Indemnification Notice
or otherwise shall be subject to judicial review.

c. Limitation on Adverse Determinations by the Board. Subject to
applicable law, no determination by the Board that the Indemnitee is
not entitled to indemnification or payment under this Agreement shall
be given effect under this Agreement unless (i) such determination is
based upon clear and convincing evidence, (ii) such determination is
made by a vote of a majority of the Corporation's Directors at a
meeting at which a quorum is present, and (iii) the Indemnitee is given
written notice of such meeting at least ten days in advance of such
meeting and given a meaningful opportunity to present at such meeting
information in support of the claim for indemnification or payment.

<PAGE> 5

INDEMNIFICATION AGREEMENT
PAGE 5
- --------------------------------------------------------------------------------

d. Expenses.

i. With respect to any Proceeding as to which the Indemnitee
is entitled (or presumed entitled) to indemnification under
this Agreement, Expenses incurred or required to be incurred
by the Indemnitee in connection with such Proceeding, but
prior to the final disposition of such Proceeding, shall be
paid or caused to be paid by the Corporation to or on behalf
of the Indemnitee notwithstanding that there has been no final
disposition of such Proceeding, to the extent provided in the
following paragraph.

ii. For purposes of determining whether to authorize
advancement of Expenses pursuant to the preceding paragraph,
the Indemnitee shall from time to time submit to the Board a
statement requesting advancement of Expenses (an "Expense
Advance Request." Each Expense Advance Request shall set forth
(i) in reasonable detail, all Expenses already incurred or
required to be incurred by the Indemnitee and the reason
therefor, and (ii) an undertaking by the Indemnitee, in form
and substance reasonably satisfactory to the Corporation, to
repay all the Expenses set forth therein if it shall
ultimately be determined that the Indemnitee is not entitled
to be indemnified with respect to such Proceeding by the
Corporation under this Agreement or otherwise. Upon receipt of
an Expense Advance Request satisfying the foregoing
requirements, as to each Expense set forth therein, unless the
Board reasonably determines that the Indemnitee is not
entitled to payment of such Expense, the Corporation shall,
within 10 business days thereafter (or, if later as to any
Expense yet to be incurred by the Indemnitee, on or before the
date three business days prior to the date such Expense is
required to be paid by the Indemnitee), pay or cause to be
paid by the Corporation the amount of such Expense to or on
behalf of the Indemnitee. No security shall be required in
connection with any Expense Advance Request, and the ability
or inability of the Indemnitee to make repayment shall not be
considered in any evaluation of an Expense Advance Request.

e. Rights to Defend or Settle; Third Party Proceedings, etc.

i. If the Corporation at any time provides the Indemnitee
with an agreement in writing, in form and substance reasonably
satisfactory to the Indemnitee and the Indemnitee's counsel,
agreeing to indemnify, defend or prosecute and hold the
Indemnitee harmless from all Liabilities and Expenses arising
from any Third Party Proceeding (an "Agreement of Indemnity"),
and demonstrating to the reasonable satisfaction of the
Indemnitee the Corporation's financial wherewithal to
accomplish such indemnification, the Corporation may
thereafter at its own expense undertake full responsibility
for and control of the defense or prosecution of such Third
Party Proceeding. The Corporation may contest or settle any
such Third Party Proceeding for money damages on such terms
and conditions as it deems appropriate but shall be

<PAGE> 6

INDEMNIFICATION AGREEMENT
PAGE 6
- --------------------------------------------------------------------------------

obligated to consult in good faith with the Indemnitee and not
to contest or settle any Third Party Proceeding involving
injunctive or equitable relief against or affecting the
Indemnitee or the Indemnitee's properties or assets without
the prior written consent of the Indemnitee, such consent not
to be unreasonably withheld. The Indemnitee may participate at
the Indemnitee's own expense and with the Indemnitee's own
counsel in defense or prosecution of a Third Party Proceeding
controlled by the Corporation. Such participation shall not
relieve the Corporation of its obligation to indemnify the
Indemnitee with respect to such Third Party Proceeding under
this Agreement.

ii. If, as of ten (10) business days after the receipt by the
Board of an Indemnification Notice, the Corporation has not
delivered to the Indemnitee a reasonably satisfactory
Agreement of Indemnity and evidence of financial wherewithal
as contemplated by the preceding paragraph, the Indemnitee may
contest or settle the Third Party Proceeding on such terms as
it sees fit but shall not reach a settlement with respect to
the payment of money damages without consulting in good faith
with the Corporation. As to any Third Party Proceeding as to
which the Indemnitee is entitled (or presumed entitled) to
indemnification under this Agreement, unless and until such
time as the Corporation at its own expense undertakes full
responsibility for and control of the defense or prosecution
of such Third Party Proceeding, the Indemnitee shall be
entitled to indemnification under this Agreement with respect
any Expenses of the Indemnitee, including Legal Fees, relating
to such Third Party Proceeding. Notwithstanding the foregoing,
the Corporation may at any time deliver to the Indemnitee a
reasonably satisfactory Agreement of Indemnity and evidence of
financial wherewithal as contemplated by the preceding
paragraph, and thereafter at its own expense undertake full
responsibility for and control of the defense or prosecution
of such Third Party Proceeding.

iii. All Expenses incurred in defending or prosecuting any
Third Party Proceeding shall be paid in accordance with the
procedure set forth in Section 3(d) of this Agreement.

iv. If, by reason of any Third Party Proceeding as to which
the Indemnitee is entitled (or presumed entitled) to
indemnification under this Agreement, a lien, attachment,
garnishment or execution is placed upon any of the property or
assets of the Indemnitee, the Corporation shall promptly
furnish a reasonably satisfactory indemnity bond to obtain the
prompt release of such lien, attachment, garnishment or
execution.

v. The Corporation may participate at its own expense and
with its own counsel in defense or prosecution of any Third
Party Proceeding, but any such participation shall not relieve
the Corporation of its obligations to indemnify the Indemnitee
under

<PAGE> 7

INDEMNIFICATION AGREEMENT
PAGE 7
- --------------------------------------------------------------------------------

this Agreement. Any election by the Corporation to at its own
expense undertake full responsibility for and control of the
defense or prosecution of a Third Party Proceeding shall not
affect the entitlement of the Indemnitee to indemnification
under this Agreement.

vi. The Indemnitee shall cooperate in the defense or
prosecution of any Third Party Proceeding controlled by the
Corporation.

vii. The parties shall cooperate in good faith and use
reasonable efforts to mitigate and minimize any Expense or
Liability.

f. Choice of Counsel. In all matters as to which indemnification
is or may be available to the Indemnitee under this Agreement, the
Indemnitee shall be free to choose and retain counsel of the
Indemnitee's choice, provided that the Indemnitee shall secure the
prior written consent of the Corporation as to such selection, which
consent shall not be unreasonably withheld.

g. Repayment. Notwithstanding anything to the contrary, if the
Corporation has paid or advanced any Liability or Expense under this
Agreement (including pursuant to an Expense Advance Request) to, on
behalf of or for the benefit of the Indemnitee and it is determined by
a court of competent jurisdiction, in a decision which the Indemnitee
does not properly appeal or which decision is affirmed on appeal, that
the Indemnitee's actions or omissions constitute Nonindemnifiable
Conduct or that the Indemnitee otherwise is not or was not entitled to
such payment or advance or that the Indemnitee is required to reimburse
or repay the Corporation for the amount thereof, the Indemnitee shall
and does hereby undertake in such circumstances to reimburse and repay
the Corporation for any and all such amounts paid, which thereupon
shall be deemed and shall be and become the legal, valid and
enforceable debt and obligation of the Indemnitee to the Corporation.

h. Representations and Agreements of the Corporation.

i. Authority. The Corporation represents, covenants and
agrees that it has the corporate power and authority to enter
into this Agreement and to carry out its obligations under
this Agreement. The execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized by
the Board. This Agreement is a valid and binding obligation of
the Corporation and is enforceable against the Corporation in
accordance with its terms.

ii. Noncontestability. The Corporation represents, covenants
and agrees that it will not initiate, and will use its best
efforts to cause each of its Affiliates not to

<PAGE> 8

INDEMNIFICATION AGREEMENT
PAGE 8
- --------------------------------------------------------------------------------

initiate, any action, suit or proceeding challenging the
validity or enforceability of this Agreement.

iii. Good Faith Judgment. The Corporation represents,
covenants and agrees that it will exercise good faith and its
best reasonable judgment in determining the entitlement of the
Indemnitee to indemnification under this Agreement.

4. RELATIONSHIP OF THIS AGREEMENT TO OTHER INDEMNITIES.

a. Nonexclusivity.

i. This Agreement and all rights granted to the Indemnitee
under this Agreement are in addition to and are not deemed to
be exclusive with or of any other rights that may be available
to the Indemnitee under any Certificate of Incorporation,
bylaw, statute, agreement, or otherwise.

ii. The rights, duties and obligations of the Corporation and
the Indemnitee under this Agreement do not limit, diminish or
supersede the rights, duties and obligations of the
Corporation and the Indemnitee with respect to the
indemnification afforded to the Indemnitee under any liability
insurance, the DGCL, or under the Bylaws or the Certificate of
Incorporation of the Corporation. In addition, the
Indemnitee's rights under this Agreement will not be limited
or diminished in any respect by any amendment to the Bylaws or
the Certificate of Incorporation of the Corporation.

b. Availability, Contribution, Etc.

i. The availability or nonavailability of indemnification by
way of insurance policy, Certificate of Incorporation, bylaw,
vote of stockholders, or otherwise from the Corporation to the
Indemnitee shall not affect the right of the Indemnitee to
indemnification under this Agreement, provided that all rights
under this Agreement shall be subject to applicable statutory
provisions in effect from time to time.

ii. Any funds actually received by the Indemnitee by way of
indemnification or payment from any source other than from the
Corporation under this Agreement shall reduce any amount
otherwise payable to the Indemnitee under this Agreement.

iii. If the Indemnitee is entitled under any provision of this
Agreement to indemnification by the Corporation for some
Liabilities or Expenses but not as to others, or for some or a
portion thereof actually incurred by the Indemnitee or amounts
actually paid in settlement by the Indemnitee in the
investigation, defense, appeal or settlement of any Proceeding
for which indemnification is sought under this

<PAGE> 9

INDEMNIFICATION AGREEMENT
PAGE 9
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Agreement but not for the total amount thereof, the
Corporation shall indemnify the Indemnitee for the portion
thereof to which the Indemnitee is entitled.

iv. If for any it is determined by a court of competent
jurisdiction, in a decision which neither party to this
Agreement properly appeals or which decision is affirmed on
appeal, that the indemnity provided under this Agreement is
unavailable, or if for any reason the indemnity under this
Agreement is insufficient to hold the Indemnitee harmless as
provided in this Agreement, then, in any such event, the
Corporation shall contribute to the amounts paid or payable by
the Indemnitee in such proportion as equitably reflects the
relative benefits received by, and fault of, the Indemnitee
and the Corporation and its Affiliates and its and their
respective Associates.

c. Coordination With Insurance. The obligation of the
Corporation under this Agreement is not conditioned in any way on any
attempt, whether or not successful, by the Indemnitee or the
Corporation to collect from an insurer any amount under any insurance
policy.

5. LIMITATIONS.

In no case shall any indemnification or payment be provided or made under this
Agreement to or on behalf of or for the direct or indirect benefit of the
Indemnitee by the Corporation:

a. except as set forth in Section 6(g) of this Agreement, in any
Proceeding brought by or in the name or interest of the Indemnitee
against the Corporation;

b. except as set forth in Section 6(g) of this Agreement, in any
Proceeding brought by the Corporation against the Indemnitee, which
action is initiated at the direction of the Board; or

c. for any Nonindemnifiable Conduct.

6. MISCELLANEOUS.

a. Cooperation. The parties to this Agreement shall execute such
powers of attorney as may be necessary or appropriate to permit
participation of counsel selected by any party hereto and, as may be
reasonably related to any such claim or action, shall provide to the
counsel, accountants and other representatives of each party access
during normal business hours to all properties, personnel, books,
records, contracts, commitments and all other business records of such
other party and will furnish to such other party copies of all such
documents as may be reasonably requested (certified, if requested).

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INDEMNIFICATION AGREEMENT
PAGE 10
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b. Further Assurances. The parties to this Agreement will
execute and deliver, or cause to be executed and delivered, such
additional or further documents, agreements or instruments and shall
cooperate with one another in all respects for the purpose of carrying
out the transactions contemplated by this Agreement.

c. Notices. Any notice, request, demand or other communication
required or permitted to be given or made under this Agreement shall be
in writing and shall be deemed to have been duly given: upon receipt if
personally delivered; upon successful completion of transmission if
transmitted by telecopy, electronic telephone line facsimile
transmission or other similar electronic or digital transmission
method; at the close of business on the next business day after it is
sent, if sent by recognized overnight delivery service with all fees
payable by the sender; or at the close of business on the fifth
business day after it is sent, if mailed, first class mail, postage
prepaid. In each case such notice, request, demand or other
communication shall be sent to:

if to the Indemnitee:

if to the Corporation:

With a copy to:

or to such other address as either party may have specified in writing
to the other using the procedures specified above in this Section 6(c).

d. Governing Law. This Agreement shall be construed pursuant to
and governed by the substantive laws of the State of Delaware (but any
provision of Delaware law shall not apply if the application of such
provision would result in the application of the law of a state or
jurisdiction other than Delaware).

e. Severability. Any provision of this Agreement that is
determined by a court of competent jurisdiction to be prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition,
unenforceability

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INDEMNIFICATION AGREEMENT
PAGE 11
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or non-authorization without invalidating the remaining provisions
hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction. In any such case, such
determination shall not affect any other provision of this Agreement,
and the remaining provisions of this Agreement shall remain in full
force and effect. If any provision or term of this Agreement is
susceptible to two or more constructions or interpretations, one or
more of which would render the provision or term void or unenforceable,
the parties agree that a construction or interpretation which renders
the term or provision valid shall be favored.

f. Specific Enforcement; Presumption.

i. The parties agree and acknowledge that, in the event of a
breach by the Corporation of its obligation promptly to
indemnify the Indemnitee as provided in this Agreement, or
breach of any other material provision of this Agreement,
damages at law will be an insufficient remedy to the
Indemnitee. Accordingly, the parties agree that, in addition
to any other remedies or rights that may be available to the
Indemnitee, the Indemnitee shall also be entitled, upon
application to a court of competent jurisdiction, to obtain
temporary or permanent injunctions to compel specific
performance of the obligations of the Corporation under this
Agreement.

ii. There shall exist in any action to enforce the rights of
the Indemnitee under this Agreement a rebuttable presumption
that the Indemnitee has met the applicable standard(s) of
conduct and is therefore entitled to indemnification pursuant
to this Agreement, and the burden of proving that the relevant
standards have not been met by the Indemnitee shall be on the
Corporation. Neither the failure of the Corporation (including
the Board or independent legal counsel) prior to the
commencement of such action to have made a determination that
indemnification is proper in the circumstances because the
Indemnitee has met the applicable standard of conduct, nor an
actual determination by the Corporation (including the Board
or independent legal counsel) that the Indemnitee has not met
such applicable standard of conduct, shall (X) constitute a
defense to the action, (Y) create a presumption that the
Indemnitee has not met the applicable standard of conduct, or
(Z) otherwise alter the presumption in favor of the Indemnitee
referred to in the preceding sentence.

g. Cost of Enforcement; Interest.

i. If either party to this Agreement engages the services of
an attorney or any other third party or in any way initiates
legal action to enforce the party's rights under this
Agreement, including but not limited to the collection of
monies due, the prevailing party in such action shall be
entitled to recover all Expenses incurred in connection
therewith. Should the Indemnitee prevail, such Expenses shall
be in addition to monies otherwise due the Indemnitee under
this Agreement.

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INDEMNIFICATION AGREEMENT
PAGE 12
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ii. If any amount shall be due or payable under this Agreement
(including under an Expense Advance Request) and shall not be
paid within 30 days from the date as of which the obligation
to make such payment arises, interest shall accrue on such
unpaid amount from the date when due until it is paid in full
at the rate of 2% per annum in excess of the prime rate
published from time to time in The Wall Street Journal in its
"Money Rates" column or any similar or successor column or
feature, or such lower rate as may be required to comply with
applicable law.

h. No Assignment. Any claim, right, title, benefit, remedy or
interest of the Indemnitee in, to or under or arising out of or in
connection with this Agreement is personal and may not be sold,
assigned, transferred, pledged or hypothecated, but the provisions of
this Agreement shall survive the death, disability or incapacity of the
Indemnitee or the termination of the Indemnitee's service as a Director
or officer of the Corporation and shall inure to the benefit of the
Indemnitee's heirs, executors and administrators. This Agreement shall
inure to the benefit of and shall be binding upon the successors in
interest and assigns of the Corporation, including any successor
corporation resulting from a merger, consolidation, recapitalization,
reorganization, sale of all or substantially all of the assets of the
Corporation, or any other transaction resulting in the successor
corporation assuming the liabilities of the Corporation under this
Agreement (by operation of law or otherwise).

i. No Third Party Beneficiaries. This Agreement is not intended
to benefit or entered into for the benefit of any third parties and,
other than as set forth in the preceding paragraph as to heirs,
assignees and successors, nothing in this Agreement, whether express or
implied, is intended or should be construed to confer upon, or to grant
to, any person, except the Corporation and the Indemnitee, any claim,
right, benefit or remedy under or because of this Agreement or any
provision set forth in this Agreement.

j. Construction. As used in this Agreement, (1) the word
"including" is always without limitation, and (2) words in the singular
number include words of the plural number and vice versa.

k. Venue; Process. The parties to this Agreement agree that
jurisdiction and venue in any action brought pursuant to this Agreement
to enforce its terms or otherwise with respect to the relationships
between the parties shall properly lie in and only in the
____________________ of the State of __________ in and for ______
County (the "Selected Court") and the parties agree that jurisdiction
shall not properly lie in any other jurisdiction provided, however, if
jurisdiction does not properly lie with the Selected Court, the parties
agree that jurisdiction and venue shall properly lie in and only in the
United States District Court for the _________ District of _________.
The parties hereby waive any objections which they may now or hereafter
have based on venue and/or forum non conveniens and irrevocably submit
to the jurisdiction of any such court in any legal suit, action or
proceeding arising out of or relating to this Agreement. The parties
further agree that the

<PAGE> 13

INDEMNIFICATION AGREEMENT
PAGE 13
- --------------------------------------------------------------------------------

mailing by certified or registered mail, return receipt requested, of
any process required by any such court shall constitute valid and
lawful service of process against them, without the necessity for
service by any other means provided by statute or rule of court.

l. Waiver and Delay. No waiver or delay in enforcing the terms
of this Agreement or in taking any action with respect to any
breach of this Agreement shall be construed as a waiver of any
subsequent breach. No action taken by the Indemnitee shall constitute
a waiver of the Indemnitee's rights under this Agreement.

m. Modification. This Agreement contains the entire agreement of
the parties, and supersedes any prior written or oral agreement of the
parties, with respect to the subject matter hereof. This Agreement may
be modified only by an instrument in writing signed by both parties
hereto.

n. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original, but all of
which together shall constitute one and the same instrument.

o. Headings. The headings of the various sections in this
Agreement are inserted for the convenience of the parties and shall not
affect the meaning, construction or interpretation of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement EFFECTIVE
as of the date first above written.

INDEMNITEE

- ------------------------------------
Signature Date

JLM INDUSTRIES, INC.

By:
---------------------------------
Date

<PAGE> 1
EXHIBIT 10.34

JLM INDUSTRIES, INC.

1997 EMPLOYEE STOCK PURCHASE PLAN

ARTICLE 1

PURPOSE.

The purpose of the JLM Industries, Inc. 1997 Employee Stock Purchase
Plan (the "Plan") is to provide employees of JLM Industries, Inc. (the
"Company") and its subsidiaries with an opportunity to acquire a proprietary
interest in the Company through the purchase of authorized but unissued shares
of common stock of the Company or issued shares of such common stock acquired
by the Company or its subsidiaries on the open market or otherwise (the "Common
Stock"). It is the intention of the Company to have the Plan qualify as an
"employee stock purchase plan" under Section 423 of the Internal Revenue Code
of 1986, as amended (the "Code"), and the regulations promulgated thereunder,
or any statute or regulation of similar import. The provisions of the Plan,
accordingly, shall be construed so as to extend and limit participation in a
manner consistent with the requirements of that section of the Code.

ARTICLE 2

DEFINITIONS.

The following words and terms as used herein shall have that meaning
set forth therefor in this Article 2 unless a different meaning is clearly
required by the context. Whenever appropriate, words used in the singular
shall be deemed to include the plural and vice versa, and the masculine gender
shall be deemed to include the feminine gender.

2.1 "ACCOUNT" shall mean the payroll deduction account maintained
for an electing Eligible Employee as provided in Article 7.

2.2 "BOARD" or "BOARD OF DIRECTORS" shall mean the Board of
Directors of the Company.

2.3 "CODE" shall mean the Internal Revenue Code of 1986, as it may
be amended from time to time, or any successor statute. References to a
specified section of the Code shall include a reference to any successor
provision.

2.4 "COMMITTEE" is defined in Section 3.1.

2.5 "COMMON STOCK" shall mean the common stock of the Company.

2.6 "COMPANY" shall mean JLM Industries, Inc., a Delaware
corporation, and any successor.
<PAGE> 2

2.7 "COMPENSATION" shall mean an Eligible Employee's regular
salary and wages, overtime pay, bonuses and commissions (in all cases, before
any reduction for elective contributions to any Code Section 401(k) or Code
Section 125 Plan), but does not include credits or benefits under the Plan, or
any amount contributed by the Company to any pension, profit sharing or
employee stock ownership plan, or any employee welfare, life insurance or
health insurance plan or arrangement, or any deferred compensation plan or
arrangement.

2.8 "EFFECTIVE DATE" is defined in Section 8.9.

2.9 "ELIGIBLE EMPLOYEE" shall mean any individual employed by the
Company or any Subsidiary who meets the eligibility requirements of Article 4.

2.10 "FAIR MARKET VALUE" of the shares of Common Stock shall mean
the closing price, on the date in question (or, if no shares are traded on such
day, on the next preceding day on which shares were traded), of the Common
Stock as reported on the Composite Tape, or if not reported thereon, then such
price as reported in the trading reports of the principal securities exchange
in the United States on which such stock is listed, or if such stock is not
listed on a securities exchange in the United States, the mean between the
dealer closing "bid" and "ask" prices on the over-the-counter market as
reported by the National Association of Security Dealers Automated Quotation
System (NASDAQ), or NASDAQ's successor, or if not reported on NASDAQ, the fair
market value of such stock as determined by the Committee in good faith and
based on all relevant factors.

2.11 "OFFERING PERIOD" is defined in Section 5.1.

2.12 "PURCHASE DOCUMENTS" is defined in Section 6.1.

2.13 "PURCHASE PRICE" is defined in Section 5.2.

2.14 "PLAN" shall mean the JLM Industries, Inc. 1997 Employee Stock
Purchase Plan, as set forth herein and as amended from time to time.

2.15 "SUBSIDIARY" shall mean any corporation that at the time
qualifies as a subsidiary of the Company under the definition of "subsidiary
corporation" contained in Section 424(f) of the Code.

ARTICLE 3

ADMINISTRATION

3.1 COMMITTEE. This Plan shall be administered by a committee
appointed by the Board of Directors (the "Committee"). The Committee shall
consist of not less than two (2) nor more than five (5) persons, each of whom
shall be a member of the Board, and none of whom shall be eligible to
participate under the Plan. The Board of Directors may from time to time
remove members from, or add members to, the Committee. Vacancies on the
Committee, howsoever caused, shall be filled by the Board of Directors.

2
<PAGE> 3

3.2 ORGANIZATION. The Committee shall select one of its members
as chairman, and shall hold meetings at such time and places as it may
determine. The acts of a majority of the Committee at which a quorum is
present, or acts reduced to or approved in writing by a majority of the members
of the Committee, shall be valid acts of the Committee.

3.3 POWER AND AUTHORITY. Subject to the provisions of the Plan,
the Committee shall have full authority, in its discretion: (a) to determine
the employees of the Company and its Subsidiaries who are eligible to
participate in the Plan; (b) to determine the purchase price of the shares of
Common Stock being offered; and (c) to interpret the Plan, and to prescribe,
amend and rescind rules and regulations with respect thereto. The
interpretation and construction by the Committee of any provision of the Plan
over which it has discretionary authority shall be final and conclusive. All
actions and policies of the Committee shall be consistent with the
qualification of the Plan at all times as an employee stock purchase plan under
Section 423 of the Code.

3.3.1 NO LIABILITY. No member of the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan.

ARTICLE 4

EMPLOYEES ELIGIBLE TO PARTICIPATE

4.1 GENERAL RULE. Any person, including any officer but not a
person who is solely a director, who is in the employment of the Company or any
Subsidiary on the first day of an Offering Period is eligible to participate in
the Plan with respect to that Offering Period, except: (a) a person who has
been employed less than one year; (b) a person whose customary employment is 20
hours or less per week; and (c) a person whose customary employment is for not
more than five months in any calendar year. The Committee shall have the sole
power to determine who is and who is not an Eligible Employee.

4.2 SPECIAL RULES. Notwithstanding any provision of the Plan to
the contrary, no employee shall be eligible to subscribe for any shares of
Common Stock under the Plan if:

4.2.1 immediately after the subscription, the employee
would own stock and/or hold outstanding options to purchase stock, possessing
5% or more of the total combined voting power or value of all classes of stock
of the Company or of any Subsidiary (as determined in accordance with the
provisions of Section 423(b)(3) of the Code);

4.2.2 the subscription would permit the employee's rights
to purchase shares under all stock purchase plans of the Company and its parent
and subsidiary corporations to accrue at a rate that exceeds $25,000 of fair
market value of such shares (determined at the time such right to subscribe
accrues) for each calendar year in which such right to subscribe is outstanding
at any time;

4.2.3 the subscription is otherwise prohibited by law; or

3
<PAGE> 4

4.2.4 except with respect to the first Offering Period, the
employee's employment is terminated for any reason prior to the time
reservation or cancellation of participation in an offering is prohibited under
Section 6.2, and with respect to the first Offering Period, his or her
employment is terminated for any reason prior to the time he elects to
participate in such offering by satisfying the conditions of Section 6.1.

ARTICLE 5

OFFERS

5.1 OFFERING PERIODS. There shall be twenty-one (21) offering
periods under the Plan: the first offering period shall commence on the closing
of the initial public offering for the Common Stock and shall conclude 45 days
after such closing; thereafter, separate offering periods shall commence on the
first day and conclude on the last day of the months of April and October in
each of the years 1998 to 2007, inclusive (each an "Offering Period"). Except
for the maximum number of shares of Common Stock to be offered under the Plan,
except for a lack of available shares of Common Stock, and except for the
limitation on the number of shares of Common Stock for which each Eligible
Employee may subscribe, there shall be no limit on the aggregate number of
shares of Common Stock for which subscriptions may be made with respect to any
particular Offering Period. The right of an Eligible Employee to subscribe for
shares of Common Stock in an Offering Period shall not be deemed to accrue
until the first day of that Offering Period.

5.2 PRICE. The purchase price per share of Common Stock for an
Offering Period shall be 85% of the Fair Market Value of the Common Stock
immediately prior to the beginning of the Offering Period (the "Purchase
Price"); provided, however, that with respect to the first Offering Period, the
Purchase Price per share shall be 85% of the lesser of (a) the Fair Market
Value of the Common Stock immediately prior to the beginning of the Offering
Period or (b) the Fair Market Value of the Common Stock immediately prior to
the last day of the Offering Period.

5.3 NUMBER OF SHARES TO BE OFFERED.

5.3.1 The maximum number of shares of Common Stock that may
be offered under the Plan is 75,000.

5.3.2 During each Offering Period, an Eligible Employee
shall be entitled to subscribe for a total number of shares of Common Stock not
to exceed the number determined by dividing 3% of the Eligible Employee's
Compensation for the preceding calendar year by the Purchase Price. For
example, if the Purchase Price of the shares is $10, an Eligible Employee who
receives Compensation of $30,000 for the preceding calendar year would be able
to subscribe for a maximum of 90 shares ($30,000 x 3% =$900 / $10 = 90). For
those Eligible Employees who are entitled to purchase at least ten (10) shares
during an Offering Period, no subscriptions shall be made for fewer than ten
(10) shares.

5.3.3 Subscriptions shall be allowed for full shares only.
Any rights to subscribe for fractional shares shall be void; and any
computation relating to fractional shares shall be rounded down to the next
lowest whole number of shares.

<PAGE> 5

5.3.4 If with respect to an Offering Period the available
shares are oversubscribed, the aggregate of the subscriptions allowable under
Section 5.3.2 shall be reduced to such lower figure as may be necessary to
eliminate the oversubscription. Such reduction shall be effected on a
proportionate basis as equitably as possible; but in no event shall such
reduction result in a subscription for fractional shares. In the event of an
oversubscription and cutback as provided in this Section 5.3.4, the Company
will refund to the participating Eligible Employees any excess payment for
subscribed Shares as soon as practicable after the end of the Offering Period.

ARTICLE 6

PARTICIPATION AND PAYMENT

6.1 ELECTION TO PARTICIPATE. An Eligible Employee may become a
participant in an offering: (a) by completing a subscription agreement,
indicating the number of shares of Common Stock to be purchased, and such other
documents as the Company may require (the "Purchase Documents"); and (b) by
tendering the Purchase Documents and cash or a check (payable in U.S. funds)
for the full subscription price (less the amount to be withdrawn from such
Eligible Employee's Account pursuant to Section 7.3) to the Secretary of the
Company (or such other person as may be designated by the Committee) at any
time during the offering. With respect to the first Offering Period, the
Eligible Employee shall tender an amount equal to the purchase price based on
the Fair Market Value of the Common Stock as of the beginning of the offering
period. If the final purchase price is less, the Company shall refund the
excess amount to the Eligible Employee as soon as practicable after the close
of the Offering Period. Purchase Documents and cash or check received by the
Secretary of the Company (or other designated person) before or after the
offering shall be void and shall be given no effect with respect to the
offering; and the Secretary shall return such documents and cash or check to
the involved employee as soon as practicable after receipt.

6.2 NO REVOCATION OF ELECTION. No election to participate in an
offering may be revoked or canceled by an Eligible Employee once the Purchase
Documents and full payment have been tendered to the Company; provided,
however, that with respect to the first Offering Period, an Eligible Employee
may revoke his election to participate in the offering by providing written
notice thereof to the Secretary of the Company (or other designated person) on
or before the last day of such Offering Period.

Such revocation may be with respect to all or less than all of the
shares of Common Stock originally elected to be purchased. In the event of any
such revocation, the Company shall refund to such Eligible Employee, as soon as
practicable after such revocation, the amount previously tendered for the
shares to which the revocation relates.

6.3 NO INTEREST. No interest shall be payable on the purchase
price of the shares of Common Stock subscribed for or on the funds returned to
employees as a result of an oversubscription or an overpayment, pursuant to
Section 6.1 for early or late delivery or pursuant to Section 6.2 after a
revocation, or otherwise.

5
<PAGE> 6
6.4 DELIVERY OF CERTIFICATES REPRESENTING SHARES.

6.4.1 As soon as practicable after the completion of each
offering, the Company shall deliver or cause to be delivered to each
participating employee a certificate or certificates representing the shares of
Common Stock purchased in the offering.

6.4.2 Certificates representing shares of Common Stock to
be delivered to a participating employee under the Plan will be registered in
the name of the participating employee, or if the participating employee so
directs, by written notice to the Company prior to the termination date of the
offering, and to the extent permitted by applicable law, in the names of the
participating employee and one such other person as may be designated by the
participating employee, as joint tenants with rights of survivorship.

6.5 RIGHTS AS STOCKHOLDER. No participating employee shall have
any right as a stockholder of the Company until after the completion of the
offering in which the employee participated and the date on which the employee
becomes a record owner of the shares purchased under the Plan (the "record
ownership date"). No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property), distributions,
or other rights for which the record date is prior to the record ownership
date.

6.6 TERMINATION OF EMPLOYMENT. An employee whose employment is
terminated for any reason shall have no right to participate in the Plan after
termination. However, the termination shall not affect any election to
participate in the Plan that is made prior to termination in accordance with
the provisions of Section 6.1.

6.7 RIGHTS NOT TRANSFERABLE. The right of an Eligible Employee to
participate in the Plan shall not be transferable by the employee, and no right
of an Eligible Employee under this Plan may be exercised after his death, by
his Personal Representative or anyone else, or during his lifetime by any
person other than the Eligible Employee.

ARTICLE 7

PAYROLL DEDUCTION

7.1 ELECTION OF PAYROLL DEDUCTION. As permitted in the discretion
of the Committee from time to time, each Eligible Employee may elect (on such
form as may be provided from time to time by the Company) to have a portion of
the employee's Compensation deducted from each paycheck (or, if the Company so
permits, from only the first paycheck in each month), which amounts shall not
exceed in the aggregate such amount as determined by the Committee from time to
time. An Eligible Employee may change the amount to be withheld from time to
time in accordance with rules established by the Committee, which rules may
include, among other things, limitations on the number of times changes are
permitted and when changes are permitted. A change shall be effective no
earlier than the first full payroll period following receipt of the new form by
the Committee. The Committee may, however, on a uniform and non-discriminatory
basis delay the effective date of a

<PAGE> 7

change if it determines that such a delay is either necessary or appropriate
for the proper administration of the Plan.

7.2 MAINTENANCE OF ACCOUNTS. A separate Account shall be
maintained for each Eligible Employee who has amounts withheld from the
employee's Compensation under this Article 7. The maintenance of separate
Accounts shall not require the segregation of any assets from any other assets
held under this Article 7. The Accounts shall not bear interest. Each Account
shall be adjusted from time to time to reflect the amounts withheld from the
Compensation of the Eligible Employee to whom the Account relates, the amounts
withdrawn by such Eligible Employee for purchases of shares of Common Stock
under the Plan, and for other amounts withdrawn by such Eligible Employee from
the Account.

7.3 USE OF ACCOUNTS TO PURCHASE COMMON STOCK. At the time that an
Eligible Employee elects to participate in an offering under Section 6.1, the
Eligible Employee may elect to have a specified amount from his or her Account
(up to the whole amount thereof) used to pay all or a portion of the Purchase
Price for the shares of Common Stock purchased.

7.4 OTHER USE OF ACCOUNTS. At any time that a person is no longer
an employee (including by reason of death) or an Eligible Employee, the balance
in such person's Account shall be paid to such person or his legal
representative. In addition, the Committee may also permit the complete
withdrawal of the amounts in an Account under such uniform and
non-discriminatory conditions as it may impose from to time to time (including,
without limitation, not permitting the Eligible Employee making such withdrawal
from again electing payroll deductions for a specified period of time). Except
as otherwise provided in Section 7.3 and this Section 7.4, an Eligible Employee
shall not withdraw any amount from his Account, in whole or in part.

ARTICLE 8

MISCELLANEOUS

8.1 STOCK ADJUSTMENTS.

8.1.1 In the event of any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split or other
division or consolidation of shares or the payment of a stock dividend (but
only on the Common Stock) or any other increase or decrease in the number of
such shares effected without any receipt of consideration by the Company, then,
in any such event, the number of shares of Common Stock that remain available
under the Plan, and the number of shares of Common Stock and the purchase price
per share of Common Stock then subject to subscription by Eligible Employees,
shall be proportionately and appropriately adjusted for any such increase or
decrease.

8.1.2 Subject to any required action by the stockholders,
if any change occurs in the shares of Common Stock by reason of any
recapitalization, reorganization, merger, consolidation, split-up, combination
or exchange of shares, or of any similar change affecting the shares of Common
Stock, then, in any such event, the number and type of shares then subject to
subscription by Eligible

7
<PAGE> 8

Employees, and the purchase price thereof, shall be proportionately and
appropriately adjusted for any such change.

8.1.3 In the event of a change in the Common Stock as
presently constituted that is limited to a change of all of its authorized
shares with par value into the same number of shares with a different par value
or without par value, the shares resulting from any change shall be deemed to
be shares of Common Stock within the meaning of the Plan.

8.1.4 To the extent that the foregoing adjustments relate
to stock or securities of the Company, such adjustments shall be made by, and
in the discretion of, the Committee, whose determination in that respect shall
be final, binding and conclusive.

8.1.5 Except as hereinabove expressly provided in this
Section 8.1, an Eligible Employee shall have no rights by reason of any
division or consolidation of shares of stock of any class or the payment of any
stock dividend or any other increase or decrease in the number of shares of
stock of any class or by reason of any dissolution, liquidation, merger or
consolidation, or spin-off of assets or stock of another corporation; and any
issuance by the Company of shares of stock of any class, securities convertible
into shares of stock of any class, or warrants or options for shares of stock
of any class shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Common Stock subject to
any subscription.

8.1.6 The existence of the Plan, and any subscription for
shares of Common Stock hereunder, shall not affect in any way the right or
power of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure or to merge or to consolidate, or
to dissolve, to liquidate, to sell, or to transfer all or any part of its
business or assets.

8.2 LISTING AND REGISTRATION OF COMMON STOCK. If at any time the
Board of Directors shall determine, in its discretion, that the listing,
registration or qualification of the shares of Common Stock covered by the Plan
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the Plan or the offering, issue or
purchase of shares thereunder, the Plan shall not be effective as to later
offerings unless and until such listing, registration, qualification, consent
or approval shall have been effected or obtained free of any conditions not
acceptable to the Board of Directors. Notwithstanding anything in the Plan to
the contrary, if the provisions of this Section 8.2 become operative and if, as
a result thereof, an offering is missed in whole or in part, then and in that
event, the missed portion of the offering shall be passed and the term of the
Plan shall not be affected. Notwithstanding the foregoing or any other
provision in the Plan, the Company shall have no obligation under the Plan to
cause any shares of Common Stock to be registered or qualified under any
federal or state law or listed on any stock exchange or admitted to any
national marketing system.

8.3 TERM OF PLAN. The Plan, unless sooner terminated as provided
in Section 8.4, shall commence upon the satisfaction of the conditions of
Section 8.9 and shall terminate on the conclusion of the offering to be made in
October, 2007.

8.4 AMENDMENT OF THE PLAN; TERMINATION. The Board shall have the
right to revise, amend or terminate the Plan at any time without notice,
provided that no Eligible Employee's existing

8
<PAGE> 9
rights are adversely affected thereby without the consent of the Eligible
Employee, and provided further that, without approval of the stockholders of
the Company, no such revision or amendment shall: (a) increase the total number
of shares of Common Stock to be offered; or (b) materially modify the
requirements as to eligibility for participation in the Plan. The foregoing
prohibitions of this Section 8.4 shall not be affected by adjustments in shares
and purchase price made in accordance with the provisions of Section 8.1.

8.5 APPLICATION OF FUNDS. The proceeds received by the Company
from the sale of shares of Common Stock pursuant to the Plan will be used for
general corporate purposes.

8.6 NO OBLIGATION TO PARTICIPATE. The offering of any shares of
Common Stock under the Plan shall impose no obligation upon any Eligible
Employee to subscribe to purchase any such shares.

8.7 NO IMPLIED RIGHTS TO EMPLOYEES. The existence of the Plan,
and the offering of shares of Common Stock under the Plan, shall in no way give
any employee the right to continued employment, give any employee the right to
receive any Common Stock or any additional Common Stock under the Plan, or
otherwise provide any employee any rights not specifically set forth in the
Plan.

8.8 WITHHOLDING. Whenever the Company proposes or is required to
issue or transfer shares of Common Stock under the Plan, the Company shall have
the right to require a participating employee to remit to the Company an amount
sufficient to satisfy any federal, state or local withholding tax liability
prior to the delivery of any certificate or certificates for such shares.
Whenever under the Plan payments are to be made in cash, such payments shall be
made net of an amount sufficient to satisfy any federal, state or local
withholding tax liability.

8.9 CONDITIONS PRECEDENT TO EFFECTIVENESS. The Plan shall become
effective upon the satisfaction of all the following conditions, with the
effective date of the Plan being the date that the last such condition is
satisfied:

8.9.1 the adoption of the Plan by the Board of Directors;

8.9.2 the approval of the Plan by the stockholders of the
Company within twelve (12) months after its adoption by the Board; and

8.9.3 the closing of the initial public offering of the
Company's Common Stock.

<PAGE> 1
EXHIBIT 10.35

JLM INDUSTRIES, INC.

LONG TERM INCENTIVE PLAN

ARTICLE ARTICLE 1

ESTABLISHMENT; PURPOSE

1.1 ESTABLISHMENT. JLM Industries, Inc., a Florida corporation,
(the "Company") hereby establishes an incentive compensation plan to be known
as the "JLM Industries, Inc. Long Term Incentive Plan" (the "Plan").

1.2 PURPOSE. The purpose of the Plan is to (a) attract, retain
and motivate participating employees of the Company and its subsidiaries
through awards of shares of the Common Stock of the Company (the "Shares"),
options to purchase Shares (the "Options") and Stock Appreciation Rights (the
"SARs"), (b) encourage employee ownership of Shares and (c) encourage
participating employees to think and act like owners of the Company.

1.3 MAXIMUM NUMBER OF SHARES. The maximum number of Shares that
may be offered under the Plan is 750,000, subject to adjustment as provided in
Section 9.1. If an Option is surrendered or for any other reason ceases to be
exercisable in whole or in part, the Shares that are subject to such Option,
but as to which the Option has not been exercised, shall again become available
for offering under the Plan. Any awards under the Plan made other than in
Shares or Options shall not reduce the maximum number of Shares covered by the
Plan.

1.4 STATUS. It is the intention of the Company that incentive
stock options granted under the Plan qualify as "incentive stock options" under
Section 422 of the Code, and the regulations promulgated thereunder. The
provisions of the Plan with respect to ISOs, accordingly, shall be construed
in a manner consistent with such requirements. Except with respect to ISOs, no
other Award under the Plan is intended to qualify for special treatment or
status under the Code.

ARTICLE ARTICLE 2

DEFINITIONS

2.1 DEFINITIONS. The following words and terms as used herein
shall have that meaning set forth therefor in this Article 2 unless a different
meaning is clearly required by the context.

2.1.1 "AWARD" shall mean an Option, Restricted Share, SAR
or any cash payment granted or awarded under the Plan.

<PAGE> 2

2.1.2 "AWARD AGREEMENT(S)" shall mean any document,
agreement or certificate deemed by the Committee of Directors as necessary or
advisable to be entered into with or delivered to a Participant in connection
with or as a condition precedent to the valid completion of the grant of an
Award under the Plan.

2.1.3 "BOARD" or "BOARD OF DIRECTORS" shall mean the Board
of Directors of the Company.

2.1.4 "COMMITTEE" is defined in Article 3.1.

2.1.5 "CHIEF EXECUTIVE OFFICER" shall mean the officer so
designated from time to time by the Committee, or if the Board shall fail to
so designate an officer to that position, the President of the Company.

2.1.6 "CODE" shall mean the Internal Revenue Code of 1986,
as amended. Reference to a specific section of the Code shall include a
reference to any successor provision.

2.1.7 "COMPANY" shall mean JLM Industries, Inc., a Delaware
corporation, and its successors.

2.1.8 "EFFECTIVE DATE" is defined in Section 9.7.

2.1.9 "ELIGIBLE EMPLOYEE" shall mean any individual
employed by the Company or any Subsidiary who meets the eligibility
requirements of Article 4.

2.1.10 "FAIR MARKET VALUE" of the Shares shall mean the
closing price, on the date in question (or, if no Shares are traded on such
day, on the next preceding day on which Shares were traded), of the Shares as
reported on the Composite Tape, or if not reported thereon, then such price as
reported in the trading reports of the principal securities exchange in the
United States on which such stock is listed, or if such stock is not listed on
a securities exchange in the United States, the mean between the dealer closing
"bid" and "ask" prices on the over-the-counter market as reported by the
National Association of Security Dealers Automated Quotation System (NASDAQ),
or NASDAQ's successor, or if not reported on NASDAQ, the fair market value of
such stock as determined by the Committee in good faith and based on all
relevant factors.

2.1.11 "ISO" shall mean an incentive stock option granted in
accordance with the provisions of Article 5 of the Plan.

2.1.12 "NSO" shall mean a nonqualified stock option granted
in accordance with the provisions of Article 6 of the Plan.

2.1.13 "OPTION" shall mean an ISO or an NSO.

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<PAGE> 3

2.1.14 "OPTIONEE" shall mean an Eligible Employee to whom
an Option is granted under the Plan.

2.1.15 "PARTICIPANT" shall mean an Eligible Employee, who
in accordance with the terms of the Plan, is first recommended by the Chief
Executive Officer and then approved by the Committee for participation in the
Plan as a recipient of an Award and who receives an Award.

2.1.16 "PLAN" shall mean the JLM Industries, Inc. Long Term
Incentive Plan, as set forth herein and as amended from time to time.

2.1.17 "RESTRICTED SHARE(S)" shall mean any Shares granted
or awarded to a Participant in accordance with the provisions of Article 8 of
the Plan.

2.1.18 "SAR" shall mean a Stock Appreciation Right granted
in accordance with the provisions of Article 7 of the Plan, which as to each
SAR entitles the Participant to receive payment equal to the excess of (1) the
Fair Market Value of a Share at the time of payment or exercise over (2) a
specified price or value set or established at the time of grant of the SAR.

2.1.19 "SHARES" shall mean shares of the common stock of
the Company.

2.1.20 "SUBSIDIARY" shall mean any corporation that at the
time qualifies as a subsidiary of the Company under the definition of
"subsidiary corporation" contained in Section 424(f) of the Code.

2.1.21 "10% STOCKHOLDER" shall mean an individual who owns
more than 10% of the total combined voting power of all classes of stock of the
Company or of a parent or subsidiary corporation.

2.2 USAGE. Whenever appropriate, words used in the
singular shall be deemed to include the plural and vice versa, and the
masculine gender shall be deemed to include the feminine gender.

ARTICLE 3

ADMINISTRATION

3.1 COMMITTEE. This Plan shall be administered by a
committee appointed by the Board of Directors (the "Committee"). The Committee
shall consist of not less than two (2) nor more than five (5) persons, each of
whom shall be a member of the Board, and none of whom shall be eligible to
participate under the Plan. The Board of Directors may from time to time
remove members from, or add members to, the Committee. Vacancies on the
Committee, howsoever caused, shall be filled by the Board of Directors.

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<PAGE> 4

3.2 ORGANIZATION. The Committee shall select one of its
members as chairman, and shall hold meetings at such time and places as it may
determine. The acts of a majority of the Committee at which a quorum is
present, or acts reduced to or approved in writing by a majority of the members
of the Committee, shall be valid acts of the Committee.

3.3 POWER AND AUTHORITY. Subject to the provisions of
the Plan, the Committee shall have full authority, in its discretion: (a) to
determine from among Eligible Employees those persons who shall become
Participants; (b) to determine the nature, amount and terms and conditions of
all Awards under the Plan, in accordance with and subject to the specific
limitations and requirements set forth in the Plan; and (c) to interpret the
Plan, the terms of all Awards and Award Agreements and any other agreement or
instrument awarded, issued or entered into under the Plan, and to prescribe,
amend and rescind rules and regulations with respect to the administration of
the Plan. The interpretation and construction by the Committee of any
provision of the Plan, any Award or any other agreement or instrument awarded,
issued or entered into under the Plan, and all other determinations and
decisions of the Committee pursuant to the provisions of the Plan, shall be
final, conclusive and binding on all Participants and other affected persons.
All actions and policies of the Committee, to the extent they deal with ISOs,
shall be consistent with the qualification of ISOs as incentive stock options
under Section 422 of the Code.

3.4 DISCRETIONARY AUTHORITY. The Committee' decision to
authorize the grant of an Award to an Eligible Employee at any time shall not
require the Committee to authorize the grant of an Award to that employee at
any other time or to any other employee at any time; nor shall its
determination with respect to the size, type or terms and conditions of the
Award to be granted to an Eligible Employee at any time require it to authorize
the grant of an Award of the same type or size or with the same terms and
conditions to that employee at any other time or to any other employee at any
time. The Committee shall not be precluded from authorizing the grant of an
Award to any Eligible Employee solely because the employee previously may have
been granted an Award of any kind under the Plan.

3.5 NO LIABILITY. No member of the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan.

ARTICLE 4

EMPLOYEES ELIGIBLE TO PARTICIPATE

4.1 GENERALLY. Any person, including any officer
but not a person who is solely a director, who is in the employ of the Company
or any Subsidiary on the date of a grant of an Award shall be an Eligible
Employee, able to participate in the Plan in accordance with the terms of the
Plan. The Committee shall have the sole power to determine if the eligibility
requirements have been satisfied.

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<PAGE> 5

4.2 PARTICIPANT STATUS. Without limiting the
provisions of Section 3.3, the Chief Executive Officer, in his sole discretion,
from time to time may select from among Eligible Employees persons to recommend
to the Committee to become Participants in the Plan. Any Eligible Employee so
recommended to the Committee and who remains an Eligible Employee shall become
a Participant upon the approval of such status by the Committee, which approval
shall be conclusively evidenced by the award or grant of an Award to a
Participant.

4.3 ISO ELIGIBILITY REQUIREMENT. Notwithstanding
any provision of the Plan to the contrary, no person shall be eligible to
receive any ISOs under the Plan if such person would not be able qualify for
the benefits of incentive stock options under Section 422 of the Code.

ARTICLE 5

TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS

5.1 GRANT. Any ISO granted pursuant to the Plan
shall be authorized by the Committee and shall be evidenced by certificates or
agreements in such form as the Committee from time to time shall approve, which
certificates or agreements shall comply with and be subject to the terms and
conditions hereinafter specified. Upon the granting of any ISO, the Committee
shall promptly cause the Optionee to be notified of the fact that such Option
has been granted. The date on which the Committee approves the grant of an ISO
shall be considered to be the date on which such Option is granted.

5.2 NUMBER OF SHARES. Each ISO shall state the number
of Shares to which it pertains.

5.3 OPTION PRICE. Each ISO shall state the option
price, which option price shall be determined by the Committee in its
discretion. Notwithstanding the foregoing, the option price in no event shall
be less than 100% of the Fair Market Value of the Shares on the date of grant
of the Option; or, in the case of an ISO being issued to an Eligible Employee
who is a 10% Stockholder at the time an ISO is granted, 110% of the Fair Market
Value of the Shares on the date of grant.

5.4 METHOD OF EXERCISE. An Optionee may exercise an ISO
during such time as may be permitted by the Option and the Plan by providing
written notice to the Committee, tendering the purchase price in accordance
with the provisions of Section 5.5, and complying with any other exercise
requirements contained in the Option or promulgated from time to time by the
Committee.

5.5 METHOD OF PAYMENT. Payment of the option price upon
the exercise of the ISO shall be in: (a) United States dollars in cash or by
check, bank draft or money order payable to the order of the Company; (b) in
the discretion of and in the manner determined by the Committee, by the
delivery of Shares of Common Stock already owned by the Optionee; (c) by any
other legally permissible means acceptable to the Committee at the time of
grant of the Option (including cashless exercise as permitted under the Federal
Reserve Board's Regulation T, subject to applicable legal restrictions); or in
the discretion of the Committee, through a combination of (a), (b) and (c) of
this

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<PAGE> 6

Section. If the option price is paid in whole or in part through the delivery
of Shares, the decision of the Committee with respect to the Fair Market Value
of such Shares shall be final and conclusive.

5.6 TERM AND EXERCISE OF OPTIONS.

5.6.1 Unless otherwise specified in writing by
the Committee at the time of grant or in the Award Agreement, each ISO shall be
exercisable, in whole or in part, only in accordance with the following chart:

<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF YEARS FROM SHARES
DATE OPTION IS GRANTED EXERCISABLE
<S> <C>
Less than 1 year 0%
1 year but less than 2 years 33 1/3%
2 years but less than 3 years 66 2/3%
3 years 100%
</TABLE>

5.6.2 To the extent not exercised, exercisable
installments of ISOs shall be exercisable, in whole or in part, in any
subsequent period, but not later than the expiration date of the Option.
The Committee shall determine the expiration date of the Option at the time of
the grant of the Option; provided, however, that no ISO shall be exercisable
after the expiration of ten (10) years from the date it is granted; or, in the
case of a 10% Stockholder, no ISO shall be exercisable after the expiration of
five (5) years from the date it is granted. Not less than one hundred (100)
Shares may be exercised at any one time unless the number exercised is the
total number at the time exercisable under the Option.

5.6.3 Within the limits described above, the
Committee may impose additional requirements on the exercise of ISOs. When it
deems special circumstances to exist, the Committee in its discretion may
accelerate the time at which an ISO may be exercised if, under previously
established exercise terms, such Option was not immediately exercisable in
full, even if the acceleration would permit the Option to be exercised more
rapidly than the vesting set forth above in the chart, or as otherwise
specified by the Committee, would permit.

5.7 ADDITIONAL LIMITATIONS. The aggregate Fair
Market Value (determined as of the time an ISO is granted) of the Shares with
respect to which ISOs are exercisable for the first time by any Optionee in any
calendar year under the Plan and under all other incentive stock option plans
of the Company and any parent and subsidiary corporations of the Company (as
those terms are defined in Section 424 of the Code) shall not exceed $100,000.

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<PAGE> 7

5.8 DEATH OR OTHER TERMINATION OF EMPLOYMENT.

5.8.1 In the event that an Optionee shall cease
to be employed by the Company or a Subsidiary for any reason other than his or
her death, subject to the conditions that no ISO shall be exercisable after its
expiration date, such Optionee shall have the right to exercise the ISO at any
time within ninety (90) days after such termination of employment to the extent
his or her right to exercise such Option had accrued pursuant to this Article 5
at the date of such termination and had not previously been exercised; such
ninety (90) day period shall be increased to one (1) year for any Optionee who
ceases to be employed by the Company or a Subsidiary because he is disabled
(within the meaning of Section 22(e)( 3) of the Code) or who dies during the
ninety (90) day period and the Option may be exercised within such extended
time limit by the Optionee or, in the case of death, the personal
representative of the Optionee or by any person or persons who shall have
acquired the Option directly from the Optionee by bequest or inheritance.
Whether an authorized leave of absence or absence for military or governmental
service shall constitute termination of employment for purposes of the Plan
shall be determined by the Committee, whose determination shall be final and
conclusive.

5.8.2 In the event that an Optionee shall die
while in the employ of the Company or a Subsidiary and shall not have fully
exercised any ISO, the ISO may be exercised, subject to the conditions that no
ISO shall be exercisable after its expiration date, to the extent that the
Optionee's right to exercise such Option had accrued pursuant to this Article
5 at the time of his or her death and had not previously been exercised, at any
time within one (1) year after the Optionee's death, by the personal
representative of the Optionee or by any person or persons who shall have
acquired the Option directly from the Optionee by bequest or inheritance.

5.8.3 No ISO shall be transferable by the
Optionee otherwise than by will or the laws of descent and distribution.

5.8.4 During the lifetime of the Optionee, an ISO
shall be exercisable only by him or her and shall not be assignable or
transferable, and no other person shall acquire any rights therein.

5.9 DELIVERY OF CERTIFICATES REPRESENTING SHARES.

5.9.1 As soon as practicable after the exercise
of an ISO, the Company shall deliver or cause to be delivered to the Optionee
exercising the ISO a certificate or certificates representing the Shares
purchased upon the exercise. Certificates representing Shares to be delivered
to an Optionee will be registered in the name of the Optionee.

5.9.2 Certificates representing Shares to be
delivered to a participating employee under the Plan will be registered in the
name of the participating employee, or if the participating employee so
directs, by written notice to the Company, and to the extent permitted by
applicable law, in the names of the participating employee and one such other
person as may be designated by the participating employee, as joint tenants
with rights of survivorship.

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<PAGE> 8

5.10 RIGHTS AS A STOCKHOLDER. An Optionee shall have no
rights as a stockholder with respect to any Shares covered by his or her ISO
until the date on which he or she becomes a record owner of the Shares
purchased upon the exercise of the Option (the "record ownership date"). No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property), distributions, or other rights for which
the record date is prior to the record ownership date, except as provided in
Article 9.

5.11 MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS.
Subject to the terms and conditions and within the limitations of the Plan, the
Committee may modify outstanding ISOs granted under the Plan, or accept
the surrender of outstanding ISOs (to the extent not theretofore exercised)
and authorize the granting of new Options in substitution therefor (to
the extent not theretofore exercised). The Committee shall not, however,
modify any outstanding ISO so as to specify a lower option price or accept the
surrender of outstanding ISOs and authorize the granting of new Options in
substitution therefor specifying a lower option price. Notwithstanding the
foregoing, however, no modification of an ISO shall, without the consent of the
Optionee, alter or impair any of the rights or obligations under any ISO
theretofore granted under the Plan.

5.12 LISTING AND REGISTRATION OF SHARES. Each ISO
shall be subject to the requirement that if at any time the Committee shall
determine, in its discretion, that the listing, registration or qualification
of the Shares covered thereby upon any securities exchange or under any state
or federal laws, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in connection with, the
granting of such ISO or the issuance or purchase of Shares thereunder, such ISO
may not be exercised unless and until such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee. Notwithstanding anything in
the Plan to the contrary, if the provisions of this Section become operative,
and if, as a result thereof, the exercise of an ISO is delayed, then and in
that event, the term of the ISO shall not be affected.

5.13 OTHER PROVISIONS. The ISO certificates or
agreements authorized under the Plan shall contain such other provisions,
including, without limitation, restrictions upon the exercise of the Option, as
the Committee shall deem advisable. Any such certificate or agreement shall
contain such limitations and restrictions upon the exercise of the ISO as shall
be necessary in order that such Option will be an incentive stock option as
defined in Section 422 of the Code, or to conform to any change in the law.

ARTICLE 6

TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS

6.1 GRANT. Any NSO granted pursuant to the Plan shall
be authorized by the Committee and shall be evidenced by certificates or
agreements in such form as the Committee from time to time shall approve, which
certificates or agreements shall comply with and be subject to the terms and

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<PAGE> 9

conditions hereinafter specified. Upon the granting of any NSO, the Committee
shall promptly cause the Optionee to be notified of the fact that such Option
has been granted. The date on which the Committee approves the grant of a NSO
shall be considered to be the date on which such Option is granted.

6.2 NUMBER OF SHARES. Each NSO shall state the number
of Shares to which it pertains.

6.3 OPTION PRICE. Each NSO shall state the option
price, which option price shall be determined by the Committee in its
discretion and may be equal to, less than or greater than 100% of the Fair
Market Value of the Shares on the date of grant.

6.4 METHOD OF EXERCISE. An Optionee may exercise a NSO
during such time as may be permitted by the Option and the Plan by providing
written notice to the Committee, tendering the purchase price in accordance
with the provisions of Section 6.5, and complying with any other exercise
requirements contained in the Option or promulgated from time to time by the
Committee.

6.5 METHOD OF PAYMENT. Payment of the option price upon
the exercise of the NSO shall be: (a) in United States dollars in cash or by
check, bank draft or money order payable to the order of the Company; (b) in
the discretion of and in the manner determined by the Committee, by the
delivery of Shares already owned by the Optionee; (c) by any other legally
permissible means acceptable to the Committee at the time of grant of the
Option (including cashless exercise as permitted under the Federal Reserve
Board's Regulation T, subject to applicable legal restrictions); or in the
discretion of the Committee, through a combination of (a), (b) and (c) of
this Section. If the option price is paid in whole or in part through the
delivery of Shares, the decision of the Committee with respect to the Fair
Market Value of such Shares shall be final and conclusive.

6.6 TERM AND EXERCISE OF OPTIONS.

6.6.1 Unless otherwise specified in
writing by the Committee at the time of grant or in the Award Agreement, each
NSO shall be exercisable, in whole or in part, only in accordance with the
following chart:

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<PAGE> 10

6.6.2 To the extent not exercised,
exercisable installments of NSOs shall be exercisable, in whole or in part, in
any subsequent period, but not later than the expiration date of the Option.
The Committee shall determine the expiration date of the Option at the time of
the grant of the Option; provided, however, that no NSO shall be exercisable
after the expiration of ten (10) years from the date it is granted. Not less
than one hundred (100) Shares may be exercised at any one time unless the
number exercised is the total number at the time exercisable under the Option.

6.6.3 Within the limits described above, the
Committee may impose additional requirements on the exercise of NSOs. When it
deems special circumstances to exist, the Committee in its discretion may
accelerate the time at which a NSO may be exercised if, under previously
established exercise terms, such Option was not immediately exercisable in
full, even if the acceleration would permit the Option to be exercised more
rapidly than the vesting set forth above in the chart, or as otherwise
specified by the Committee, would permit.

6.7 DEATH OR OTHER TERMINATION OF EMPLOYMENT.

6.7.1 In the event that an Optionee shall cease
to be employed by the Company or a Subsidiary for any reason other than his or
her death, subject to the conditions that no NSO shall be exercisable after its
expiration date, such Optionee shall have the right to exercise the NSO
at any time within ninety (90) days after such termination of employment to the
extent his or her right to exercise such Option had accrued pursuant to this
Article 6 at the date of such termination and had not previously been exercised;
such ninety (90) day period shall be increased to one (1) year for any Optionee
who ceases to be employed by the Company or a Subsidiary because he is disable
(within the meaning of Section 22(e)( 3) of the Code) or who dies during the
ninety (90) day period and the Option may be exercised within such extended time
limit by the Optionee or in the case of death, the personal representative of
the Optionee or by any person or persons who shall have acquired the Option
directly from the Optionee by bequest or inheritance. Whether an authorized
leave of absence or absence for military or governmental service shall
constitute termination of employment for purposes of the Plan shall be
determined by the Committee, whose determination shall be final and conclusive.

6.7.2 In the event that an Optionee shall die
while in the employ of the Company or a Subsidiary and shall not have fully
exercised any NSO, the NSO may be exercised, subject to the conditions that no
NSO shall be exercisable after its expiration date, to the extent that the
Optionee's right to exercise such Option had accrued pursuant to this Article 6
at the time of his or her death and had not previously been exercised, at any
time within one (1) year after the Optionee's death, by the personal
representative of the Optionee or by any person or persons who shall have
acquired the Option directly from the Optionee by bequest or inheritance.

6.7.3 No NSO shall be transferable by the
Optionee otherwise than by will or the laws of descent and distribution.

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<PAGE> 11

6.7.4 During the lifetime of the Optionee, an
NSO shall be exercisable only by him or her and shall not be assignable or
transferable, and no other person shall acquire any rights therein.

6.8 DELIVERY OF CERTIFICATES REPRESENTING SHARES.

6.8.1 As soon as practicable after the
exercise of a NSO, the Company shall deliver or cause to be delivered to the
Optionee exercising the NSO a certificate or certificates representing the
Shares purchased upon the exercise. Certificates representing Shares to be
delivered to a Optionee will be registered in the name of the Optionee.

6.8.2 Certificates representing Shares to be
delivered to a participating employee under the Plan will be registered in the
name of the participating employee, or if the participating employee so
directs, by written notice to the Company, and to the extent permitted by
applicable law, in the names of the participating employee and one such other
person as may be designated by the participating employee, as joint tenants
with rights of survivorship.

6.9 RIGHTS AS A STOCKHOLDER. An Optionee shall have no
rights as a stockholder with respect to any Shares covered by his or her NSO
until the date on which he or she becomes a record owner of the Shares
purchased upon the exercise of the Option (the "record ownership date"). No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property), distributions, or other rights for which
the record date is prior to the record ownership date, except as provided in
Article 9.

6.10 MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS.
Subject to the terms and conditions and within the limitations of the Plan, the
Committee may modify outstanding NSOs granted under the Plan, or accept the
surrender of outstanding NSOs (to the extent not theretofore exercised) and
authorize the granting of new Options in substitution therefor (to the extent
not theretofore exercised). The Committee shall not, however, modify any
outstanding NSO so as to specify a lower option price or accept the surrender
of outstanding NSOs and authorize the granting of new Options in substitution
therefor specifying a lower option price. Notwithstanding the foregoing,
however, no modification of an NSO shall, without the consent of the Optionee,
alter or impair any of the rights or obligations under any NSO theretofore
granted under the Plan.

6.11 LISTING AND REGISTRATION OF SHARES. Each NSO shall
be subject to the requirement that if at any time the Committee shall
determine, in its discretion, that the listing, registration or qualification
of the Shares covered thereby upon any securities exchange or under any state
or federal laws, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in connection with, the
granting of such NSO or the issuance or purchase of shares thereunder, such NSO
may not be exercised unless and until such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee. Notwithstanding anything in
the Plan to the contrary, if the provisions of this Section become operative,
and if, as a result thereof, the exercise of a NSO is delayed, then and in that
event, the term of the NSO shall not be affected.

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<PAGE> 12

6.12 OTHER PROVISIONS. The NSO certificates or
agreements authorized under the Plan shall contain such other provisions,
including, without limitation, restrictions upon the exercise of the Option, as
the Committee shall deem advisable.

ARTICLE 7

STOCK APPRECIATION RIGHTS

7.1 GRANT. The Committee, in its sole discretion, from
time to time may authorize the grant of SARs to a Participant. An SAR may be
granted in connection with all or any portion of a previously or
contemporaneously granted Award (other than an SAR), or by itself and not in
connection with any other Award. An SAR may be granted at the time of grant of
the related Option and shall be subject to the same terms and conditions as the
related Option, except as this Article 7 may otherwise provide. The grant of
SAR shall be evidenced either by provisions in the Option to which it relates
or by a separate written agreement between the Company and the Participant,
which shall comply with and be subject to the terms and conditions of the Plan
and shall be in such form as the Committee from time to time shall approve (an
"SAR Agreement"). The SAR Agreement may contain such additional terms,
conditions or limitations, not inconsistent with the specific provisions of the
Plan, as may be approved by the Committee in it sole discretion.

7.2 TERMS AND CONDITIONS. Each SAR granted under the
Plan shall be exercisable or payable at such time or times, or upon the
occurrence of such event or events, and in such amounts or types of
consideration (including cash or Shares) as the Committee shall specify in the
SAR Agreement. Subsequent to the grant of an SAR, the Committee, at any time
before complete termination of such SAR, may accelerate the time or times at
which such SAR may be exercised or paid in whole or in part.

7.3 EXERCISE.

7.3.1 An SAR shall be exercised by surrendering the
SAR Agreement or, if the SAR was granted in connection with an Option, the
surrender of the related Option together with any SAR Agreement, or the
portion(s) thereof pertaining to the Shares with respect to which the SAR
is exercised, and providing the Company with a written notice in such form and
containing such information (including the number of Shares with respect to
which the SAR is being exercised) as the SAR Agreement or the Committee may
specify. The date on which the Company receives such surrender and notice
shall be the date on which the related Option, or portion thereof, shall be
deemed surrendered and the SAR shall be deemed exercised.

7.3.2 An SAR granted in connection with an Option
shall be exercisable only at such time or times, to such extent and by such
persons as the Option to which it relates shall be exercisable, provided that
an SAR granted in connection with an ISO shall not be exercisable on any

12
<PAGE> 13

date on which the Fair Market Value of a Share is less than or equal to the per
share exercise price of the ISO. An SAR shall be canceled when, and to the
extent that, any related Option is exercised, and an Option shall be canceled
when, and to the extent that, the Option is surrendered to the Company upon the
exercise of a related SAR.

7.4 PAYMENT. To effect payment or exercise of an
SAR, the Company shall make payment to the Participant in cash or Shares
(valued at their Fair Market Value on the date of payment or exercise) or in
combination of cash and Shares as provided in the SAR Agreement. If payment is
to be made in Shares, upon such exercise, the Participant shall be entitled to
receive that number of Shares which have an aggregate Fair Market Value on the
exercise date equal to the amount by which the Fair Market Value of one Share
on the exercise date exceeds the Option price per share of any related Option
or the Fair Market Value on the date of grant of the SAR, as the case may be,
multiplied by the number of Shares covered by the related Option or the SAR, as
the case may be, or portion thereof, surrendered in connection with the
exercise of the SAR.

7.5 EXPIRATION. An SAR granted in connection
with or related to an Option, unless previously exercised or canceled, shall
expire upon the expiration of the Option to which it relates. Any other SAR,
unless previously exercised or canceled, shall expire upon the tenth
anniversary of its grant. The exercise of an SAR granted in connection with an
Option shall result in a pro rata surrender or cancellation of any related
Option to the extent the SAR has been exercised.

7.6 DEATH OR OTHER TERMINATION OF EMPLOYMENT.

7.6.1 In the event that a Participant shall
cease to be employed by the Company or a Subsidiary for any reason other than
his or her death, subject to the conditions that no SAR shall be exercisable
after its expiration date, such Participant shall have the right to exercise
the SAR at any time within ninety (90) days after such termination of
employment to the extent his or her right to exercise such SAR had accrued
pursuant to this Article 7 at the date of such termination and had not
previously been exercised; such ninety (90) day period shall be increased to
one (1) year for any Participant who ceases to be employed by the Company or a
Subsidiary because he is disabled (within the meaning of Section 22(e)(3) of
the Code) or who dies during the ninety (90) day and the SAR may be exercised
within such extended time limit by the Participant or, in the case of death,
the personal representative of the Participant or by any person or persons who
shall have acquired the SAR directly from the Participant by bequest or
inheritance. Whether an authorized leave of absence or absence for military or
governmental service shall constitute termination of employment for purposes of
the Plan shall be determined by the Committee, whose determination shall be
final and conclusive.

7.6.2 In the event that a Participant shall die
while in the employ of the Company or a Subsidiary and shall not have fully
exercised any SAR, the SAR may be exercised, subject to the conditions that no
SAR shall be exercisable after its expiration date, to the extent that a
Participant's right to exercise such SAR had accrued in accordance with the
provisions of this Article 7 at the time of his or her death and had not
previously been exercised, at any time within one (1) year after a

13
<PAGE> 14

Participant's death, by the personal representative of a Participant or by any
person or persons who shall have acquired the SAR directly from a Participant
by bequest or inheritance.

7.6.3 No SAR shall be transferable by a
Participant otherwise than by will or the laws of descent and distribution.

7.6.4 During the lifetime of a Participant, an
SAR shall be exercisable only by him or her and shall not be assignable or
transferable, and no other person shall acquire any rights therein.

7.7 DELIVERY OF CERTIFICATES REPRESENTING SHARES.
As soon as practicable after the exercise or payment of an SAR payable in whole
or in part in Shares, the Company shall deliver or cause to be delivered to the
Participant exercising the SAR for Shares a certificate or certificates
representing the Shares issuable upon such purchase or exercise. Certificates
representing Shares to be delivered to a Participant will be registered in the
name of the Participant or if the Participant so directs, by written notice to
the Company, and to the extent permitted by applicable law, in the names of the
Participant and one such other person as may be designated by the Participant,
as joint tenants with rights of survivorship.

7.8 LISTING AND REGISTRATION OF SHARES. Each SAR
shall be subject to the requirement that if at any time the Committee shall
determine, in its discretion, that the listing, registration or qualification
of any Shares covered thereby upon any securities exchange or under any state
or federal laws, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in connection with, the
granting of such Option or the issuance or purchase of shares thereunder, such
SAR may not be paid or exercised unless and until such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee. Notwithstanding anything in
the Plan to the contrary, if the provisions of this Section become operative,
and if, as a result thereof, the exercise of an SAR is delayed, then and in
that event, the term of the SAR shall not be affected.

7.9 RIGHTS AS A STOCKHOLDER. In general, the holder of
an SAR shall have no rights as a stockholder. The holder of an SAR under which
Shares are issuable upon payment or exercise shall have no rights as a
stockholder of the Company until the date on which he or she becomes a record
owner of the Shares issued upon the payment or exercise of the SAR (the "record
ownership date"). No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property), distributions,
or other rights for which the record date is prior to the record ownership
date, except as provided in Article 7.

14
<PAGE> 15

ARTICLE 8

RESTRICTED SHARES

8.1 GENERAL. The Committee, in its sole discretion, from time to
time may authorize the grant of Restricted Shares to a Participant. In making
any such grant of Restricted Shares, the Committee may grant Restricted Shares
without the requirement of any cash payment or may require a cash payment from a
Participant in an amount no greater than the aggregate Fair Market Value of the
Restricted Shares as of the date of grant in exchange for, or as a condition
precedent to, the completion of the grant and the issuance of the Restricted
Shares.

8.2 RESTRICTION PERIOD. All Restricted Shares issued under Article 8
shall be subject to certain restrictions as set forth in Section 8.3, which
restrictions shall continue in effect for such period of time as is specified
in the Award Agreement (the "Restriction Period"). The Award Agreement may
contain such additional terms, conditions or limitations, not inconsistent
with the specific provisions of the Plan, as may be approved by the Committee
in it sole discretion.

8.3 CERTAIN RESTRICTIONS. Until the expiration of the Restriction
Period, Restricted Shares shall be subject to the following restrictions: (a)
the Participant shall not be entitled to take possession of the certificate or
certificates representing the Shares; (b) the Restricted Shares may not be
sold, transferred, assigned, pledged, conveyed, hypothecated or otherwise
disposed of (other than by operation of law); and (c) the Shares may be
forfeited immediately as provided in Section 8.4. In addition, the Committee,
as specified in writing at the time of grant or in the Award Agreement, may
condition the right to receive Restricted Shares upon the satisfaction of such
additional terms, conditions or limitations, including but not limited to
performance criteria, as may be approved by the Committee in its sole
discretion.

8.4 TERMINATION OF EMPLOYMENT. Unless otherwise specified by the
Committee in writing at the time of the Award or in the Award Agreement, if the
employment of a Participant is terminated for any reason other the death or
disability (within the meaning of Section 22(e)(3) of the Code) of a
Participant in service before the expiration of the Restriction Period, the
Restricted Shares shall be forfeited immediately and all rights of a
Participant to such Shares shall terminate immediately without further
obligation on the part of the Company. Unless otherwise specified by the
Committee in writing at the time of the Award or in the Award Agreement, if a
Participant's employment is terminated by reason of the death or disability
(within the meaning of Section 22(e)(3) of the Code) of a Participant in
service before the expiration of the Restriction Period, (a) the number of
Restricted Shares held by the Company for a Participant's account pursuant to
Section 8.6 shall be reduced by partial forfeiture in an amount of Restricted
Shares in proportion equal to the percentage of the total Restriction Period
remaining after a Participant's termination of employment, (b) the restrictions
on the unforfeited balance of such Restricted Shares shall lapse on the date a
Participant's employment terminated and (c) subject to the safekeeping
provisions of Section 8.6, the certificate or certificates

15
<PAGE> 16

representing the Shares upon which the restrictions have lapsed shall be
delivered to a Participant (or, in the event of a Participant's death, to his
or her legal representative).

8.5 DISTRIBUTION OF RESTRICTED SHARES. If a Participant to whom
Restricted Shares have been issued pursuant to Article 8 remains in the
continuous employment of the Company or a Subsidiary until the expiration or
waiver by the Board of the Restriction Period and the satisfaction of any other
conditions imposed by the Award Agreement, all restrictions applicable to the
Restricted Shares at that time still outstanding and registered in the name of
a Participant shall lapse and, subject to the safekeeping provisions of Section
8.6, the certificate or certificates representing the Shares that were granted
to the Participant shall be delivered to the Participant.

8.6 DELIVERY OF CERTIFICATES REPRESENTING SHARES.

8.6.1 As soon as practicable after a grant of Restricted
Shares, unless the Award Agreement provides for a different issuance procedure,
the Company shall issue certificates representing the Restricted Shares
registered in the name of the holder of Restricted Shares.

8.6.2 To administer the restrictions imposed on Restricted
Shares under the Plan and the Award Agreement, certificates representing
Restricted Shares (to the extent they are issued under the Award Agreement
prior to satisfaction of such restrictions) shall not be delivered to
Participants but shall be delivered to the Company to be held by the Company as
safekeeping agent for the benefit of each Participant. A written safekeeping
receipt evidencing the Shares so held in safekeeping, bearing the name of the
Participant, indicating the number of the certificate or certificates and the
number of Shares so represented shall be delivered promptly to each
Participant. In its capacity as safekeeping agent for Participants, the
Company shall act in accordance with instructions received from such
Participants, which instructions are to be confirmed in writing if deemed
appropriate by the Company. The safekeeping agency shall not affect the rights
of Participants as owners of Restricted Shares, nor shall such agency affect
the restrictions imposed on Restricted Shares under the Plan or the Award
Agreement.

8.6.3 Upon the lapse, satisfaction or waiver of the Restriction
Period and any other restrictions imposed on Restricted Shares under the Plan
or the Award Agreement, any safekeeping agency arrangement adopted pursuant to
Section 8.6.2 shall terminate and the certificates representing the Shares
owned by Participants, registered in the name(s) of the Participants, shall be
delivered promptly to such Participants.

8.7 WAIVER OF RESTRICTIONS. The Committee, in its sole
discretion, may at any time waive or accelerate the expiration of any or all
restrictions with respect to Restricted Shares issued pursuant to this
Article 8.

8.8 RIGHTS AS A STOCKHOLDER. A Participant receiving
Restricted Shares shall have no rights as a stockholder with respect to any
Restricted Shares grant to him or her under the Plan until the date on which
he or she becomes a record owner of the Restricted Shares (the "record
ownership

16
<PAGE> 17

date"). No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property), distributions, or other rights
for which the record date is prior to the record ownership date, except as
provided in Article 9.

ARTICLE 9

MISCELLANEOUS

9.1 STOCK ADJUSTMENTS.

9.1.1 In the event of any increase or decrease in the number of
issued Shares resulting from a stock split or other division or consolidation
of shares or the payment of a stock dividend (but only on Shares) or any other
increase or decrease in the number of Shares effected without any receipt of
consideration by the Company, then, in any such event, the number of Shares
that remain available under the Plan, the number of Shares covered by each
outstanding Option, the exercise price per Share covered by each outstanding
Option, the number of Shares covered by each outstanding SAR and the price per
Share and the number and any purchase price for any Restricted Shares granted
but not yet issued, in each case, shall be proportionately and appropriately
adjusted for any such increase or decrease.

9.1.2 Subject to any required action by the stockholders, if
any change occurs in the Shares by reason of any recapitalization,
reorganization, merger, consolidation, split-up, combination or exchange of
shares, or of any similar change affecting Shares, then, in any such event, the
number and type of Shares then covered by each outstanding Option, the purchase
price per Share covered by each outstanding Option, the number of Shares
covered by each outstanding SAR and the exercise price per Share and the number
and any purchase price for any Restricted Shares granted but not yet issued, in
each case, shall be proportionately and appropriately adjusted for any such
change.

9.1.3 In the event of a change in the Shares as presently
constituted that is limited to a change of all of its authorized shares with
par value into the same number of shares with a different par value or without
par value, the shares resulting from any change shall be deemed to be Shares
within the meaning of the Plan.

9.1.4 To the extent that the foregoing adjustments relate to
stock or securities of the Company, such adjustments shall be made by, and in
the discretion of, the Committee, whose determination in that respect shall be
final, binding and conclusive; provided, however, that any Option granted
pursuant to Article 5 shall not be adjusted in a manner that causes such Option
to fail to continue to qualify as an incentive stock option within the meaning
of Section 422 of the Code.

9.1.5 Except as hereinabove expressly provided in this Section,
an Eligible Employee or a Participant shall have no rights by reason of any
division or consolidation of shares of stock of

17
<PAGE> 18

any class or the payment of any stock dividend or any other increase or
decrease the number of shares of stock of any class or by reason of any
dissolution, liquidation, merger or consolidation, or spin-off of assets or
stock of another corporation; and any issuance by the Company of shares of
stock of any class, securities convertible into shares of stock of any class,
or warrants or options for shares of stock of any class shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number or
price of Shares, any Option, any SAR or any Restricted Shares granted but not
yet issued.

9.1.6 The existence of the Plan, or the grant of an
Option, SAR or Restricted Shares under the Plan, shall not affect in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate, or to dissolve, to liquidate, to sell, or to transfer all or
any part of its business or assets.

9.2 TAX ABSORPTION PAYMENTS. The Company may, but is not
required to, make a cash payment, either directly to any Participant or on a
Participant's behalf, in an amount that the Committee estimates to be equal
(after taking into account any federal and state taxes that the Committee
estimates to be applicable to such cash payment) to any additional federal and
state income taxes that are imposed upon a Participant as a result of the
granting of any Award under the Plan (a "Tax Absorption Payment"). In
determining the amount of any Tax Absorption Payment, the Committee may adopt
such methods and assumptions as it considers appropriate, and it shall not be
required to examine the individual tax liability of any Participant. The
decision to make any Tax Absorption Payment shall be made by the Committee at
the same time as the grant of the Award to which it relates.

9.3 AMENDMENT OF THE PLAN; TERMINATION. The Board shall have
the right to revise, amend or terminate the Plan at any time without notice,
provided that no Participant's existing rights are adversely affected thereby
without the consent of such person, and provided further that, without approval
of the stockholders of the Company, no such revision or amendment shall (a)
increase the total number of Shares subject to the Plan; (b) decrease the price
at which ISOs may be granted; (c) materially modify the requirements as to
eligibility for participation in the Plan; (d) otherwise materially increase
the benefits under the Plan; or (e) remove the administration of the Plan from
the Committee. The foregoing prohibitions in this Section shall not be
affected by adjustments in shares and purchase price made in accordance with
the provisions of Section 9.1.

9.4 APPLICATION OF FUNDS. The proceeds received by the
Company from the sale of Shares or the exercise of Awards pursuant to the Plan
will be used for general corporate purposes.

9.5 NO IMPLIED RIGHTS TO EMPLOYEES. The existence of the
Plan and the granting of Awards under the Plan shall in no way give any
employee the right to continued employment or the right to receive any
additional Awards or any additional compensation under the Plan, or otherwise
provide any employee any rights not specifically set forth in the Plan or in
any Option, SAR or Award Agreement.

9.6 WITHHOLDING. Whenever the Company proposes or is
required to issue or transfer Awards under the Plan, the Company shall
have the right to require a Participant to remit to the Company an amount
sufficient to satisfy any federal, state or local withholding tax liability
prior to the delivery of any certificate or certificates for such shares.
Whenever under the Plan payments are

18
<PAGE> 19

to be made in cash, such payments shall be made net of an amount sufficient to
satisfy any federal, state or local withholding tax liability.

9.7 CONDITIONS PRECEDENT TO EFFECTIVENESS. The Plan shall
become effective upon the satisfaction of all the following conditions, with
the effective date of the Plan being the date that the last such condition is
satisfied:

9.7.1 the adoption of the Plan by the Board of
Directors;

9.7.2 the approval of the Plan by the stockholders of
the Company within 12 months after its adoption by the Board; and

9.7.3 the closing of the initial public offering of the
Company's Shares.

<PAGE> 1

EXHIBIT 10.36

JLM INDUSTRIES, INC.

NON-EMPLOYEE DIRECTORS' STOCK OPTION
PLAN

ARTICLE 1

GENERAL

1.1 PURPOSE. The purpose of the JLM Industries, Inc. Non-Employee
Directors' Stock Option Plan is to secure for JLM Industries, Inc. and its
stockholders the benefits of the incentive inherent in increased common stock
ownership by the members of the Board of Directors of the Company who are not
employees of the Company or any of its Subsidiaries.

1.2 MAXIMUM NUMBER OF SHARES. The maximum number of shares of Common
Stock that may be offered under the Plan is 25,000, subject to adjustment as
provided in Section 3.1 below. The Common Stock to be issued may be either
authorized and unissued shares or issued shares acquired by the Company or its
Subsidiaries. In the event that Options granted under the Plan shall terminate
or expire without being exercised in whole or in part, new Options may be
granted covering the shares not purchased under such lapsed Options.

1.3 DEFINITIONS. The following words and terms as used herein shall
have that meaning set forth therefor in this Section 1.3 unless a different
meaning is clearly required by the context. Whenever appropriate, words used in
the singular shall be deemed to include the plural and vice versa, and the
masculine gender shall be deemed to include the feminine gender.

1.3.1 "BOARD" or "BOARD OF DIRECTORS" shall mean the Board of
Directors of the Company.

1.3.2 "COMMITTEE" is defined in Section 1.4.

1.3.3 "COMMON STOCK" shall mean the common stock of the Company.

1.3.4 "COMPANY" shall mean JLM Industries, Inc., a Delaware
corporation, and any successor.

1.3.5 "EFFECTIVE DATE" is defined in Section 3.10.

1.3.6 "FAIR MARKET VALUE" of the shares of Common Stock shall
mean the closing price on the date in question (or, if no shares are traded on
such day, on the next preceding day on which shares were traded), of the Common
Stock as reported on the Composite Tape, or if not reported

<PAGE> 2

thereon, then such price as reported in the trading reports of the principal
securities exchange in the United States on which such stock is listed, or if
such stock is not listed on a securities exchange in the United States, the
mean between the dealer closing "bid" and "ask" prices on the over-the-counter
market as reported by the National Association of Security Dealers Automated
Quotation System (NASDAQ), or NASDAQ's successor, or if not reported on NASDAQ,
the fair market value of such stock as determined by the Committee in good
faith and based on all relevant factors.

1.3.7 "NSO" shall mean a nonqualified stock option granted in
accordance with the provisions of Article 2 of this Plan.

1.3.8 "NON-EMPLOYEE DIRECTOR" shall mean a member of the Board
of Directors of the Company who is not an employee of the Company or any
Subsidiary.

1.3.9 "OPTION" shall mean an NSO.

1.3.10 "OPTIONEE" shall mean a Non-Employee Director to whom an
Option is granted under the Plan.

1.3.11 "PLAN" shall mean the JLM Industries, Inc. Non-Employee
Directors' Stock Option Plan, as set forth herein and as amended from time to
time.

1.3.12 "SUBSIDIARY" shall mean any corporation that at the time
qualifies as a subsidiary of the Company under the definition of "subsidiary
corporation" contained in Section 424(f) of the Internal Revenue Code of 1986,
as amended.

1.4 ADMINISTRATION. The Plan shall be administered by a Committee
comprised of members of the Board (the "Committee"). The Committee shall have
all the powers vested in it by the terms of the Plan, such powers to include
authority (within the limitations described herein) to prescribe the form of
the agreement embodying awards of nonqualified stock options made under the
Plan. The Committee shall, subject to the provisions of the Plan, grant
Options and have the power to construe the Plan, to determine all questions
arising thereunder and to adopt and amend such rules and regulations for the
administration of the Plan as it may deem desirable. Any decision of the
Committee in the administration of the Plan, as described herein, shall be
final and conclusive. The Committee may act only by a majority of its members
in office, except that the members thereof may authorize any one or more of
their number or the Secretary or any other officer of the Company to execute
and deliver documents on behalf of the Committee. No member of the Committee
shall be liable for anything done or omitted to be done by such member or by
any other member of the Committee in connection with the Plan, except for such
member's own willful misconduct or as expressly provided by statute.

1.5 ELIGIBILITY REQUIREMENTS. Each Non-Employee Director shall be
eligible to receive Options in accordance with Article 2 below. The adoption
of this Plan shall not be deemed to give any director any right to or be
granted options to purchase Common Stock of the Company, except to the extent
and upon such terms and conditions as set forth in this Plan.

2.
<PAGE> 3

ARTICLE 2

TERMS AND CONDITIONS OF OPTIONS

2.1 GRANT. Options granted under the Plan shall be evidenced by an
agreement in such form as the Board shall prescribe from time to time in
accordance with the Plan and shall comply with the terms and conditions set
forth under this Article 2. The date of the Annual Meeting of Stockholders
shall be the date of grant of the Options.

2.2 NUMBER OF SHARES. Each Non-Employee Director shall receive an
Option for 1,000 shares of Common Stock upon his initial appointment to the
Board. In addition, each year, as of the date of the Annual Meeting of
Stockholders of the Company, each Non-Employee Director who has been reelected
or who is continuing as a member of the Board as of the adjournment of the
Annual Meeting shall automatically receive an Option for 1,000 shares of Common
Stock.

2.3 OPTION PRICE. The Option exercise price shall be the Fair Market
Value of the Common Stock on the date of the Annual Meeting of Stockholders.

2.4 METHOD OF EXERCISE. An Option may be exercised by a Non-Employee
Director during such time as may be permitted by the Option and the Plan by
providing written notice to the Board and tendering the purchase price in
accordance with the provisions of Section 2.5, and complying with any other
exercise requirements contained in the Option or promulgated from time to time
by the Board.

2.5 METHOD OF PAYMENT. Each Option shall state the method of
payment of the Option price upon the exercise of the Option. The method of
payment stated in the Option shall include payment (a) in United States dollars
in cash or by check, bank draft or money order payable to the order of the
Company, (b) in the discretion of and in the manner determined by the Board, by
the delivery of shares of Common Stock already owned by the Optionee, (c) by
any other legally permissible means acceptable to the Board at the time of the
grant of the Option (including cashless exercise as permitted under the Federal
Reserve Board's Regulation T, subject to applicable legal restrictions), or (d)
in the discretion of the Board, through a combination of (a), (b) and (c) of
this Section 2.5. If the option price is paid in whole or in part through the
delivery of shares of Common Stock, the decision of the Board with respect to
the Fair Market Value of such shares shall be final and conclusive.

2.6 TERM AND EXERCISE OF OPTIONS.

2.6.1 One hundred percent (100%) of the total number of shares
of Common Stock covered by the Option shall become exercisable beginning with
the first anniversary date of the grant of the Option and shall be exercisable
by the Non-Employee Director for a period of five (5) years from the date of
grant. Not less than one hundred (100) shares may be exercised at any one time
unless the number exercised is the total number at the time exercisable under
the Option.

2.6.2 Notwithstanding the foregoing, no Option or any part of
an Option shall be exercisable (a) before the Non-Employee Director has served
one term-year as a member of the Board since the

3.
<PAGE> 4

date such Option was granted (as used herein, the term "term-year" means that
period from one Annual Meeting to the subsequent Annual Meeting), (b) after the
expiration of five (5) years from the date the Option was granted, and (c)
unless written notice of the exercise is delivered to the Company specifying
the number of shares to be purchased and payment in full is made for the shares
of Common Stock being acquired thereunder at the time of exercise.

2.7 DEATH OR OTHER TERMINATION OF POSITION AS A DIRECTOR. Subject
to the provisions of Section 2.6 above:

2.7.1 In the event that a Non-Employee Director (a) is removed
as a director for dishonesty or violation of his fiduciary duty to the Company,
(b) voluntarily resigns under or followed by such circumstances as would
constitute a violation of his or her fiduciary duty to the Company, or (c)
commits an act of dishonesty not discovered by the Company prior to the
cessation of his or her services as a Non-Employee Director but that would
have resulted in his or her removal if discovered prior to such date, then
forthwith from the happening of any such event, any Option then held by him or
her shall terminate and become void to the extent that it then remains
unexercised.

2.7.2 If a person shall cease to be a Non-Employee Director
for any reason other than one or more of the reasons set forth in section
2.7.1, such person, or in the case of death, the executors, administrators or
distributees, as the case may be, may, at any time prior to the date of the
expiration of the Option, exercise the Option with respect to any shares of
Common Stock as to which such person has not exercised the Option on the date
the person ceased to be such a Non-Employee Director.

2.7.3 In the event any Option is exercised by the executors,
administrators, legatees or distributees of the estate of a deceased Optionee,
the Company shall be under no obligation to issue Common Stock thereunder
unless and until the Company is satisfied that the person or persons exercising
the Option are the duly appointed legal representatives of the deceased
Optionee's estate or the proper legatees or distributees thereof.

2.8 TRANSFERABILITY OF OPTIONS. The Option shall not be transferable
by the Optionee otherwise than by will or the laws of descent and distribution,
and shall be exercisable during his lifetime only by him.

2.9 DELIVERY OF CERTIFICATES REPRESENTING SHARES. As soon as
practicable after the exercise of an Option, the Company shall deliver, or
cause to be delivered, to the Non-Employee Director exercising the Option, a
certificate or certificates representing the shares of Common Stock purchased
upon the exercise. Certificates representing shares of Common Stock to be
delivered to a Non-Employee Director shall be registered in the name of such
director.

2.10 RIGHTS AS A STOCKHOLDER. A Non-Employee Director shall have no
rights as a stockholder with respect to any shares of Common Stock covered by
his or her Option until the date on which he or she becomes a record owner of
the shares purchased upon the exercise of the Option (the "record ownership
date"). No adjustment shall be made for dividends (ordinary or extraordinary,

4.
<PAGE> 5

whether in cash, securities or other property), distributions, or other rights
for which the record date is prior to the record ownership date.

ARTICLE 3

MISCELLANEOUS

3.1 STOCK ADJUSTMENTS.

3.1.1 In the event of any increase or decrease in the number
of issued shares of Common Stock resulting from a stock split or other division
or consolidation of shares or the payment of a stock dividend (but only on
Common Stock) or any other increase or decrease in the number of such shares
effected without any receipt of consideration by the Company, then, in any such
event, the number of shares of Common Stock that remain available under the
Plan, the number of shares of Common Stock covered by each outstanding Option,
and the purchase price per share of Common Stock covered by each outstanding
Option shall be proportionately and appropriately adjusted for any such
increase or decrease.

3.1.2 Subject to any required action by the stockholders, if
any change occurs in the shares of Common Stock by reason of any
recapitalization, reorganization, merger, consolidation, split-up, combination
or exchange of shares, or of any similar change affecting the shares of Common
Stock, then, in any such event, the number and type of shares covered by each
outstanding Option, and the purchase price per share of Common Stock covered by
each outstanding Option, shall be proportionately and appropriately adjusted
for any such change. A dissolution or liquidation of the Company shall cause
each outstanding Option to terminate.

3.1.3 In the event of a change in the Common Stock as presently
constituted that is limited to a change of all of its authorized shares with
par value into the same number of shares with a different par value or without
par value, the shares resulting from any change shall be deemed to be shares of
Common Stock within the meaning of the Plan.

3.1.4 To the extent that the foregoing adjustments relate to
stock or securities of the Company, such adjustment shall be made by, and in
the discretion of, the Committee, whose determination in that respect shall be
final, binding and conclusive. Except as hereinabove expressly provided in this
Section 3.1, a Non-Employee Director shall have no rights by reason of any
division or consolidation of shares of stock of any class or the payment of any
stock dividend or any other increase or decrease in the number of shares of
stock of any class or by reason of any dissolution, liquidation, merger or
consolidation, or spin-off of assets or stock of another corporation; and any
issuance by the Company of shares of stock of any class, securities convertible
into shares of stock of any class, or warrants or options for shares of stock
of any class shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Common Stock subject to
the Option.

5.
<PAGE> 6

3.1.5 The existence of the Plan and the grant of any Option
pursuant to the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure or to merge or to consolidate, or to
dissolve, to liquidate, to sell, or to transfer all or any part of its business
or assets.

3.2 LISTING AND REGISTRATION OF COMMON STOCK. Each Option shall be
subject to the requirement that if at any time the Board shall determine, in
its discretion, that the listing, registration or qualification of the shares
of Common Stock covered thereby upon any securities exchange or under any state
or federal laws, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in connection with, the
granting of such Option or the issuance or purchase of shares thereunder, such
Option may not be exercised unless and until such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board. Notwithstanding anything in the
Plan to the contrary, if the provisions of this Section become operative, and
if, as a result thereof, the exercise of an Option is delayed, then and in that
event, the term of the Option shall not be affected. Notwithstanding the
foregoing, or any other provisions in the Plan, the company shall have no
obligation under the Plan to cause any share of Common Stock to be registered
or qualified under any federal or state law, or listed on any stock exchange or
admitted to any national market system.

3.3 NO IMPLIED RIGHTS TO DIRECTORS. Except as expressly provided
for in the Plan, no Non-Employee Director or other person shall have any claim
or right to be granted an Option under the Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any Non-Employee Director
any right to be retained in the service of the Company.

3.4 TERM OF THE PLAN. The Plan shall terminate upon the earlier of
the dates or events to occur: (a) upon the adoption of a resolution of the
Board terminating the Plan; or (b) ten years from the Effective Date.

3.5 AMENDMENT OF THE PLAN; TERMINATION. The Board may, insofar as
permitted by law, from time to time, with respect to any shares of Common Stock
at the time not subject to Options, suspend, discontinue or terminate the Plan
or revise or amend it in any respect whatsoever.

3.6 APPLICATION OF FUNDS. The proceeds received by the Company from
the sale of Common Stock pursuant to Options will be used for general corporate
purposes.

3.7 NO OBLIGATION TO EXERCISE. The granting of any Option under the
Plan shall impose no obligation upon any Optionee to exercise such Option.

3.8 NO IMPLIED RIGHTS TO DIRECTORS. Except as expressly provided for
in the Plan, no Non-Employee Director or other person shall have any claim or
right to be granted an Option under the Plan. Neither the Plan, nor any action
taken hereunder, shall be construed as giving any Non-Employee Director any
right to be retained as a Director or in any other capacity.

6.
<PAGE> 7

3.9 WITHHOLDING. Whenever the Company proposes or is required to
issue or transfer shares of Common Stock under the Plan, the Company shall have
the right to require the Optionee to remit to the Company an amount sufficient
to satisfy any federal, state or local withholding tax liability prior to the
delivery of any certificate or certificates for such shares. Whenever under
the Plan payments are to be made in cash, such payments shall be made net of an
amount sufficient to satisfy any federal, state or local withholding tax
liability.

3.10 CONDITIONS PRECEDENT TO EFFECTIVENESS. The Plan shall become
effective upon the satisfaction of all the following conditions, with the
Effective Date of the Plan being the date that the last such condition is
satisfied:

3.10.1 the adoption of the Plan by the Board of Directors; and

3.10.2 the closing of the initial public offering of the
Company's Common Stock.

<PAGE> 1
EXHIBIT 10.37

ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption Agreement ("Assignment"), made effective as
of November 3, 1992, is entered into by and between Ashland Chemical, Inc. an
Ohio corporation, 5200 Blazer Parkway, Dublin, Ohio 43017 ("Assignor"), and JLM
Terminals, Inc., a North Carolina corporation, having an address of 22
Gatehouse Road, Stamford, Connecticut 06902 (reassigned).

WHEREAS, by a certain Option to Purchase Agreement effective as of February
28, 1992, between Unocal Oil Company of California ("Unocal") and Assignor, as
amended, attached hereto as EXHIBIT A (the adoptions), Unocal granted to
Assignor an irrevocable and exclusive right and option to purchase property
known as the Cape Fear Terminal, as more particularly described in the Option as
Tracts 1 through 7, together with all easements, appurtenances and other rights
pertaining thereto and the buildings, improvements and fractures located thereon
(the Property); and

WHEREAS, Assignor desires to assign and delegate to Assignee and Assignee
desires to accept assignment and delegation of such Option as it pertains to the
Property and, except as Otherwise provided herein, all duties and obligations of
Assignor under such Option as it pertains to the Property;

NOW, THEREFORE, in consideration of the mutual obligations contained herein
and other good and valuable consideration, the receipt of which is hereby
acknowledged by Assignor, the parties hereto agree as follows:

1. Definitions. Unless otherwise defined herein, capitalized terms that
are defined in the Asset Purchase Agreement between Unocal and Assignor, dated
as of February 14, 1992, as amended by: (i) Amendment dated as of February 28,
1992, (ii) Second Amendment dated March 25, 1992, (iii) Third Amendment dated
April 10, 1992, and Fourth Amendment dated October 30, 1992 (the Asset Purchase
Agreement.), are used with the meanings ascribed to them in the Asset Purchase
Agreement.

2. Assignment. (a) Assignor hereby assigns to Assignee, and Assignee
hereby accepts, all of Assignor's right and interest to acquire the Property
under the Option and the previsions of the Asset Purchase Agreement that are
incorporated by reference into the Option, but not the right to acquire the real
estate and improvements identified as Tract No. 8 of Parcel B therein and the
easements pertaining to Tract 8 as described in the Option, commonly known as
the Carolina Terminal of Unocal (the Carolina Terminal.) or any obligations of
Assignor with respect to the Carolina Terminal, to have and to hold the same
unto the Assignee, its successors and administrators and assigns, forever,
subject, nevertheless, to the terms, conditions and stipulations in this
Assignment or the Option.

(b) In furtherance of the exercise of said Option, Assignor also
hereby assigns to Assignee all of the Assignor's right, title and interest in
and to the benefits of all representations, warranties and covenants of Unocal
and all conditions and other provisions

<PAGE> 2

arising under the Asset Purchase Agreement and the Option as they pertain to the
Assignee or the Property, including all causes of action and all other rights,
powers or interests of Assignor under the Asset Purchase Agreement and Option to
the extent relevant to the Assignee or the Property.

3. Assumption. Assignee hereby assumes and agrees to perform and observe
the obligations of Assignor under the Option (and under the Asset Purchase
Agreement that are incorporated by reference into the Option as they pertain to
the Assignee or the Property), except as otherwise provided in this Assignment.

(a) Assignee does not assume any obligation of Assignor under the
Option or the Asset Purchase Agreement pertaining to the Carolina Terminal or
any property other than the Property.

(b) Assignee does not assume any obligation of Assignor arising under
the Asset Purchase Agreement identified in Section 4 of this Agreement except as
provided in Section 4.

(1) The provisions of Section 4(a) and 4(b) of the Option
applicable to the period prior to Assignee's acquisition of the Property
following the exercise of the Option (the "Acquisition Date"). Assignor agrees
to pay any amount otherwise due to Unocal pursuant to such provisions, so that
Unocal will not have the power, under Section 4(b) of the Option, to terminate
Assignee's right to acquire the Property.

(2) Assignee does not assume any of Assignor's obligations under
Section 4(c) of the Option except with respect to obligations of the Assignor
under the Asset Purchase Agreement that are assumed by Assignee pursuant to this
Section 3.

(3) Assignee does not assume any of Assignor's obligations under
Section 8 of the Option, all of which shall remain the obligations of Assignor,
except to the extent assumed by Assignor pursuant to this Section 3.

(d) Assignee does not assume any obligation of Assignor under any
Related Agreement except obligations under the Option expressly assumed by
Assignee elsewhere in this Assignment. Notwithstanding anything to the contrary
herein, Assignee does not assume any obligation of Assignor arising under the
Operating Agreement.

(e) Assignee expressly assumes all Obligations of Assignor, if any,
under any leases or other agreements identified in Schedule 1 hereto (the
"Contracts").

- 2 -

<PAGE> 3

4. Indemnification by Assignor.

(a) Assignor agrees to defend, indemnify, and hold Assignee, its
Affiliates and their respective directors, officers, employees and agents (each,
an "Assignee Indemnitee") harmless from any cost, expense or liability arising
from the imposition on an Assignee Indemnitee or the Property of any obligations
or liabilities of Assignor under the Option or the Asset Purchase Agreement
(collectively, "the Obligations") that Assignor expressly has retained under
Section 3 hereof or are identified in Section 4(b) hereof.

(b) The Asset Purchase Agreement, the applicable portions of which are
incorporated by reference into the Option, imposes certain Obligations on
Assignor as "Purchasers, as defined therein. In addition to the Obligations
retained by Assignor as provided elsewhere herein, Assignee does not assume and
Assignor expressly retains, and will hold the Assignee Indemnitees harmless from
and indemnify the Assignee Indemnitees for any cost, expense or liability from,
the application to an Assignee Indemnitee or any of its Affiliates of the
following provisions of the Asset Purchase Agreement that pertain to the
"Purchasers as defined in the Asset Purchase Agreement.

1. Section 2.2(a)(i),(vi)(viii) and (x).

2. Section 2.4(b)(i), as to Material Contracts relating to Assets
other than the Property.

3. Section 2.4(b)(ii) with regard to Environmental Compliance Costs
pertaining to Assets other than the Property.

4. Section 2.4(b)(iii) with respect to any Costs of Taking Category
B Property Out of Service.

5. Section 2.4(b)(v), except as to (i) Section 9.3 as applicable to
the Property, (ii) Section 9.4 as applicable to the Property
and (iii) as further subject to Section 19 hereof.

6. Section 2.4(b)(vi)(E) as to any Related Agreement other than the
Option, as limited by this Assignment.

7. Section 2.4(b)(vi)(F) and (G), except to the extent applicable
to the Property.

8. Section 2.4(b)(vi)(K), except to the extent applicable to the
Property.

9. Section 2.4(b)(vi)(L), except to the extent applicable to the
Property.

10. Section 2.4(c), except to the extent applicable to the Property.

11. Section 2.6, except with respect to Environmental Cleanup
Liabilities relating to the Property.

12. The provisions of Article Four do not apply to Assignee.

13. Section 5.2, except to the extent applicable to the Property.

14. Section 5.3, except to the extent applicable to the Property.

15. Section 5.4, except to the extent the provisions pertain to the
Property.

16. Section 5.5, except with respect to Permits used in connection
with the Property.

17. Section 5.7.

18. Section 6.2, except to the extent applicable to the Property.

19. Section. 7.1(b), except to the extent applicable to the Property.

- 3 -

<PAGE> 4

20. Section 7.3(a), except as to any representations, or warranties
or certificates made or given by Assignee to Unocal in
connection with Assignee's acquisition of the Property, or any
covenant expressly assumed by Assignee elsewhere in this
Agreement.

21. Section 7.3(b), except with respect to Assignee's use of or
conduct under any Permit provided to Assignee by Unocal.

22. Section 7.3(c), except to the extent applicable to the Property.

23. Section 7.3(d)(i), except to the extent applicable to the
Property.

24. Section 7.3(d)(ii), except to the extent applicable to the
Property.

25. Section 7.3(e), except for Taxes relating to the Property that
relate to periods after the Acquisition Date.

26. Section 7.3(f).

27. Section 7.3(g), except with respect to the conduct of Assignee
and its agents, employees or contractors in performing this
Assignment or the Option.

28. Section 7.3(h), except to the extent applicable to the Property.

29. Section 9.1.

30. Section 9.2, as to any Related Agreement other than the Option,
as limited by this Assignment.

31. Section 9.3, except with respect to the Property.

32. Section 9.4, except with respect to the period after the
Acquisition Date.

33. Section 9.5, except with respect to the Contracts.

34. Section 9.8, ss.9.9, ss.9.10.

35. Section 9.11, except with respect to the Property.

36. Section 9.12, except returns required to be filed and taxes
attributable to any time after the Acquisition Date.

37. Section 9.14.

38. Section 10.4, except with respect to Confidential Information
related to the Property and disclosed by Assignee or its
Affiliates.

39. Section 10.5, as to any Related Agreement other than the Option,
as limited by this Assignment.

40. Any Obligations arising under Article Eleven or Article Twelve

5. Disclaimer. Assignor makes no representation or warranty, express or
implied, with respect to the condition of the above described Property, or any
improvement, building, structure, facilities, tenements thereon and
appurtenances thereto belonging or in any wise appertaining to said Property, or
otherwise, its merchantability, or its fitness for Assignee's intended use.

6. Information. Assignor makes no representation or warranty as to the
accuracy or completeness of any survey, title abstracts, title examinations or
reports, structural or environmental surveys or reports, or other data or
information, delivered by Assignor to Assignee. Assignee acknowledges its
reliance on the accuracy or completeness of any portion of such data or
information is at its own risk.

7. Indemnification By Assignee. As part of the consideration for the
assignment of the above Option, Assignee will fully defend, protect, indemnify,
hold harmless, and

- 4 -

<PAGE> 5

render whole Assignor, its Affiliates and their respective directors, officers
and agents (each an Assignor Indemnitee"), from and against each and every
claim, demand or cause of action, and any liability, cost, expense (including,
but not limited to, reasonable attorneys fees), damage or loss in connection
therewith, which may be made or asserted by Assignee, its agents, or successors,
or by any third party or parties (including, but not limited to, governmental
agencies) by reason of (i) Assignee's failure to observe and perform its
obligations under the Option or this Assignment, or its obligations under the
Asset Purchase Agreement assumed by this Assignment that results in a claim
against an Assignor Indemnitee pursuant to Section 7.3(h) of the Asset Purchase
Agreement, or (ii) on account of personal injury or death, or property or
environmental damage, contamination, pollution or adverse effects on the
environment, including the cost of remediation or clean-up related to any
operations conducted thereon or ownership of the Property, that are caused by or
arise out of Assignee's use or ownership of the Property after the Acquisition
Date.

8. Survival. The obligations of Assignor and Assignee under this
Assignment will survive Assignee's exercise of the Option and any closing on the
Property.

9. Successors and Assigns. The Option shall not be assignable by Assignee
without Assignor's prior written consent, which consent may be withheld for any
reason whatsoever. Subject to the provisions of this paragraph, the Option and
this Assignment will be binding upon the parties hereto and their respective
successors and assigns.

10. No Recourse. In the event the Option is exercised by Assignee and for
any reason Unocal fails to perform any of its obligations under the Option,
those provisions of the Asset Purchase Agreement assigned by Assignor to
Assignee, or otherwise, Assignor shall have no liability to Assignee, its
successors or assigns, and Assignee shall have no recourse against Assignor, its
successors and assigns, for such failure to perform.

11. Integration. This Assignment is intended by the parties as the final,
complete and exclusive statement of the terms and conditions of their agreement
and is intended to supersede all previous agreements and understandings between
the parties relating to its subject matter. No prior stipulation, agreement,
understanding or course of dealing between the parties or their agents with
respect to the subject matter of this Assignment shall be valid or enforceable
unless embodied in this Assignment. No amendment, modification or waiver of any
provisions of this Assignment shall be valid or enforceable unless in writing
and signed by the party to be charged. Nothing in this agreement shall be
binding upon either party until this agreement has been executed and delivered
by both parties.

12. Severability. If any provision of this Assignment, or the application
of any such provision to any person or in any circumstance is held invalid, the
application of such provision to any other person or in any other circumstance,
and the remainder of this Assignment, shall not be affected thereby and shall
remain in full force and effect.

13. Counterparts. This Assignment may be executed in multiple counterparts
and each counterpart shall be deemed an original.

-5-
<PAGE> 6

14. Recordation. Neither party may record this Assignment.

15. Brokers. Assignor warrants that Assignee will not incur any liability
for any claim of any broker or other party engaged by Assignor or its Affiliates
in connection with this assignment of the Option and Assignor will defend and
hold Assignee harmless from any such claim.

16. Environmental Compliance Costs. Assignee acknowledges that the
obligations of Unocal to indemnify for Environmental Compliance Costs do not
apply to the Property and Assignee agrees not to assert any claim therefor that
would affect the indemnification obligations of Unocal to Assignor for
Environmental Compliance Costs unless Assignee indemnifies Assignor for any loss
to Assignor or limitation of Unocal's obligations to Assignor for Environmental
Compliance Costs resulting from such claim by Assignee.

17. Environmental Claims. Assignee acknowledges that Unocal's obligation
to indemnify Assignor for certain Environmental Claims or certain other claims
is limited under Section 7.1 (c)(iv) of the Asset Purchase Agreement. Assignee
agrees to indemnify Assignor for any loss of or limitation in Unocal's
obligation to indemnify Assignor for claims limited by such Section 7.1(c)(iv)
that result from any claim brought against Unocal by Assignee.

18. Cooperation. It is Assignor's intent that, by this Assignment,
Assignee will have all rights and powers to bring actions and enforce remedies
against Unocal that Assignor would have if Assignor exercised the Option and
acquired the Property, subject to the express limitations contained herein. If
Assignor is a necessary party in interest with respect to any action or redress
sought by Assignee under the Option or the Asset Purchase Agreement (because of
privily or otherwise), Assignor agrees to take actions reasonably requested by
Assignee from time to time, including the commencement and persecution of
actions, at Assignee's sole cost and expense. Without limiting the foregoing,
Assignor agrees that on request of Assignee it will in good faith take such
actions reasonably required by Assignee, at Assignee's expense, to provide to
Assignee the practical benefits of all representations, warranties and covenants
of Unocal applicable to the Property and contained in the Asset Purchase
Agreement or any other document delivered by Unocal to Assignor in connection
therewith, including the Operating Agreement pertaining to the Property and the
opinion of Unocal counsel delivered in connection with the closing under the
Asset Purchase Agreement.

19. Certain Allocations. The Asset Purchase Agreement calls for the
"Purchaser" to incur obligations for certain taxes, assessments and governmental
charges, utility bills and certain operating expenses with respect to Category B
Property as of the Effective Time. Assignor agrees that Assignee's obligations
for any such items relating to the Property shall be limited to the portion
accruing after the Acquisition Date. Assignee agrees to assume the obligation to
submit invoices to Unocal for Unocal's portion of such items for periods prior
to the Effective Time, as required by the Asset Purchase Agreement. However, if
Unocal disputes its liability for any such expense for any time prior to the
Acquisition Date, Assignor will pay such amount promptly upon request of
Assignee and Assignor shall pursue reimbursement from Unocal.

- 6 -

<PAGE> 7

20. Reporting. If Assignee exercises the Option and acquires the Property,
Assignee will provide to Assignor from Acquisition Date copies of any notices,
or notify Assignor of any oral notices, it has provided to federal, North
Carolina, or local environmental or emergency management and response agencies,
regarding releases, spills, discharges or emissions of oil, hazardous
substances, hazardous materials, hazardous wastes, or toxic substances, which
notices it is required to provide under any federal, North Carolina, or local
environmental law or regulation, and which pertain to the Property.
Additionally, Assignee will provide to Assignor copies of any notifications of
noncompliance it has provided to federal, North Carolina or local environmental
agencies required under the terms of any permit, judicial or administrative
order, or regulation, as such notifications pertain to the Property, and any
notice regarding environmental damage, contamination, pollution or adverse
effect that it is required to provide to Unocal under the terms of any agreement
it enters or has entered with Unocal, regarding the Property. Furthermore,
Assignee shall provide to Assignor notice of any and all planned or completed
remediation or clean-up of the Property required by any federal, North Carolina
or local environmental law or regulation. The aforesaid notices shall be
forwarded to Assignor in a timely manner, no later than 48 hours following the
notification of the governmental agency or Unocal.

21. Indemnification Notices and Procedures. (a) A party entitled to
indemnification under either Section 4 or Section 7 hereof is referred to herein
as an "Indemnified Party; a party against whom indemnification is sought is
referred to herein as an "Indemnifying Party"; and a Claim for which
indemnification is sought pursuant to such sections is referred to as a "Claim".

(b) An Indemnified Party seeking indemnification hereunder shall
provide written notice of such Claim to the Indemnifying Party. If the Claim
results from any claim, demand, defense or assertion by a third party, the
Indemnified Party will give the Indemnifying Party notice of such claim as
promptly as is practical after receipt by the Indemnified Party of notice from
such third party, specifying the nature and amount of the Claim to the extent
reasonably feasible (which amount shall not be conclusive of the final amount of
the demand or claim) but the failure to notify the Indemnifying Party will not
relieve the Indemnifying Party from any liability under this Assignment unless
the omission actually prejudices the rights and positions of the Indemnifying
Party, and then only to such extent of the effect of such prejudice.

(c) If an action is brought against an Indemnified Party and it
notifies the Indemnifying Party of the commencement in accordance with this
Section 21, the Indemnifying Party will assume the defense of the Indemnified
Party or take action to avoid any liability imposed upon an Indemnified Party
that is the subject of the Claim. The Indemnified Party may participate in any
defense, or take any action the Indemnified Party deems appropriate, at its
expense. The Indemnifying Party shall given written notice of its assumption of
defense of such claim of the Indemnified Party. If the Indemnified Party assumes
the defense of such Claim, the Indemnified Party will not settle such dispute
without the consent of the Indemnifying Party, which consent will not be
unreasonably withheld. An Indemnifying Party defending against a Claim may not
enter into a settlement that does contain an absolute and unconditional release
of the Indemnified Party, without the

- 7 -

<PAGE> 8

Indemnified Party's consent, which shall not be unreasonably withheld. Both the
Indemnifying Party and the Indemnified Party will cooperate with the other in
connection with the defense of third party actions subject to the
indemnification provisions of this Assignment.

22. Notices. Any notices to be given to a party under this Assignment
shall be given in writing either delivered by hand, sent by certified or
registered mail; or by facsimile, as follows (except as subsequently changed by
written notice of a party to the other), and shall be effective upon receipt

To Assignor

Ashland Chemical, Inc.
5200 Blazer Parkway
Dublin, Ohio 43017
Attn: President
Fax: (614) 889-4268

with a copy to

Ashland Chemical, Inc.
5200 Blazer Parkway
Dublin, Ohio 43017
Attn: General Counsel
Fax: (614) 889-4268

To Assignee

JLM Terminals, Inc.
22 Gatehouse Road
Stamford, Connecticut 06902
Attn: President
Fax: (203) 348-6837

23. Governing Law. This Assignment shall be governed by the laws of the
State of North Carolina.

24. Waiver and Amendments. No waiver of any portion of the Assignment
shall be deemed to have been made by any party of any its rights unless
evidenced by written notice that expressly refers to the matter to be waived and
is signed on behalf of the party. Any such waiver shall constitute a waiver only
with respect to the specific matter described in such writing and shall in no
way impair the rights of the party granting the waiver in any other respect or
at any other time. This Assignment shall not be amended or modified except by an
instrument in writing signed by the party against whom the enforcement is
sought.

- 8 -

<PAGE> 9

25. Time Computation. In the computation of any period of time provided
for in this Assignment or by law, the day of the act or event from which such
period of time then shall be excluded and the last day of such period shall be
included, unless it is not a business day, in which case the period shall be
deemed to run into the next day which is a business day. The term "business days
as used here means a calendar day other than a Saturday, Sunday or legal holiday
observed by national banks located in the State of Ohio.

26. Payment. In exchange for this Assignment, Assignee shall pay the
following amounts to Assignor, by check or wire transfer (as Assignor might
request):

(i) One Hundred Fifty Thousand Dollars ($150,000.00) upon execution
and delivery of this Assignment by Assignor; and

(ii) One Hundred Fifty Thousand Dollars ($150,000.00) on or
before 90 days from the date hereof.

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

- 9 -

<PAGE> 10

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

ASSIGNOR

ATTEST ASHLAND CHEMICAL, INC.

/s/Charles Saunders Jr. By:/s/Phillip D. Ashbettle
- ------------------------------- -------------------------------
(Corporate Seal) Title:Group V.P.
-------------------------

ASSIGNEE

ATTEST JLM TERMINALS, INC.

/s/ By:John T. White
- ------------------------------- -------------------------------
(Corporate Seal) Title:President
-------------------------

- 10 -
<PAGE> 11

SCHEDULE 1
<TABLE>

CONTRACTS RELATING TO CAPE FEAR TERMINAL
<S> <C>
1. Agreement between Gulf Oil Corporation and Unocal recorded in Book 1172,
Page 332, New Hanover County Registry (the Registry).

2. Easement(s) to Carolina Power and Light Company recorded in Book 1178,
Page 1496, Book 834, Page 134 and Book 1019, Page 531 in the Registry.

3. Easement and side track agreement with Atlantic Coast Line Railroad
Company recorded in Book 656, Page 55 in the Registry.

4. Unrecorded docking agreement between Unocal, Gulf Oil Company and ATC
Petroleum, Inc. dated September 5, 1975.

5. Terminalling Agreement between Unocal and Wright Chemical Corporation
dated March 9, 1983.

6. Terminal Storage and Service Agreement between Unocal and Ocelot
Chemical Corporation dated August 1, 1989, as amended effective June 29,
1990.

7. Any obligations arising under the Agreement dated as of October 1, 1984
between A. Johnson Energy Marketing, Inc., d/b/a ATC Petroleum, Inc.,
and Pace Oil Co., Inc.
</TABLE>

- 11 -
<PAGE> 12

EXHIBIT A

OPTION TO PURCHASE AGREEMENT
WILMINGTON, NC

For good and valuable consideration cash in hand paid, receipt of which is
hereby acknowledged, by payment made pursuant to the Asset Purchase Agreement,
between Union Oil Company of California and Ashland Chemical, Inc., dated as of
February 14, 1992 ("Asset Purchase Agreement") Union Oil Company of California,
at P.O. Box 7600, Los Angeles, California 90051, Attention: Vice President,
Corporate Budgets, Planning and Economics, Fax No. (213) 977-7468 ("Unocal"),
HEREBY GRANTS to Ashland Chemical, Inc., an Ohio corporation, with a mailing
address of 5200 Blazer Parkway, Dublin, Ohio 43017, Attention: Real Estate
Department, Fax. No. (606) 264-7869 ("Purchaser") or its assignee, THE
IRREVOCABLE AND EXCLUSIVE RIGHT AND OPTION TO PURCHASE ("Option") the Property
comprised of two parcels, Parcel A being Tract Nos. 1, 2, 3, 4, 5, 6 and 7;
Parcel B being Tract No. 8, now owned by Unocal and described below, together
with the buildings, improvements, appurtenances, and fixtures located on such
land ("Property"). This Option may also be exercised in respect to only one of
the two parcels; provided however, that, the Property is by law divisable and
the single parcel may be sold in accordance with all applicable legal
requirements.

PARCEL A

Tract No. 1.

Beginning at the intersection of the Northern line of Wright Street with
the Western line of Surry Street, and running thence Northwardly along
said line of Surry Street 166 feet; thence Southwardly 79(degree) 30' West
to the low water mark of the Cape Fear River; thence the same course
continued to the line of anchor piles approximately 100 feet east of the
Harbor line or channel or said River; thence Southwardly with the Easterly
line of said line of anchor piles to a point where the Northerly line of
Wright Street, if extended westwardly, would intersect said line of anchor
piles; thence with the line of said extended street Eastwardly to the mean
water line of the Cape Fear River, and thence the same course continued
Eastwardly and along the Northern line of Wright Street 626.5 feet to the
beginning. Same being part of lots 4, 5 and 6 in Block 29, according to
the official plan of the City of Wilmington, North Carolina, together with
all that portion of the wooden building that extends into Surry Street and
also together with all riparian rights appurtenant to the lands described
above. Together with an easement 15 feet in width, across the property
adjacent to Tract No. 1 described above for the maintenance of a pipeline
connecting the above-described terminal property with the smaller terminal
property lying on the North side of Wooster Street (Tract No. 8), which
right-of-way easement is more particularly described in a right-of-way
grant from BP Oil Corporation dated November 17, 1970 and recorded in Book
897 at Page 778 of the New Hanover County Registry, reference to which is
hereby made for a more particular description.

<PAGE> 13

Tract No. 2.

Beginning at a point in the Southern line of Wright Street twenty-four
(24) feet westwardly from the intersection of the said southern line of
Wright Street with the Western line of Surry Street (if Surry Street were
opened according to the official plan of the City of Wilmington), the said
beginning point being four hundred and twenty (420) feet westwardly from
the intersection of the said Southern line of Wright Street with the
Western line of Front Street; and runs thence from the said beginning
point, southwardly and parallel with Front Street three hundred and
ninety-six (396) feet to the northern line of Meares Street; thence
westwardly and along the said Northern line of Meares Street, extended
Westwardly six hundred and sixty-two (662) feet to an iron pipe on the
river bank; thence continuing the same course, that is an extension
westward of the Northern line of Meares Street, about four hundred and two
(402) feet more or less to the line of anchor piles approximately 100 feet
east of the Harbor line or channel of the Cape Fear River; thence
northwardly, along said line of anchor piles, about four hundred and
seventeen (417) feet more or less to the Southern line of Wright Street
extended westward; thence eastward along the said Southern line of Wright
Street (extended westward) about three hundred and thirty-four (334) feet
to an iron pipe on the bank of the river; thence continuing eastward with
the said Southern line of Wright Street Six Hundred and Seven (607) feet
more or less to the point of beginning; saving and excepting from the
operation of this instrument a strip of land fifteen (15) feet wide
running along and with the eastern boundary line above mentioned from
Meares Street Northwardly to Wright Street and parallel with Front Street,
the same to be forever kept open for use of the public as an alley way;
the same being the western part of lots 1, 2, 3, 4, 5 and 6 in block 15,
according to the official plan of the City of Wilmington, N.C., and the
major part of said block.

Tract No. 3.

An undivided one-half (1/2) interest in that tract of land beginning at
the Northwesternly corner of Block 16, as same is shown upon the official
plan of the City of Wilmington, North Carolina, and running thence from
said beginning point Southwardly and along the Westernly boundary line of
said Block 16 198 feet; thence Westwardly and parallel with Wright Street
66 feet to the Easternly boundary line of Block 15, according to the said
plan of said City; and running thence Northwardly and along the said
Easternly boundary line of said Block 15 198 feet to the Southernly line
of said Block 15 198 feet to the Southernly line of Wright Street, the
Northeasternly corner of said Block 156, running thence Eastwardly and
along the Southernly line of Wright Street 66 feet to the Northwesternly
corner of said Block 16, the point of Beginning.

Tract No. 4.

<PAGE> 14

Eastern line of Surry Street; thence Northwardly along the Eastern line of
Surry Street One Hundred Ninety-Eight (198) feet to the Southern line of
Wright Street; thence Eastwardly along the Southern line of Wright Street
Three Hundred Thirty (330) feet to the point of beginning; the same being
all of Lots 1, 2 and 3, in Block 16, according to the official plan of the
City of Wilmington, North Carolina. Together with all of the right, title
and interest of Cape Fear in and to all streets and ways in, on, through,
over, upon, adjacent to and adjoining said tract of land.

Tract No. 5.

An undivided one-half (1/2) interest in the tract of land beginning at the
point of intersection of the Western line of Surry Street with the
Southern line of Wright Street, and running thence Southwardly along the
Western line of Surry Street One Hundred Ninety-Eight (198) feet; thence
Westwardly and parallel with Wright Street Twenty-four (24) feet; thence
Northwardly and parallel with Surry Street One Hundred Ninety-eight (198)
feet to the Southern line of Wright Street; thence Eastwardly along the
Southern line of Wright Street Twenty-Four (24) feet to the point of
beginning; the same being the Eastern part of Lots 1, 2 and 3, in Block
15, according to the official plan of the City of Wilmington, North
Carolina. Together with all of the right, title and interest of Cape Fear
in and to all streets and ways in, on, through, over, upon, adjacent to
and adjoining said tract of land.

Tract No. 6.

Beginning at a point where the Northern line of Meares Street intersects
with the Western line of Front Street, and runs thence Northwardly with
the Western line of Front Street One Hundred and Ninety-eight (198) feet;
thence Westwardly parallel with Meares Street Pour Hundred and Twenty
(420) feet; thence Southwardly parallel with Front Street One Hundred and
Ninety-eight (198) feet to the Northern line of Meares Street; thence
Eastwardly with the Northern line of Meares Street Four Hundred and Twenty
(420) feet to the point of beginning. Being all of lots 4, 5 and 6, in
Block 16 and the east ends of lots 4, 5 and 6, in Block 15, according to
the official plan of the said City of Wilmington, North Carolina, together
with all and singular the lands, tenements, easements and appurtenances
thereunto belonging, or in anywise appertaining.

PARCEL B

Tract No. 7.

<PAGE> 15

extended; together with an undivided one-half interest in all properties,
improvements, structures and betterments situated thereon and in the riparian
rights in connection therewith; provided, however, this conveyance is without
warranty as to any portion of said strip which may constitute a part of
Marstellar, Meares or Wright Streets, or to any portion of said strip which lies
below the mean high water mark of the Cape Fear River.

Tract No. 8.

Beginning at a point in the northern line of Wooster Street, said point being a
nail in the concrete located south 87 degrees 30 minutes west 110 feet from the
intersection of the northern line of Wooster Street with the Wester line of
Surry Street according to the official plan of the City of Wilmington, and runs
thence north 02 degrees 30 minutes west and parallel with the western line of
Surry Street 132.0 feet to an old fence post; thence south 87 degrees 30 minutes
west and parallel with the northern line of Wooster Street 116.5 feet; thence
north 02 degrees 30 minutes west and parallel with the western line of Surry
Street 18.0 feet to an iron pipe; thence south 87 degrees 30 minutes west 529
feet, more or less, to the eastern harbor line of the Cape Fear River; said
point in said harbor line being 150 feet north of the north line of Wooster
Street measured at right angles; thence southwardly with the harbor line of the
Cape Fear River 150 feet, more or less, to where said harbor line is intersected
by the northern line of Wooster Street extended westwardly to said harbor line;
thence north 87 degrees 30 minutes east and along the northern line of Wooster
Street, portions of which have now been closed, 679 feet, more or less, to the
point of Beginning.

Together with a 20 foot joint use easement with the adjoining property owner on
the north described as follows:

Beginning at a point in Block 57 of the City of Wilmington that is located 150
feet northwardly from the northern line of Wooster Street and 243 feet west of
the western line of Surry Street, both measurements being made at right angles
to said street, and runs thence northwardly and parallel with the western line
of Surry Street 20 feet; thence westwardly parallel with the northern line of
Wooster Street to the Cape Fear River; thence southwardly along the Cape Fear
River 20 feet, more or less, to a point 150 feet north of the northern line of
Wooster Street, measured at right angles to said street; thence eastwardly and
parallel with the northern line of Wooster Street to the point of beginning.

Together with a right-of-way and easement 15 feet in width for the maintenance
of two-8 inch pipelines granted to Union Oil Company of California by BP Oil
Corporation by right-of-way grant recorded in Book 897, Page 778, New Hanover
County Registry. The location of said right-of-way was altered since the
original grant in 1969.

The foregoing property, together with the location of both easements above
described, are shown on survey for Union Oil Company of California dated March
S. 1974 by Robert H. Goslee, R.L.S., and recorded in Map Book 15 at Page 25 of
the New Hanover County Registry, and being Tracts 7 and 8 of the property
conveyed by Cape Fear Terminal

<PAGE> 16

Company to the Pure Oil Company by Deed dated April 19, 1958, and recorded
October 31, 1958, in Book 628, Page 492, New Hanover County Registry; and
being acquired by Union Oil Company by merger of the Pure Oil Company into
Union Oil Company of California effective August 12, 1965 and recorded in
Record of Incorporation Book "L", page 308, New Hanover County Registry.

This Option for the entirety of the Property and for a parcel will expire at
5:00 p.m. Eastern Standard Time on February 28, 1993 or upon prior written
notice by Purchaser.

If Purchaser exercises its Option to Purchase a parcel and the Property is
divisable, Purchaser will reimburse all costs associated with a subdivision of
the Property.

This Option may be exercised only by written notice, executed on behalf of the
Purchaser, and delivered to Unocal at the above address, on or prior to the
expiration date and time, with a copy faxed to Group Vice President, Industrial
Products Group, FAX No. (708) 619-2683 and such other persons to be notified
pursuant to the Asset Purchase Agreement. The notice shall specify a Closing
Date which, except as set forth in Section 6, shall not be more than thirty (30)
days after notice of the exercise of the Option is given.

In the event this Option is timely exercised, a sale and purchase agreement
shall exist on the teens and conditions herein and the applicable portions of
the Asset Purchase Agreement, the terms of which are incorporated herein by
reference.

1. Closing At the closing hereunder, Unocal shall deliver to Purchaser:

(a) A duly recorded Deed for the Property, substantially in the form of
Exhibit N to the Asset Purchase Agreement with a legal description
conveying that part of the Property purchased pursuant to an exercise of
this option.

(b) Actual possession of the Property, free, clear and discharged of
possession by any person, ordinary wear and tear excepted.

2. Conditions to Purchaser's Obligations Purchaser, at its sole discretion, may
cancel this Option prior to its exercise or termination. After Purchaser
exercises its option Purchaser may not cancel the Option or the sale and
purchase agreement and the parties hereto will use their best efforts to
close and transfer title pursuant to the terms set forth herein and in the
Asset Purchase Agreement.

3. Failure to Exercise Option If Purchaser fails to exercise this Option and
the Option expires, all consideration for this Option shall be retained by
Unocal as agreed liquidated damages in full settlement of any and all claims
for such failure to exercise.

<PAGE> 17

4. Taxes, Assessments, Charges

(a) If this Option is timely exercised, Purchaser shall reimburse Unocal
for all taxes, assessments, whether general or special, and governmental
charges of any kind whatsoever that might at any time have been lawfully
assessed or levied against with respect to this Property (excluding,
without limiting the generality of the foregoing, taxes levied upon or with
respect to the receipts, income or profits of Unocal and all other charges
in the form of a tax incurred in the maintenance and upkeep of this
property from the Effective Time until the exercise of this Option;
provided, that with respect to special assessments or other governmental
charges that may lawfully have been paid in installments over a period of
years, Purchaser shall be obligated to pay, or cause to be paid, only such
installments as are required to be paid from the Effective Time.

(b) Purchaser may, at its expense and in its own name and behalf, in good
faith contest any such taxes, assessments and other charges and in the event
of any such contest, may permit the taxes, assessments or other charges so
contested to remain unpaid during the period of such contest and any appeal
therefrom; provided that, Purchaser (i) gives Unocal written notice of its
intention so to do, (ii) diligently prosecutes any such contest, and (iii)
if requested by Unocal, in a penal amount of at least the sum of any such
tax, assessment or other charge so contested conditioned upon the payment,
if so adjudged, of the contested tax, assessment or other charge, together
with all interest and penalties accruing thereon, costs of suit and
reasonable attorneys fees, or other indemnity satisfactory to Unocal to the
same extent and if, provided further, Purchaser promptly pays any Judgment
enforcing the tax, assessment or other charge so contested. In the event
Purchaser shall fail to pay or cause to be paid any tax, assessment or
charge in accordance with the terms of this Section or fails to file any
notice or suit as required by law to protest any such tax, assessment or
other charge for a period of time in excess of ten (10) days after notice of
such failure, Unocal, may at its option by notice to Purchaser terminate
Purchaser's power to acquire any such parcel.

(c) Any time Purchaser is in breach of any duty, obligation, or promise of
it as set above or pursuant to the Asset Purchase Agreement or the Operating
Agreement and any such breach is not cured within seven (7) days after
Purchaser's receipt of notice of any such breach, Unocal may, at its sole
election but without obligation and in addition to any such other remedy it
may have pursuant to this Agreement or law, cure any such breach and/or pay
any amount to any third party to cure any such breach. In the event of any
such action as aforesaid by Unocal, the amount of all sums expended by
Unocal and interest thereon at the RAP Rate shall be due and owing.

5. General Provisions Any word or expression used in this Option defined in
Article 1 of the Asset Purchase Agreement shall have the same meaning as defined
in the Asset Purchase Agreement. The sections of the Asset Purchase Agreement
which may be applied to this Option are incorporated herein as applicable
sections and fully enforceable as though set forth herein. To the extent the
terms herein conflict with the Asset Purchase Agreement, the terms of the Asset
Purchase Agreement shall control. All provisions of the Asset Purchase Agreement
that

<PAGE> 18

apply to the conveyance of title of a Category A Property shall apply to the
conveyance of this Category B Property.

6. Conveyance of Title Title shall be conveyed by the respective forms of Deeds
for the Property substantially as set forth in Schedule N of the Asset Purchase
Agreement with a legal description conveying that part of the Property purchased
pursuant to an exercise of this Option. Unocal shall not be required to convey
title to any Property if such conveyance would violate any law or is otherwise
prohibited. In the event of a delay in the transfer of title to this Property at
the time this Option is exercised, Unocal shall diligently pursue the necessary
approvals to permit a conveyance of title to the Purchaser. If governmental
approval is denied, the parties, unless otherwise agreed to in writing by the
parties, shall cancel the Option and each shall be released of any duty or
obligation hereunder. The duties and obligations set forth in the Asset Purchase
Agreement, allocating environmental liabilities, shall not be altered by the
provisions contained herein.

7. Memorandum of Option Upon notice of either party to the other, the parties
shall execute a Memorandum of Option to Purchase in the form of Attachment "A"
attached to this Option to Purchase. The party requesting the other party to
execute the memorandum shall pay all costs, fees, and taxes to have it recorded.

8. Cost and Expenses During the term of this Option Purchaser shall pay all
costs and expenses to be paid by Purchaser as set forth in the Asset Purchase
Agreement and Related Agreements. If this Option is timely exercised, Purchaser
shall reimburse Unocal for all costs as set forth on Attachment B.

IN WITNESS WHEREOF, the parties have hereunto affixed their signatures as of the
date first above written.

WITNESSES: ASHLAND CHEMICAL, INC.

/s/ By:/s/
- ----------------------------- -----------------------------
/s/ Title:Group V.P.
- ----------------------------- --------------------------

WITNESSES: UNION OIL COMPANY OF CALIFORNIA

/s/ By:/s/Nicholas E. Lynam
- ----------------------------- -----------------------------
Nicholas E. Lynam

/s/ Title:Group Vice President
- ----------------------------- Chemicals & Minerals Division
Industrial Products Group

<PAGE> 19

ATTACHMENT A

MEMORANDUM OF OPTION TO PURCHASE

This Memorandum of Option to Purchase is made February 28, 1992, by and between
Union Oil Company of California, a California corporation ("Unocal") and Ashland
Chemical, Inc., an Ohio corporation, ("Ashland") with a mailing address of 5200
Blazer Parkway, Dublin, Ohio 43017.

WITNESSETH

1. Union has of even date hereof granted to Ashland an Option to Purchase that
certain real property described as follows:

Tract No. 1.

Beginning at the intersection of the Northern line of Wright Street
with the Western line of Surry Street, and running thence
Northwardly along said line of Surry Street 166 feet; thence
Southwardly 79(degree) 30' West to the low water mark of the Cape
Fear River; thence the same course continued to the line of anchor
piles approximately 100 feet east of the Harbor line or channel of
said River; thence Southwardly with the Easterly line of said line
of anchor piles to a point where the Northerly line of Wright
Street, if extended westwardly, would intersect said line of anchor
piles; thence with the line of said extended street Eastwardly to
the mean water line of the Cape Fear River; and thence the same
course continued Eastwardly and along the Northern line of Wright
Street 626.5 feet to the beginning. Same being part of lots 4, 5 and
6 in Block 29, according to the official plan of the City of
Wilmington, North Carolina, together with all that portion of the
wooden building that extends into Surry Street and also together
with all riparian rights appurtenant to the lands described above.
Together with an easement 15 feet in width, across the property
adjacent to Tract No. 1 described above for the maintenance of a
pipeline connecting the above-described terminal property with the
smaller terminal property lying on the North side of Wooster Street
(Tract No. 8), which right-of-way easement is more particularly
described in a right-of-way grant fromBP Oil Corporation dated
November 17, 1970 and recorded in Book 897 at Page 778 of the New
Hanover County Registry, reference to which is hereby made for a
more particular description.

<PAGE> 20

Tract No. 2.

Beginning at a point in the Southern line of Wright Street
twenty-four (24) feet westwardly from the intersection of the said
southern line of Wright Street with the Western line of Surry Street
(if Surry Street were opened according to the official plan of the
City of Wilmington), the said beginning point being four hundred and
twenty (420) feet westwardly from the intersection of the said
Southern line of Wright Street with the Western line of Front
Street; and runs thence from the said beginning point, southwardly
and parallel with Front Street three hundred and ninety-six (396)
feet to the northern line of Meares Street; thence westwardly and
along the said Northern line of Meares Street, extended Westwardly
six hundred and sixty-two (662) feet to an iron pipe on the river
bank; thence continuing the same course, that is an extension
westward of the Northern line of Meares Street, about four hundred
and two (402) feet more or less to the line of anchor piles
approximately 100 feet east of the Harbor line or channel of the
Cape Fear River; thence northwardly, along said line of anchor
piles, about four hundred and seventeen (417) feet more or less to
the Southern line of Wright Street extended westward; thence
eastward along the said Southern line of Wright Street (extended
westward) about three hundred and thirty-four (334) feet to an iron
pipe on the bank of the river; thence continuing eastward with the
said Southern line of Wright Street Six Hundred and Seven (607) feet
more or less to the point of beginning; saving and excepting from
the operation of this instrument a strip of land fifteen (15) feet
wide running along and with the eastern boundary line above
mentioned from Meares Street Northwardly to Wright Street and
parallel with Front Street, the same to be forever kept open for use
of the public as an alley way; the same being the western part of
lots 1, 2, 3, 4, 5 and 6 in block 15, according to the official plan
of the City of Wilmington, N. C., and the major part of said block.

Tract No. 3.

An undivided one-half (1/2I) interest in that tract of land
beginning at the Northwesternly corner of Block 16, as same is shown
upon the official plan of the City of Wilmington, North Carolina,
and running thence from said beginning point Southwardly and along
the Westernly boundary line of said Block 16 198 feet; thence
Westwardly and parallel with Wright Street 66 feet to the Easternly
boundary line of Block IS, according to the said plan of said City;
and running thence Northwardly and along the said Easternly boundary
line of said Block 15 198 feet to the Southernly line of said Block
15 198 feet to the Southernly line of Wright Street, the
Northeasternly corner of said Block 15, running thence Eastwardly
and along the Southernly line of Wright Street 66 feet to the
Northwesternly corner of said Block 16, the point of Beginning.

<PAGE> 21

Tract No. 4.

An undivided one-half (1/2) interest in the tract of land beginning
at the intersection of the Western line of Front Street with the
Southern line of Wright Street, and running thence Southwardly along
the Westernline of Front Street One Hundred Ninety-Eight (198) feet;
thence Westwardly and parallel with Wright Street Three Hundred
Thirty (330) feet to the Eastern line of Surry Street; thence
Northwardly along the &stern line of Surry Street One Hundred
Ninety-Eight (198) feet to the Southern line of Wright Street;
thence Eastwardly along the Southern line of Wright Steet Three
Hundred Thirty (330) feet to the point of beginning; the same being
all of Lots 1, 2 and 3, in Block 16, according to the official plan
of the City of Wilmington, North Carolina. Together with all of the
right, title and interest of Cape Fear in and to all streets and
ways in, on, through, over, upon, adjacent to and adjoining said
tract of land.

Tract No. 5.

An undivided one-half (1/2) interest in the tract of land beginning
at the point of intersection of the Western line of Surry Street
with the Southern line of Wright Street, and running thence
Southwardly along the Western line of Surry Street One Hundred
Ninety-Eight (198) feet; thence Westwardly and parallel with Wright
Street Twenty-four (24) feet; thence Northwardly and parallel with
Surry Street One Hundred Ninety-eight (198) feet to the Southern
line of Wright Street; thence Eastwardly along the Southern line of
Wright Street Twenty-Four (24) feet to the point of beginning; the
same being the Eastern part of Lots 1, 2 and 3, in Block 15,
according to the official plan of the City of Wilmington, North
Carolina. Together with all of the right, title and interest of Cape
Fear in and to all streets and ways in, on, through, over, upon,
adjacent to and adjoining said tract of land.

Tract No. 6.

Beginning at a point where the Northern line of Meares Street
intersects with the Western line of Front Street, and runs thence
Northwardly with the Western line of Front Street One Hundred and
Ninety-eight (198) feet; thence Westwardly parallel with Meares
Street Four Hundred and Twenty (420) feet; thence Southwardly
parallel with Front Street One Hundred and Ninety-eight (198) feet
to the Northern line of Meares Street; thence Eastwardly with the
Northern line of Meares Street Four Hundred and Twenty (420) feet to
the point of beginning. Being all of lots 4, 5 and 6, in Block 16
and the east ends of lots 4, 5 and 6, in Block 15, according to the
official plan of the said City of Wilmington, North Carolina,
together with all and singular the lands, tenements, easements and
appurtenances thereunto belonging, or in anywise appertaining.

<PAGE> 22
Tract No. 7.

An undivided one-half interest in and to that strip of land
approximately 100 feet in width lying between the Harbor line or
channel of the Cape Fear River (being the Western boundary of said
strip) and the line of anchor piles approximately 100 feet east of
said Harbor line (being the Eastern boundary of said strip) and
extending from an extension of the center line of Marstellar Street
(being the Southern boundary of said strip) approximately 1085 feet
to the Northem boundary of the properties of Cape Fear Terminal
Company which is approximately 85 feet north of the Northern line of
Wright Street as extended; together with an undivided one-half
interest in all properties, improvements, structures and betterments
situated thereon and in the riparian rights in connection therewith;
provided, however, this conveyance is without warranty as to any
portion of said strip which may constitute a part of Marstellar,
Meares or Wright Streets, or to any portion of said strip which lies
below the mean high water mark of the Cape Fear River.

Tract No. 8.

Beginning at a point in the northern line of Wooster Street, said
point being a nail. in the concrete located south 87 degrees 30
minutes west 110 feet from the intersection of the northern line of
Wooster Street with the Wester line of Surry Street according to the
official plan of the City of Wilmington, and runs thence north 02
degrees 30 minutes west and parallel with the western line of Surry
Street 132.0 feet to an old fence post; thence south 87 degrees 30
minutes west and parallel with the northern line of Wooster Street
116.5 feet; thence north 02 degrees 30 minutes west and parallel
with the western line of Surry Street 18.0 feet to an iron pipe;
thence south 87 degrees 30 minutes west S29 feet, more or less, to
the eastern harbor line of the Cape Fear River; said point in said
harbor line being 150 feet north of the north line of Wooster Street
measured at right angles; thence southwardly with the harbor line of
the Cape Fear River 150 feet, more or less, to where said harbor
line is intersected by the northern line of Wooster Street extended
westwardly to said harbor line; thence north 87 degrees 30 minutes
east and along the northern line of Wooster Street, portions of
which have now been closed, 679 feet, more or less, to the point of
Beginning.

Together with a 20 foot joint use easement with the adjoining
property owner on the north described as follows:

<PAGE> 23

parallel with the western line of Surry Street 20 feet; thence
westwardly parallel with the northern line of Wooster Street to the
Cape Fear River; thence southwardly along the Cape Fear River 20
feet, more or less, to a point 150 feet north of the northern line
of Wooster Street, measured at right angles to said street; thence
eastwardly and parallel with the northern line of Wooster Street to
the point of beginning.

2. The aforesaid Option to Purchase shall expire at 5:00 P.M. Eastern Standard
Time on February 28, 1993 or upon prior written notice by Ashland to Union.

If Purchaser exercises its Option to Purchase either Terminal or both and
the Property is divisable, Purchaser will reimburse all costs associated
with the subdivision of the Property

3. This Memorandum of Option to Purchase is prepared for the purpose of
recordation only, and it in no way modifies or otherwise amends the
aforesaid Option to Purchase agreement between the parties.

WITNESSES: UNION OIL COMPANY OF CALIFORNIA

/s/ By:/s/
- ----------------------------- -----------------------------
/s/ Title:Group Vice President
--------------------------

WITNESSES: ASHLAND CHEMICAL, INC.

/s/ By:/s/
- ----------------------------- -----------------------------
/s/ Title:Group V.P.
--------------------------

Acknowledgements

This 28th day of February, 1992
/s/

(Notary Seal)

<PAGE> 24

Attachment B

REIMBURSABLE COSTS

Unocal will be reimbursed by Ashland for the following costs plus costs for
other necessary activities determined by Unocal, if incurred during the inactive
period following the completion of the activities related to Taking Category B
Out of Service:

BRANCH/PLANT OFFICE

- - Drain and evacuate all potable water lines and fill traps with approved
glycol solution.

- - Board all exterior windows/doors.

- - Drain boiler, clean, dry and load with absorbent material.

- - Drain hot water heaters.

- - Inspect and maintain secondary containment for fuel oil tank if kept in
service.

WAREHOUSE

- - Perform the quarterly fire system inspection per the procedures of Unocal's
Preventive Maintenance Program.

- - Service air compressor by spraying preservation oil into the air intake
ports and draining the crankcase. Drain receiver, particulate and
coalescent filters. Remove and discard desiccant.

- - Lubricate dock levelers.

- - Secure skylights and ceiling fans.

DRUMMING DOCK

- - Service drum pumps. Grease each fitting. Change gearbox oil. Drain
pump and coat inside with light oil. Isolate and cap suction and discharge
nozzles. Inspect and clean breather drains on motor control enclosures.

- - Remove and store load cells.

- - Lubricate dock levelers.

- - Service drum vent fan by lubricating the impeller shafts and covering the
inlet.

<PAGE> 25

- - Secure all valves.

- - Service blend tank agitator and motor per Preventive Maintenance
Procedures.

- - Remove and store scale batteries.

- - Plug stempit drains.

- - Inspect and service auto drum fillers. Clean tubes, fittings, seals and
o-rings. Lower lance and clean.

- - Drain all eyewash and safety showers.

TRUCK AND RAILCAR RACKS

- - Service all pumps. Grease each fitting. Change gearbox oil. Drain pump and
coat inside with light oil. Isolate and cap suction and discharge nozzles.
Inspect and clean breather drains on motor control enclosures.

- - Secure all valves.

- - Service all meters per Preventive Maintenance Procedure.

- - Remove and store drip pans and plug any containment inlets.

- - Plug stem pit drains.

TANK FARM

- - Secure all valves.

- - Isolate tank from associated piping.

- - Replace manways with a mesh cover.

- - Inspect and clean pressure/vacuum vents and cover with breathable nylon or
similar bags.

- - Inspect and clean escapement vents.

- - De-energize tank high level alarm system.

- - Remove and discard any desiccant in tank vent dryer.

- - Remove thermometers and store Plug thermowells.

- - Lower swing arm and remove winch handle from cable assembly (marine tanks).

<PAGE> 26

- - Service pumps. Grease each fitting. Change gearbox oil. Drain pump and
coat inside with light oil. Isolate and cap suction and discharge nozzles.
Inspect and clean breather. drains on motor control enclosures.

- - Remove and store 10 feet of ladders and stairs.

- - Oil fill land gauges.

TRUCK SCALES

- - Remove and store load cells.

- - Clean undercarriage and repack with grease.

- - Set scale on blocks.

- - Plug conduit ends.

OIL/WATER SEPARATOR

- - Drain and clean per API 2015. Install lockable covers.

- - If NPDES permitting allows, plug inlet and outlets.

GROUNDS

- - Police grounds after shutdown.

- - Establish grounds maintenance contract.

PERMITS

- - Maintain existing permits.

- - Procure new permits associated, directly or indirectly with the facility.

MISCELLANEOUS ITEMS

- - Establish caretaker/security contract.

- - All tanks to be isolated from product lines by double blinds.

- - Place all unsecured items in the warehouse.

- - Fire system to remain operational. Grease each fitting. Change gearbox oil.
Drain pump and coat inside with light oil. Isolate and cap suction and
discharge nozzles. Inspect and clean breather drains on motor control
enclosures.

- - Property security lighting to remain on.

- - Quarterly wire system inspections to be performed.

<PAGE> 27

- - Inspect and service cathodic protection system per Unocal's Preventive
Maintenance procedure.

CONTINUING SERVICES

- - Cathodic Protection

The cathodic protection system will be maintained in an operational
condition. Unocal Engineering and Development Department will continue to
conduct the cathodic protection surveys as regularly scheduled.

- - Grounds Maintenance

A contract with a lawn care service will be established to maintain the
grounds in a neat and orderly manner. Grass and shrubbery will be cut
during the growing season at least once per month.

- - Utilities

Electrical service will be maintained for security lighting, fire, and
cathodic protection. AD other electrical service breakers will be turned
off.

Water service will remain on for the fire protection system. Potable water
will be turned off and applicable lines drained.

Natural gas service for office heating will be discontinued unless weather
conditions dictate otherwise.

- - Quarterly Fire System Inspections

The fire protection system will be kept in an operational condition. The
monitoring system win be tied into and monitored full time at the security
service or local sheriff/fire department. A contract with a fire service
company will be prepared to provide for quarterly system inspections.

- - Security

A security firm will be contracted to provide daily site inspections. They
will also be responsible for providing access for other service contractors
and for keeping Unocal advised as to the status of the site.

- - Stormwater Discharge

Contract to have stormwater sampled and discharged after each rainfall
event as required by the NPDES Permit.

<PAGE> 1

EXHIBIT 10.38

ASSET PURCHASE AGREEMENT

between

UNION OIL COMPANY OF CALIFORNIA

and

ASHLAND CHEMICAL, INC.

dated as of

February 14, 1992

<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<S> <C> <C>
ARTICLE ONE - CERTAIN DEFINITIONS .......................................... 1
Affiliate ........................................................... 1
Asset Bill of Sale .................................................. 1
Assets .............................................................. 1
Assumed Liabilities ................................................. 1
Base Rate ........................................................... 1
Category A Property ................................................. 1
Category B Property ................................................. 1
Chemicals Distribution Business...................................... 1
Chemical Substances ................................................. 3
Claim Notice ........................................................ 3
Closing ............................................................. 3
Closing Date ........................................................ 3
Confidential Information............................................. 3
Consent ............................................................. 3
Contracts ........................................................... 3
Damages ............................................................. 3
Deeds ............................................................... 4
Due Date ............................................................ 4
Effective Time ...................................................... 4
Environmental Claims ................................................ 4
Environmental Cleanup Liability ..................................... 4
Environmental Compliance Costs ...................................... 5
Environmental Laws .................................................. 5
Exact Inventory Value ............................................... 6
Exact Trade Accounts Payable Value .................................. 6
Exact Trade Accounts Receivable Value................................ 6
Indemnified Party ................................................... 6
Indemnifying Party .................................................. 6
Intellectual Property ............................................... 6
Inventory ........................................................... 7
Inventory Bill of Sale .............................................. 8
Judgment ............................................................ 8
Kansas City Lease ................................................... 8
Late Payment Rate ................................................... 8
Leased Personal Property ............................................ 8
Leased Real Estate................................................... 8
Legal Requirements .................................................. 8
Liens ............................................................... 9
Material Contracts .................................................. 9
Non-Conforming Inventory ............................................10
Operations ..........................................................10
Options to Purchase Agreements ......................................10
Options to Assume Leases ............................................10
Owned Personal Property .............................................10
Owned Real Estate ...................................................10
Permits .............................................................10
Permitted Encumbrances ..............................................11
Person ..............................................................11
</TABLE>

<PAGE> 3

<TABLE>
<S> <C> <C>
Proceedings .........................................................11
Proposed Amendment ..................................................11
Real Estate ....................................................... .11
Related Agreements ..................................................11
Release .............................................................12
Retained Assets ....................................... .............12
Retained Liabilities ................................................12
Returns ............................................................ 12
Software License and Assignment..................................... 12
Taking Category B Property Out of Service........................... 12
Taxes ..............................................................13
To Unocal's knowledge............................................... 13
Trade Accounts Payable .............................................13
Trade Accounts Payable Assumption .................................. 13
Trade Accounts Receivable........................................... 13
Trade Accounts Receivable Assignment.................................13
Trademarks ......................................................... 14
Transferred Employee ................................................14
Waste ...............................................................14
Working Capital Balance .............................................14

ARTICLE TWO - CLOSING; TRANSACTIONS; LIMITED ASSUMPTION OF
LIABILITIES.................................................................15
2.1 Closing .....................................................15
2.2 Transactions, Transfers of Assets and Deliveries
of Monies ...................................................15
2.3 Method of Payment ...........................................18
2.4 Limited Assumption of Liabilities............................18
2.5 Allocation of Purchase Price ................................22
2.6 Allocation of Environmental Cleanup
Liabilities..................................................22

ARTICLE THREE - REPRESENTATIONS AND WARRANTIES OF UNOCAL....................26
3.1 Organization.................................................26
3.2 Authority; Enforceability....................................26
3.3 Consents ....................................................26
3.4 No Breach .................................................. 27
3.5 Financial Statements; Liabilities ...........................27
3.6 Title to Property ...........................................28
3.7 Real Estate .................................................29
3.8 This Section intentionally left blank .......................30
3.9 Compliance with Laws ........................................30
3.10 Outstanding Commitments .....................................30
3.11 Employee Matters.............................................30
3.12 Employment Benefits .........................................31
3.13 Actions and Proceedings......................................31
3.14 Employee Relations ..........................................32
3.15 Absence of Certain Changes...................................32
3.16 Brokers ....................................... .............33
3.17 Other Purchaser Liabilities .................................33
3.18 Inventory ...................................................34
3.19 Trade Accounts Payable ......................................34
3.20 Trade Accounts Receivable....................................34
3.21 Customers and Suppliers .....................................34
</TABLE>

<PAGE> 4

<TABLE>
<S> <C> <C>
3.22 Condition of Certain Assets..................................34
3.23 Tax Matters .................................................34
3.24 No Business Relationship with South Africa...................35
3.25 Permits .....................................................35
3.26 Completeness of Information..................................35

ARTICLE FOUR - REPRESENTATIONS AND WARRANTIES OF PURCHASER .................36
4.1 Organization.................................... ............36
4.2 Authority; Enforceability ................................. 36
4.3 Consents ....................................................36
4.4 No Breach....................................................37
4.5 Actions and Proceedings......................................37
4.6 Brokers......................................................37
4.7 Completeness of information..................................37

ARTICLE FIVE - ACTIONS PRIOR TO CLOSING ....................................39
5.1 Operations and Actions ......................................39
5.2 Casualty Loss; Condemnation; Injunction......................40
5.3 Inspections .................................................41
5.4 Reasonable Efforts...........................................41
5.5 Transfer or Reissuance of Permits............................42
5.6 Amendments to Schedules .....................................42
5.7 Offers of Employment: Transferred Employees..................43

ARTICLE SIX - CONDITIONS PRECEDENT TO OBLIGATIONS OF UNOCAL
AND PURCHASER ..............................................................45
6.1 Conditions Precedent to Obligations of
Purchaser ...................................................45
6.2 Conditions Precedent to Obligations of Unocal ...............47

ARTICLE SEVEN - INDEMNIFICATION ............................................49
7.1 Indemnification by Unocal................................... 49
7.2 Claims Regarding Exposure Before and After the
Effective Time ..............................................52
7.3 Indemnification by Purchaser ................................52
7.4 Method of Asserting Claims, Etc..............................54
7.5 Survival of Representations and Warranties;
Limitation of Liabilities ...................................57
7.6 Right to Cure ...............................................57
7.7 Construction Contracts.......................................58

ARTICLE EIGHT - TERMINATION ................................................59
8.1 Grounds for Termination......................................59
8.2 Effect of Termination........................................60

ARTICLE NINE - ACTIONS AFTER THE CLOSING....................................61
9.1 Employee Benefit Matters.....................................61
9.2 Further Assurances ..........................................64
9.3 Payment of Transfer Taxes; Recording Fees....................65
9.4 Payment of Certain Expenses Due and Payable
After the Effective Time; Prepaid Expenses...................65
9.5 Contracts Not Assigned at Closing ...........................65
9.6 Undisclosed Material Contracts...............................66
9.7 Casualty Repair; Taking Proceeds.............................66
</TABLE>

<PAGE> 5

<TABLE>
<S> <C> <C> <C>
9.8 Adjustment to Payment by Purchaser...........................67
9.9 Uncollected Trade Accounts Receivable........................70
9.10 Reimbursement for Certain Items .............................70
9.11 Cooperation..................................................70
9.12 Preparation of Returns ......................................72
9.13 Removal of Non-Conforming Inventory and Stored
Waste........................................................73
9.14 Carteret.....................................................73

ARTICLE TEN - MISCELLANEOUS.................................... ............74
10.1 Like Kind Exchange...........................................74
10.2 Publicity....................................................74
10.3 No Shopping .................................................74
10.4 Confidentiality, Nondisclosure and
Noninterference..............................................75
10.5 Costs and Expenses...........................................77
10.6 Notice.......................................................77
10.7 Assignment...................................................78
10.8 Counterparts.................................................79
10.9 Entire Agreement ............................................79
10.10 Headings.....................................................79
10.11 Schedules....................................................79
10.12 Governing Law................................................79
10.13 No Third Party Rights........................................80
10.14 Limitation of Liability......................................80
10.15 Waivers and Amendment........................................80
10.16 Severability ................................................80
10.17 Time Computation ............................................80

ARTICLE ELEVEN - COVENANT NOT TO COMPETE ..................................81
11.1 Introduction ................................................81
11.2 Covenant Not to Compete .....................................81
11.3 Definition of Chemicals Distribution Business................81
11.4 Consideration ...............................................82
11.5 Injunctive Relief............................................82
11.6 Separate Enforceability .....................................83
11.7 Term of Article 11 ..........................................83

ARTICLE TWELVE - COUNTERVAILING PAYMENTS ...................................84
</TABLE>

<PAGE> 6

ASSET PURCHASE AGREEMENT, including all the Exhibits and Schedules referred to
herein (this "Agreement"), dated as of February 14, 1992, made between UNION
OIL COMPANY OF CALIFORNIA dba Unocal ("Unocal"), a California corporation, and
ASHLAND CHEMICAL, INC. ("Purchaser"), an Ohio corporation.

WHEREAS, pursuant to this Agreement, Purchaser shall purchase Unocal's
Chemicals Distribution Business, including Unocal's interest in the Assets and
Inventory.

NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants, agreements and undertakings contained or referred to in this
Agreement, the parties hereby agree as follows:

ARTICLE ONE - CERTAIN DEFINITIONS

Capitalized terms used in this Agreement are used as defined in this Article One
or elsewhere in this Agreement.

"Affiliate" shall mean, with respect to any Person, any other Person directly
or indirectly controlling, controlled by or under common control with, such
Person. For purposes of this definition, "control" shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of an entity, whether through the ownership of voting
securities or otherwise. Irrespective of this definition or any other
definition, the term "Affiliate" does not include The UNO-VEN Company.

"Asset Bill of Sale" shall mean the general bill of sale from Unocal to
Purchaser conveying Unocal's interest in the Assets, substantially in the form
of Exhibit A.

"Assets" shall mean all tangible and intangible assets used in or related to
the Chemicals Distribution Business (except the Retained Assets) which are
described in Exhibit B.

"Assumed Liabilities" shall have the meaning specified in Section 24(b).

"Base Rate" shall mean the lesser of ten percent (10%) per annum and the maximum
rate of interest permitted by applicable law.

"Category A Property" shall mean that Real Estate specified as Category A on
Schedule 3.7(a).

"Category B Property" shall mean that Real Estate specified as Category B on
Schedule 3.7(a).

"Chemicals Distribution Business" shall mean all of the business activities
carried on by Unocal up to the date of Closing under the

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ASSET PURCHASE AGREEMENT, CHEMICALS DISTRIBUTION BUSINESS Page 1 of 85
February 14, 1992

<PAGE> 7

name "Unocal Chemicals Distribution," namely the Assets, the Operations, the
marketing and sale of:

(i) any chemicals, hydrocarbon solvents, hydrocarbon solvent blends,
chemical blends, chemical/hydrocarbon blends, and

(ii) hydrocarbon solvents or hydrocarbon solvent blends predominantly
shipped in less than a full tank truck load; and

(iii) hydrocarbon solvents in full combination tank truck loads to a class
of trade which has predominantly purchased in mixed hydrocarbon
solvent and chemical tank truck loads;

but specifically excluding Unocal's marketing and sale of:

(i) hydrocarbon solvents manufactured at or shipped from the UNO-VEN
Refinery or from tankage in the Chicago area historically associated with
said Refinery, or the Toledo terminal, or the Catlettsburg Refinery, or
manufactured at and shipped from any Unocal refinery, and in at least a
full tank truck load, which is defined as one or more hydrocarbon
solvents, in combination or blended, comprising a full load, and delivered
to one destination;

(ii) hydrocarbon solvents which Unocal purchases to offset shortfalls
from production at the UNO-VEN refinery and resells in a single product,
in at least a full tank truck load delivered to one destination;

(iii) hydrocarbon solvents which Unocal exchanges for delivery into
tanks of resellers or distributors in a single product, in at least a full
tank truck load delivered to one destination;

(iv) hydrocarbon solvents which Unocal purchases or exchanges and
resells in the same manner and to the same class of trade as historically,
and in at least a full tank truck load, which is defined as one or more
hydrocarbon solvents, in combination or blended with hydrocarbon solvents
produced at the UNO-VEN Refinery or any Unocal refinery, comprising a full
load, and delivered to one destination;

(v) hydrocarbon solvents for distributor pickups, including Ashland
Chemical, at the UNO-VEN Refinery and Toledo terminal; and

(vi) provided that minor additives of no more than one percent may
be blended with such hydrocarbon solvents or hydrocarbon solvent blends.

As used throughout this definition, "full tank truck load" shall mean those
normal over-the-road bulk hydrocarbon transport vehicles having a minimum
quantity of 80% of shell capacity in the case of

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ASSET PURCHASE AGREEMENT, CHEMICALS DISTRIBUTION BUSINESS Page 2 of 85
February 14, 1992

<PAGE> 8

aromatic solvents and 90% of shell capacity in the case of aliphatic solvents.
In the case of a combination load, each compartment must be utilized and the
aggregate amount must be not less than 80% of shell capacity.

"Chemical Substances" shall mean any chemical substance, including, but not
limited to, any sort of pollutants; contaminants; chemicals; raw materials;
intermediates; products; industrial, solid, toxic or hazardous substances,
materials, or wastes; or petroleum products, including crude oil or any
component thereof.

"Claim Notice" shall have the meaning specified in Section 7.4(a).

"Closing" shall have the meaning specified in Section 2.1.

"Closing Date" shall have the meaning specified in Section 2.1.

"Confidential Information" shall have the meaning specified in Section 10.4(a).

"Consent" shall have the meaning specified in Section 3.3.

"Contracts" shall mean any and all oral or written contracts, agreements,
franchises, warranties, understandings, arrangements, leases, licenses,
registrations, authorizations, rights of way, mortgages, bonds, notes and other
instruments and obligations and interests therein or rights thereunder,
excluding any Permits.

"Damages" shall mean any and all obligations, liabilities, damages, penalties,
deficiencies, losses, judgments, settlements, costs and expenses (including, but
not limited to, costs and expenses reasonably incurred in connection with a
defense, performing obligations, interest, bonding and appellate costs and
attorneys', accountants', engineers', consultants' and investigators' reasonable
fees and disbursements), and including interest on such Damages at

(i) the Base Rate beginning thirty (30) days after the date on which the
Indemnified Party makes a payment in respect of a claim or demand asserted
by a third party against the Indemnified Party for which the Indemnified
Party is entitled to indemnification hereunder or

(ii) the Late Payment Rate on the date a Judgment is entered in favor of
the Indemnified Party, if such claim does not arise out of a claim or
demand asserted by a third party against the Indemnified Party.

Irrespective of any other term in this Agreement or Related Agreements' damages
do not include any special, indirect or consequential damages, including loss of
profits or revenue, business interruption or any other similar losses.

Furthermore, Unocal's liability to Purchaser for any Damages or Retained
Liabilities directly or indirectly related to this

- --------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT, CHEMICALS DISTRIBUTION BUSINESS Page 3 of 85
February 14, 1992

<PAGE> 9

Agreement regardless of whether Unocal is alleged to be negligent actively,
passively or not at all, including but not limited to, any Related Agreements or
any Material Contracts, except for Damages related to liability to Purchaser or
to third parties to the extent due to the sole negligence or willful misconduct
of Unocal, Environmental Cleanup Liability, Claims Regarding Exposure Before and
After the Effective Time (Section 7.2), Article Eleven, or Article Twelve
off-site transportation, storage, disposal or treatment of any Chemical
Substances by or on behalf of Unocal and its Affiliates, and Sections 2.2(b),
5.2, 9.1, 9.3, 9.4, 9.7, 9.8, 9.9, 9.10, 9.12 and 9.13 shall not exceed seven
million five hundred thousand dollars ($7,500,000). Notwithstanding any other
language in this Agreement, Unocal's obligations to Purchaser for Environmental
Compliance Costs incurred after the Effective Time and including costs for work
performed or paid by or on behalf of Unocal and costs of Purchaser indemnified
by or on behalf of Unocal shall not exceed five million dollars ($5,000,000) in
the aggregate and Environmental Compliance Costs for which Unocal is obligated
to reimburse Purchaser shall be included as part of the overall seven million
five hundred thousand dollar limit on Damages and indemnifications from Unocal
to Purchaser.

"Deeds" shall mean the respective form of deeds substantially as set forth in
Exhibit N which may be amended to conform to the title insurers requirements and
applicable law.

"Due Date" shall mean the original date specified on the invoice by which
payment is due.

"Effective Time" shall mean 11:59 P.M. Eastern Standard Time on the Closing
Date.

"Environmental Claims" shall mean any claim made, asserted or prosecuted by or
on behalf of any third party (whether based on negligent acts or omissions,
statutory liability, or strict liability without fault or otherwise), including,
without limitation, any governmental entity, to the extent relating to the
Assets or Operations and resulting from the violation of or an allegation which
may give rise to liability under any Environmental Laws. An Environmental Claim
shall not include any cost, expense or liability that comes within the
definition of an Environmental Compliance Cost or an Environmental Cleanup
Liability; provided, however, the Environmental Claims shall not include any
claim for personal injury or illness by any individual, whether an employee,
nonemployee or otherwise, or their respective legal representatives, heirs,
beneficiaries and estates. Environmental Claims includes any Damages associated
with resolving such claims.

"Environmental Cleanup Liability" shall mean any reasonable cost or expense of
any nature whatsoever required by any third party, including, but not limited
to, any federal, state or local administrative or governmental authority, to be
undertaken under or pursuant to any Environmental Laws to identify, contain,
remove, remedy, respond to, clean up, or abate any Release of Chemical
Substances, or other contamination of surface water, groundwater,

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ASSET PURCHASE AGREEMENT, CHEMICALS DISTRIBUTION BUSINESS Page 4 of 85
February 14, 1992

<PAGE> 10

land surface or subsurface strata, whether on-site or off-site, arising from
activities involving the Assets or from the Operations.

For purposes of this definition, the requirements of any Workplan as defined in
Section 2.6(c), the requirements of any final order issued by any such agency,
or the decision of any such agency indicating no cleanup is required, shall be
presumed to define the requirements of Environmental Laws within one year after
the transfer of title or assumption of lease but not to exceed three years from
the Effective Time for a Category B Property, subject to the right of Unocal to
rebut the presumption. The above presumption shall apply only to an initial
Workplan, order or applicable agency decision and not to any amendment,
supplement, revision of same. Unocal may rebut the presumption by reference to
statutory law, legislative history, regulations, the administrative record of
regulations, orders, rulings, policy, guidance, announcements, past present and
future practice, the statements and correspondence of agency officials and other
knowledgeable persons, and/or other credible information without regard to
formal rules of evidence. Unocal shall notify Purchaser in writing of its intent
to rebut the presumption described in this Section within one year of the
approval of the Workplan, or issuance of the order or applicable agency decision
which created the presumption, or of the filing of a Claim Notice by Purchaser
with respect thereto, whichever is latest.

"Environmental Compliance Costs" shall mean any reasonable cost or expense of
any nature whatsoever reasonably necessary to enable the Chemicals Distribution
Business to comply with all applicable federal and state occupational safety and
health laws in effect and requiring the Assets and Operations to be in
compliance as of the Effective Time and Environmental Laws, regulating the
manufacture, generation, formulation, processing, permitting, registration,
reporting, record keeping, planning, training, labelling, distribution, use,
treatment, handling, storage, disposal, or transportation, construction,
operation, use, physical structure, condition, removal, or demolition of or with
respect to any Chemical Substances or of any building, facility, equipment,
fixture or other structure containing a Chemical Substance, including, without
limitation, those Legal Requirements relating to the managements use, storage,
disposal, clean-up or removal of asbestos, asbestos-containing materials,
polychlorinated biphenyls or any other Chemical Substances, except that an
Environmental Compliance Cost shall not include any cost, expense or liability
that comes within the definition of an Environmental Cleanup Liability.

"Environmental Laws" shall include any Legal Requirement applicable to the
Assets or Operations herein, effective:

(a) as of the Effective Time, for an Environmental Compliance Cost, or
an Environmental Claim; or

(b) for an Environmental Cleanup Liability,

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ASSET PURCHASE AGREEMENT, CHEMICALS DISTRIBUTION BUSINESS Page 5 of 85
February 14, 1992

<PAGE> 11

(i) within one year of the Effective Time for a Category A
Property, and

(ii) within one (1) year of transfer of title or assumption of
lease, but not to exceed three (3) years from the Effective
Time, for a Category B Property,

that relate to pollution or protection or cleanup of the environment
(including, but not limited to, ambient air, surface water, groundwater, land
surface or subsurface strata), including without limitation the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), the Resource Conservation and Recovery Act of 1976, as amended
("RCRA"), the Oil Pollution Act of 1990 ("OPA"), and other such Lega1
Requirements relating to:

(a) Release, containment, removal, remediation, response, cleanup or
abatement of any sort of Chemical Substances;

(b) the manufacture, generation, formulation, processing, labelling,
distribution, use, treatment, handling, storage, disposal or
transportation of any Chemical Substances;

(c) the physical structure or condition of a building, facility, fixture
or other structure, including, without limitation, those relating to
the management, use, storage, disposal, clean-up or removal of
asbestos, asbestos-containing materials, polychlorinated biphenyls or
any other Chemical Substance; and

(d) federal and state occupational safety and health laws.

"Exact Inventory Value" shall have the meaning specified in Section 9.8(a)(i).

"Exact Trade Accounts Payable Value" shall have the meaning specified in Section
9.8(a) (iii).

"Exact Trade Accounts Receivable Value" shall have the meaning specified in
Section 9.8(a)(ii).

"Indemnified Party" shall have the meaning specified in Section 7.4.

"Indemnifying Party" shall have the meaning specified in Section 7.4.

"Intellectual Property" shall mean the Trademarks and any and all patents,
patent applications, copyrights, copyright registrations, applications for the
registration of copy-rights, technical information, industrial know-how,
technology and trade secrets, and the goodwill associated with any of the
foregoing, used commercially as of the Effective Time by Unocal or its
Affiliates solely in connection with the Operations.

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February 14, 1992

<PAGE> 12

"Inventory" shall mean Unocal's store of non-obsolete and merchantable
finished goods and raw materials of the Operations held on the premises, or
en route to the premises of the Assets for purposes of resale, as reflected
on Schedule 3.18, plus additions thereto and deletions therefrom, in the
ordinary course of business, from the date thereof of Schedule 3.18 to the
Closing Date. As used in this definition, the word "non-obsolete" shall mean
Products with respect to which Unocal has in the normal course of the Operations
made deliveries to customers within the three month period October through
December 1991, and with respect to which Unocal has no knowledge as of the
Closing Date that continuing sales of any such product will be substantially
decreased or halted. As used in this definition, the word "merchantable"
shall describe finished goods and raw materials which:

(a) pass without objection in the trade under the contract description;

(b) in the case of the fungible goods, are of fair average quality
within the description;

(d) run of even kind, quality and quantity within each unit and among
all units involved;

(e) are adequately contained, packaged, and labeled; and

(f) conform to the promises or affirmations of fact made on the
container or label, if any.

Notwithstanding anything herein to the contrary, "Inventory" shall not include,
except as set forth on Schedule 3.18;

(a) any Unocal product which has been manufactured, blended, amalgamated
or otherwise produced from "line flush", "drips", "heels," or
similar odd lots of other products, and sold or inventoried as
liquifier; or

(b) amounts of finished goods and raw materials on a
facility-by-facility basis which exceed sales of the respective
product within the last quarter of the calendar year 1991, except
those products

(i) which were purchased in quantities that exceed an average
three-months of sales to take advantage of favorable prices or
economics, and the inventory level thereof does not exceed a three
month sales forecast,

(ii) which are used in blending and are only available for
purchase from suppliers in minimum quantities which exceed average
three-months of sales,

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February 14, 1992

<PAGE> 13

(iii) which are new products inventoried for the first time in the
last six months of 1991, and

(iv) where Unocal can demonstrate that the time interval, between
sales of the product, exceeds three months; or

"Inventory Bill of Sale" shall mean the general bill of sale from Unocal to
Purchaser conveying all of the Inventory substantially in the form of Exhibit
C.

"Judgment" shall mean any and all final and non-appealable judgments, orders,
directives, rulings, decisions, restraining orders, injunctions, decrees or
awards of any federal, state, local or foreign court, arbitrator or
administrative or governmental authority, bureau or agency.

"Kansas City Lease" shall mean a lease between Unocal as lessor and P9rchaser as
lessee, substantially in the form of Exhibit D.

"Late Payment Rate" shall mean the lesser of fifteen percent (15%) per annum
and the maximum rate of interest permitted by applicable

"Leased Personal Property" shall mean all Assets that are personal property
which Unocal does not own but as to which the Chemicals Distribution Business
has the benefit, use, enjoyment or possession under a lease or license.

"Leased Real Estate" shall mean Real Estate leased by Unocal and identified on
Schedule 3.7(a) as Leased Real Estate.

"Legal Requirements" shall mean any and all applicable

(i) federal, state, local and foreign laws (statutory, judicial or
otherwise), rules, ordinances and regulations,

(ii) Judgments,

(iii) Contracts with any federal, state, local administrative or
governmental authority, bureau or agency relating to compliance with
matters described in (i) or (ii) above, and

(iv) Permits;

as any of the foregoing matters described in (i), (ii), (iii) or (iv) may have
been waived, amended, varied or otherwise modified.

As used in the definition of Environmental Law as that term is used in the
definition of Environmental Compliance Cost, a Legal Requirement is effective on
the date it mandates a specific

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February 14, 1992

<PAGE> 14

requirement to be implemented or completed by that date. As used in the
definition of Environmental Law as that term is used in the definition of
Environmental Cleanup Liability, a Legal Requirement includes but is not
limited to a cleanup standard; provided however, that such Legal Requirement
is defined and binding within one year from the Effective Time.

"Liens" shall mean any and all liens, mortgages, charges, pledges, Security
interests, burdens or other claims, encumbrances of any nature whatsoever,
including, but not limited to, such as may arise under any Contracts or
Judgments.

"Material Contracts" shall mean all Contracts that are listed on Schedule
2.4(b)(v)(A) and that are material and pertain to the Chemical Distribution
Business, including, but not limited to, all Contracts described below to
which Unocal is a party that relate primarily to the Assets or Operations:

(i) all Contracts which have a remaining term of more than one year,
cannot be terminated by Unocal without cost on ninety (90) days'
written notice or less and the terms of which provide for future
payment or receipt by Unocal of an annual amount in excess of
$10,000 per contract;

(ii) all Contracts under which Unocal is committed to pay for or to
provide goods or services with an annual value of more than $10,000
per contract;

(iii) all Contracts between or among Unocal and any of its Affiliates;

(iv) all confidentiality and non-competition Contracts, other than any
such Contracts included in a license of Intellectual Property
included under clause (viii) immediately below, which restrict the
Operations;

(v) all employment Contracts other than those for normal
employer/employee relationships which are terminable at will without
payments other than normal severance pay pursuant to the employer's
severance policy or pursuant to applicable Legal Requirements;

(vi) all partnership, joint venture or profit sharing Contracts, but
excluding any contracts with The UNO-VEN Company;

(vii) all Contracts which relate to borrowing money or providing
guarantees of indebtedness for monies borrowed by any other Person;

(viii)all licenses of Intellectual Property other than those licenses
that are immaterial, individually or in the aggregate, to the
respective Assets and/or Operations;

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(ix) all leases, licenses, rights of way or similar arrangements in
respect of the use of any real estate, other than such as are immaterial,
individually or in the aggregate, to the respective Assets and/or
Operations;

(x) all sales agency, distributorship and consultant agreements or
agreements providing for the services of an independent contractor to
which Unocal is a party or by which it is bound;

(xi) each agreement not otherwise listed herein to which Unocal is a
party or which has, or may have, a material effect on the Assets or
Operations (excluding any Contract with the UNO-VEN Company) other than
such as are immaterial, individually or in the aggregate, to the
respective Assets and/or Operations; and

(xii) contracts for the supply of products to the Chemicals Distribution
Business, excluding contracts with the UNO-VEN Company and contracts or
portions thereof which are subject to restrictions.

"Non-Conforming Inventory" shall mean all finished goods or raw materials not
meeting the definition of Inventory.

"Operations" shall mean the Chemicals Distribution Business which includes the
business and activities conducted by Unocal in connection with any of the Assets
prior to the Effective Time.

"Options to Purchase Agreements" shall mean agreements, substantially in the
form of Exhibit F, between Purchaser and Unocal for Category B Property.

"Options to Assume Leases" shall mean agreements, substantially in the form of
Exhibit G, between Purchaser and Unocal for Category B Property.

"Owned Personal Property" shall mean all Assets that are personal property,
other than Trade Accounts Receivable which Unocal owns which the Chemicals
Distribution Business has the benefit, use, enjoyment and possession thereof.

"Owned Real Estate" shall mean Real Estate owned by Unocal or an Affiliate and
identified on Schedule 3.7(a) as Owned Real Estate.

"Permits" shall mean any and all permits, authorizations, approvals,
registrations, rights of way, orders, waivers, variances or other licenses
issued or granted by any federal, state or local administrative or governmental
authority, bureau or agency which are held by Unocal or any of its Affiliates

(i) under any Legal Requirement, including, but not limited to,
Environmental Laws, or
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<PAGE> 16

(ii) under, or pursuant to, any Judgments or any Contracts with any such
administrative or governmental authority, bureau or agency relating
in each case to compliance with any Legal Requirement.

"Permitted Encumbrances" shall apply only to those Assets owned by Unocal and
its Affiliates and shall mean any Liens that

(i) are defined in Section 3.6 as a Permitted Encumbrance,

(ii) are immaterial, individually or in the aggregate, to the respective
Assets and/or Operations, or

(iii) by reason of ad valorem property taxes or assessments payable but
not yet due.

"Person" shall mean any individual, partnership, joint venture, firm ,
corporation, association, trust or other entity or any government or political
subdivision or any agency, department or instrumentality thereof.

"Proceedings" shall have the meaning specified in Section 3.13(a) and 4.5 as to
Unocal and Purchaser respectively.

"Proposed Amendment" shall have the meaning specified in Section 5.6.

"Real Estate" shall mean Owned Real Estate and Leased Real Estate that are not
Retained Assets. All Real Estate is divided into Category A Property or
Category B Property and so identified on Schedule 3.7(a).

"Related Agreements" shall mean this Agreement and:

(i) the Inventory Bill of Sale (Exhibit (C);

(ii) the Kansas City Lease (Exhibit (D);

(iii) the Software License Agreement (Exhibit E);

(iv) the Option to Purchase Agreements (Exhibit F);

(v) the Option to Assume Leases (Exhibit G)

(vi) the Trade Accounts Payable Assumption (Exhibit H)

(vii) the Trade Accounts Receivable Assignment (Exhibit I);

(viii) the Operating Agreement (Exhibit J);

(ix) the Hydrocarbon Supply Agreement (Exhibit K);

(x) the Assignment and Assumption of Leases (Exhibit L);

(xi) the Bridging Services Agreement (Exhibit R);

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(xii) the Carteret Operating Agreement, (Exhibit S);

(xiii) the Clark, New Jersey Sublease (Exhibit U);

and other agreements between Unocal and Purchaser referenced herein or
attached hereto as Exhibits.

"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing of
any Chemical Substance into the environment of any kind whatsoever (including
also the abandonment or discarding of barrels, containers, tanks or
other receptacles containing or previously containing any Chemical Substance).

"Retained Assets" shall mean all properties (including any Contracts), other
than the Assets, owned or held by Unocal or any of its Affiliates, whether or
not in connection with or related to the operations, including, without
limitation,

(i) all cash,

(ii) all rights of Unocal and any of its Affiliates under this Agreement,

(iii) the agreements and instruments delivered to Unocal or any of its
Affiliates pursuant to this Agreement,

(iv) any and all Trademarks except to the extent rights in the Trademarks
are granted to Purchaser pursuant to this Agreement, and

(v) other assets specifically set forth on Schedule 1; provided, however,
that no tangible property situated on any Real Estate shall be a Retained
Asset unless it is listed as a Retained Asset on Schedule 1.

"Retained Liabilities" shall have the meaning specified in Section 2.4(a).

"Returns" shall mean all federal, state, local or other governmental income and
franchise tax returns and all sales, use, payroll, withholding and other tax
returns.

"Software License and Assignment" means the permissible assignment by Unocal
to Purchaser of software purchased from a third party and nonexclusive licenses
to use Unocal's proprietary software, substantially in the form of Exhibit E.

"Taking Category B Property Out of Service" shall include but not be limited to
the following:

(i) Lawfully and safely leaving Category B Property in place in accordance
with Unocal's shut-down procedures substantially in the form of Exhibit M
and all Environmental

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Laws and all Legal Requirements for health and safety then in effect;

(ii) disposing of any Chemical Substance or Waste arising out of or
related to the activities under (i) above, in accordance with all
Environmental Laws in effect at the time of such disposal.

"Taxes" shall mean all federal, state and local taxes, assessments, withholdings
or other similar governmental charges and any interest and penalties thereon.

"To Unocal's knowledge" shall mean to the actual knowledge of managerial
personnel employed by Unocal or such knowledge as any such person would
reasonably be expected to have by reason of his or her position with Unocal in
the exercise of his or her normal duties in the ordinary course of business.

"Trade Accounts Payable" shall mean all of Unocal's liabilities and obligations
which were incurred in the ordinary course of the operations prior to the
Closing Date for Inventory, raw materials, operating supplies, utilities, and
services (other than employment), taken from the books of Unocal as of the close
of business on the Closing Date and which relate to Assets or operations
including sales taxes listed on the invoices. In no event shall Trade Accounts
Payable include Taxes payable by Unocal, or intracompany amounts payable by
Unocal, or amounts payable to an Affiliate.

"Trade Accounts Payable Assumption" shall mean the assumption document whereby
Purchaser assumes the Trade Accounts Payable substantially in the form of
Exhibit H.

"Trade Accounts Receivable" shall mean all of Unocal's accounts receivable from
third parties which arose in the ordinary course of the Operations prior to the
Closing Date, and taken from the books of Unocal as of the close of business on
the Closing Date and which relate to Assets or Operations but shall not include
accounts receivable in any of the following categories:

(i) Those which have been referred to a collection agency;

(ii) Receivables from customers involved in bankruptcy, insolvency or
similar proceedings;

(ii) Receivables subject to disputes, claims or active litigation; or

(iv) Receivables then outstanding more than 45 days past their due date.

"Trade Accounts Receivable Assignment" shall mean the assignment document from
Unocal to Purchaser conveying the Trade Accounts Receivable substantially in the
form of Exhibit I.

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"Trademarks" shall mean the registered product marks LACTOL, NAPHTOLITE,
TEXTILE, and RETARDSOL that Purchaser shall be permitted to use only on
commercial literature, written quotes, purchase orders, bills of lading or
invoices if and when the product being used or sold is a Unocal product.

"Transferred Employee" shall mean any employee of Unocal who becomes an employee
of Purchaser as set forth in Section 5.7(b).

"Waste" shall mean any Chemical Substance subject to regulation as under any
Environmental Laws, including, without limitation, solid waste, hazardous waste,
residual waste and industrial waste.

"Working Capital Balance" shall mean the difference between sixty one million
dollars ($61,000,000) and the total of the Exact Inventory Value and Exact Trade
Accounts Receivable Value less the Exact Trade Accounts Payable Value.

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ARTICLE TWO - CLOSING; TRANSACTIONS;
LIMITED ASSUMPTION OF LIABILITIES

2.1 Closing

The closing of the transactions provided for in this Agreement (the "Closing")
shall be held on February 28, 1992 at Schaumburg, Illinois or such other date
and place as the parties hereto may designate by mutual consent (the "Closing
Date").

2.2 Transactions Transfers of Assets and Deliveries of Monies

Subject to the prior or simultaneous:

(i) satisfaction or waiver of all the conditions precedent specified
in Section 6.1 in the case of Purchaser; and

(ii) satisfaction or waiver of all the conditions precedent specified
in Section 6.2 in the case of Unocal,

the following shall take place:

(a) The Closing. The purchase and sale of all the Assets, except the
Category B Properties listed on Schedule 3.7(a), shall be consummated on
the Closing Date and shall be effective as of the Effective Time. The
following transactions shall be deemed to take place simultaneously:

(i) Purchaser shall deliver to Unocal eighty five million
dollars ($85,000,000) on the Closing Date as payment for the
Chemicals Distribution Business, including the Assets, and
Operations, subject to adjustment as provided for in Section 9;

(ii) Unocal shall use its best efforts to deliver duly executed
Deeds for the Owned Real Estate at Conshohocken, PA; Dallas, TX;
Fairfield, CA; Houston, TX; Lemont, IL; Nashville, TN; and St.
Paul, MN.;

(iii) If, despite Unocal's best effort, a Deed for any of the
property cannot be delivered on the Closing Date, Unocal shall,
until the transfer of title is accomplished by transfer of a Deed,
operate the affected property pursuant to the same terms
substantially in the form of Exhibit S;

(iv) Unocal will use its best efforts to secure approval from
the State of New Jersey Department of Environmental Protection of
an Administrative Consent Order, allowing Unocal to transfer title
to the Carteret, New Jersey facility and if successful, Unoca1
shall deliver a Deed for that property at
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Closing. In the event that the delivery of a duly executed Deed
for the Carteret, New Jersey property is delayed past Closing Date
by applicable laws or regulation, Unocal will continue to use its
best efforts to secure approval from New Jersey to transfer the
title to the Carteret, New Jersey property to Purchaser. In the
interim period between Closing and delivery of a Deed following
approval from the applicable authorities to transfer title, Unocal
shall operate the Carteret, New Jersey facility pursuant to the
terms of the Carteret Operating Agreement substantially in the
form of Exhibit S.

(iv) Unocal shall deliver duly executed documents transferring
title to all owned automobiles, trucks and any other personal
property where title is evidenced by registry with a governmental
body.

(v) Unocal shall deliver a duly executed Asset Bill of Sale
substantially in the form of Exhibit A.

(vi) The parties shall execute duplicate originals of an
Assignment and Assumption of Leases in the form of Exhibit L for
Leased Personal Property that is to be assigned or assumed at the
Effective Time.

(vii) Unocal shall execute and deliver to Purchaser duly executed
Trade Accounts Receivable Assignment in the form of Exhibit I.

(viii) Purchaser shall deliver a duly executed Trade Accounts
Payable Assumption in the form of Exhibit H.

(ix) Unocal shall execute and deliver to Purchaser such other
documents as reasonably requested by Purchaser to vest title in
Purchaser of all Assets other than those described in (ii) above
owned by Unocal and to assign to Purchaser all of Unocal's rights
in Assets leased and assignable by Unocal, all of aforesaid
pursuant to the provisions of this Agreement.

(x) The parties shall execute and deliver no less than two
duplicate originals of the Related Agreements and other agreements
referenced herein or attached hereto as Exhibits to be executed by
the parties at the closing.

(xi) Unocal shall execute and deliver to Purchaser a Certificate
of No Additional Liens and Encumbrances substantially in the form
of Exhibit T.

(xii) Unocal shall execute and deliver to Purchaser, Options to
Purchase for all Owned Real Property which appear on Schedule
3.7(a) and which Unocal has not

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<PAGE> 22

delivered a Deed pursuant to (ii) above substantially in the form
of Exhibit F.

(b) Payments After Closing

(i) Unocal shall deliver to Purchaser:

(A) six hundred thousand ($600,000) on the twelfth month
anniversary date of the Closing Date; and

(B) five hundred thousand ($500,000) on the
twenty-fourth month anniversary date of the Closing
Date; and

(D) three hundred thousand ($300,000) on the
forty-eighth month anniversary date of the Closing
Date; and

(E) two hundred thousand ($200,000) on the sixtieth
month anniversary date of the Closing Date.

The Base Rate will apply to any payment pursuant to this Section
2.2(b) that is made late.

(i) three years from the Closing Date for each Distribution
Center except for Tampa, FL;

(ii) two years for the Distribution Center and terminal at
Tampa, Florida; and

(iii) one year for all other terminals listed on Schedule 3.7(a),

elect to take title to any or all sites of the Owned Real Estate in
accordance with the Option to Purchase Agreements, or assume the lease of
Leased Real Estate in accordance with the Option to Assume Leases.
Forthwith upon receipt of any such notice, in the case of Owned Real
Estate, Unocal shall convey the title to Purchaser by the form of Deed for
that property or in the case of Leased Real Estate, Unocal and Purchaser
shall enter into an Assignment and Assumption of Lease for that property.
All of the provisions respecting the transfer of title and assignment of
leases of Category A Property shall apply to any such transfer of
interests of Category B Property.

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2.3 Method of Payment

All amounts to be paid or transferred to any Person shall be paid in immediately
available funds by wire transfer to a U.S. bank account designated by such
Person.

2.4 Limited Assumption of Liabilities

(a) "Retained Liabilities" shall mean, to the extent not assumed by
Purchaser elsewhere in this Agreement, any and all liabilities (whether
known, unknown, accrued, absolute, contingent or otherwise) that arose,
existed or were incurred at or before the Effective Time, regardless of
when payable. For the purposes of the immediately preceding sentence, any
obligations or liabilities (whether under a Contract, at common law or
otherwise) or claims or causes of action that arise out of a transaction
or occurrence shall be deemed to have been incurred at the time of such
transaction or occurrence, irrespective of the date or time on which such
obligation, liability, claim or cause of action may be asserted.

(b) Upon the condition that the Closing shall occur, Purchaser hereby
assumes and agrees to discharge, effective at and after the Effective
Time, any and all liabilities and obligations (the "Assumed Liabilities")
of Unocal:

(i) under any contract or Material Contracts which are related
to the Operations;

(ii) for Environmental Compliance Costs, Environmental Claims or
Environmental Cleanup Liability resulting from the Assets or
Operations (but specifically excluding any such liability to the
extent directly resulting from the off-site use, treatment,
handling, storage, disposal or transportation of any Chemical
Substance),

(A) if such costs, claims or liability are not
identified by a Claim Notice within one (1) year after the
actual transfer of title or assumption of lease for the
respective Real Estate in Category A Property or Category B
Property, not to exceed three years from the Effective
Time, subject to Section 2.6, Allocation of Environmental
Cleanup Liabilities,

(B) with respect to Environmental Compliance Costs for
both Category A and B Properties, for which a Claim Notice
is not delivered on or prior to one year after the
Effective Time,

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<PAGE> 24

(iii) reimbursement to Unocal of all Costs of Taking Category B
Property Out of Service as set forth on Exhibit M, except for the
terminals at Tampa, FL, Wilmington, NC and East Providence, RI;

(iv) subject to the terms of Section 7.2, for any personal
injury claims of Purchaser's employees or any other persons
arising out of or related to their presence on the premises of
Purchaser arising out of the use of the Assets or conduct of
Operations or exposure to Chemical Substances after the Closing
Date except for claims resulting from Unocal's negligent acts or
omissions committed after transfer of title, provided, however,
that the mere presence of Chemical Substances on the premises
shall not be considered negligence for the purpose of this
sub-section; and provided, further, that for any such claim based
upon actual, threatened or alleged personal injury from exposure
to a Chemical Substance or workplace conditions after the Closing
Date, the provisions of Section 7.2 shall prevail and the date of
transfer of title shall govern the division of such liability for
any exposure after that date;

(v) that Purchaser is obligated to assume or discharge pursuant
to Section 2.2(a)(vii) for Trade Accounts Payable, Section 9.1 for
employee benefits, Section 9.3 for transfer taxes or Section 9.4
for certain other expenses;

(vi) provided that, except in accordance with any Option to
Purchase Agreement, in no event shall the Assumed Liabilities
include any liability or obligation of Unocal or its Affiliates:

(A) subject to Section 9.6, under any Material Contracts
in existence prior to or at the Effective Time which is not
listed on Schedule 2.4(b)(v)(A);

(B) except as specifically provided in Article Nine, for
salary, wages, incentive payments, benefits, supplies or
overhead for any current or former employees of Unocal,
including, but not limited to, Transferred Employees;

(C) for any federal, state or local taxes, levies or
imposts based upon the income of Unocal or any of its
Affiliates or for any federal, state or local taxes, levies
or imposts attributable to any time prior to the Effective
Time;

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<PAGE> 25

(D) incurred in connection with the negotiation,
preparation, execution or closing of this Agreement or the
transactions provided for hereby including any broker's or
finder's fee or similar compensation;

(E) except as otherwise may be provided in this
Agreement or any Related Agreement, to Unocal or any of
Unocal's Affiliates;

(F) except as provided in 2.4 (b)(ii) and (iii), for any
liability or obligation arising from existing litigation or
litigation arising out of, or relating to an occurrence or
event happening before the Closing Date to the extent that
Purchaser has not contributed to such liability or
obligation;

(G) except as provided in 2.4(b)(ii) and (iii), for any
liability or obligation for death, personal injury, or
illness, or other injury to persons (including employees of
Unocal), property damage, losses, deprivation of rights
(whether based on statute, common law, negligence, breach
of warranty, strict liability or any other theory) caused
by or resulting from

(1) any activity of the Assets or Operations
prior to the Closing Date, or

(2) any defect or claimed defect in or with
respect to any products sold, provided or delivered
by Unocal prior to the Closing Date,

to the extent that Purchaser has not contributed to such
liability or obligation;

(H) for premiums, deposits, or other payments with
respect to coverage under all property and casualty
insurance, medical, dental, vision, accident, life,
disability and any other group benefit insurance
arrangement relating to periods prior to the Effective
Time;

(I) for any liability or obligation related to,
associated with, or arising out of any Unocal employee
benefit plan, contract, program or arrangement, or the
administration of any such plan, contract, program or
arrangement as set forth on Schedule 3.12;

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(J) for any liability related to, associated with or
arising out of the employment or termination of employment
of employees or former employees, sales or service
representatives, agents or former agents, independent
contractors or former independent contractors of Unocal,
whether arising prior to or after the Closing Date but
relating to periods prior to said date, including, without
limiting the generality of the foregoing, all amounts due
to or on behalf of such employees in respect of wages,
salary, bonuses or commissions, vacations or holiday pay,
termination or severance pay;

(K) for any liability or obligation as is included in
the Operations 1990 Statements, to the extent not expressly
assumed by Purchaser;

(L) except as provided in 2.4 (b)(ii) and (iii), for any
liability or obligation, whether similar or dissimilar to
any of the foregoing, including any violation of law,
arising prior to the Closing Date, to the extent not
assumed by Purchaser and to the extent that Purchaser has
not contributed to such liability or obligation;

(M) for any liability or obligation for Category B
Property, the title to which is not transferred, or the
lease for which is not assumed by Purchaser, under Section
7.1(c); except for Taking Category B Properties Out of
Service as provided in Section 2.4(b)(iii);

(N) for off-site use, transportation, storage, disposal
or treatment of any Chemical Substance by or on behalf of
Unocal and its Affiliates; and

(O) that Unocal is obligated to discharge pursuant to
Section 9.3 for transfer taxes or Section 9.4 for certain
other expenses.

(c) Upon the condition that the Closing shall occur, Purchaser agrees
to discharge all liabilities and obligations with respect to the Assets
and Operations that are incurred by Purchaser at or after the Effective
Time;

(d) With respect to liabilities involving exposure to Chemical
Substances or other workplace conditions, the provisions of Section 7.2
will apply.

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<PAGE> 27

2.5 Allocation of Purchase Price

The purchase price shall be allocated by agreement as set forth on Schedule
2.5. Unocal and Purchaser shall prepare their respective federal, state and
local tax returns and all required information returns in a manner consistent
with such allocation.

2.6 Allocation of Environmental cleanup Liabilities

(a) Subject to the requirements for filing a Claim Notice as provided
in Section 2.4(b)(ii) and Article Seven, and to satisfaction of Unocal's
Environmental Cleanup Liability under Section 7.1(c)(iii) Environmental
Cleanup Liabilities shall be allocated between Unocal and Purchaser as
follows:

(i) Any Environmental Cleanup Liability arising from Chemical
Substances that Unocal or its predecessors used and Purchaser
never used shall be one-hundred percent (100%) Unocal's liability;
provided that Purchaser's storage, handling and transfer from the
site of Inventory present at a site at the Effective Time, and not
thereafter otherwise used by Purchaser at the site shall not be
considered used by Purchaser at the site for purposes of this
Section 2.6(a)(i).

(ii) Any Environmental Cleanup Liability from an identified
Release of a Chemical Substance by Purchaser which increases the
amount of Environmental Cleanup Liability to Unocal with respect
to that Chemical Substance, shall be one hundred percent (100%) of
the increase in costs as Purchaser's liability.

(iii) Any Environmental Cleanup Liability from a Chemical
Substance that Unocal or its predecessors used and Purchaser also
used, Unocal shall bear one hundred percent (100%) of liability
for the costs of the work performed during

(A) the first four (4) years after Commencement of
Remedial Activity as defined in Section 2.6(c) under a
Workplan, or

(B) the first five (5) years after the Closing Date,
whichever is longer;

with Unocal's share decreasing by ten percent (10%) and
Purchaser's share increasing by ten percent (10%) for the costs of
the work performed each year beginning with the following year
after the above described four or five year period; and
one-hundred percent (100%) Purchaser's liability for the costs of
the work performed during the tenth

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<PAGE> 28

beginning of the above described shared liability, and for any
year thereafter; except that this Section 2.6(a)(iii) shall not
reduce Purchaser's liability under Section 2.6(a)(ii) when both
Sections apply at the same site.

If Unocal's performance of remedial activity under a Workplan is
delayed

(A) due to a default by Unocal under the Workplan,

(B) due to a suspension of activity at Unocal's request,
or

(C) due to war, riot, storm, earthquake, other natural
force, strike, or government order, which delay Unocal's
performance in excess of 30 consecutive days in any
calendar year, the running of time periods for purposes of
allocation of percentage liability for work performed and
cost due and payable under this Section 2.6(a)(iii) shall
be tolled during the period of such delays. Any other delay
including scheduled or routine maintenance or inspections,
replacement of equipment due to normal wear and tear, or
seasonal or periodic shutdowns consistent with the Workplan
shall not toll the running of any time period under this
Section 2.6(a)(iii).

(iv) Any Environmental Cleanup Liability from a Release of a
Chemical Substance by Purchaser distinct in the type of Chemical
Substance or location from any Chemical Substance or location
related to the Environmental Cleanup Liability of Unocal or caused
by any activity undertaken as part of an environmental study
conducted by Purchaser or on its behalf, shall be one-hundred
percent (100%) Purchaser's liability; except that this Section
2.6(a)(iv) shall not reduce Unocal's liability under Section
2.6(a)(ii).

(b) The term "used" for purposes of this Section 2.6 shall include
manufacture, processing, handling, transfer, receipt, storage, disposal
or other use of a Chemical Substance at a site or separate and distinct
area of a site.

(c) For purposes of this Section 2.6, "Workplan" shall mean a workplan
describing a course of remedial activity approved by a government agency.

For purposes of this Section 2.6, "Commencement of Remedial Activity"
shall mean the date on which remedial action is commenced in accordance
with a Workplan addressing one or more specific Chemical Substance(s) or
environmental

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<PAGE> 29

condition(s), in a specific medium or media (soil, groundwater and/or
surface water) at a specific site or separate and distinct area of a
site, without regard to any amendment, revision, or supplement or
subsequent Workplan related thereto provided, however, that the
Commencement of Remedial Activity shall not in any event be earlier than
the Closing Date. If such remedial activity is commenced in accordance
with a Workplan which is subsequently approved in all material respects
by a government agency, the Commencement of Remedial Activity shall be
deemed to relate back to the actual date of commencement.

Commencement of Remedial Activity to address a different Chemical
Substance, environmental condition, medium, site or separate and distinct
area of a site, shall be regarded as a separate Commencement of Remedial
Activity, but only to the extent of the additional remedial action
required to address that different Chemical Substance, environmental
condition, medium, site or separate and distinct area of a site. The
costs attributed to the additional remedial action shall be the increase
in costs caused by the additional remedial activity.

Remedial investigation, feasibility studies, design, construction of
facilities, emergency work or pilot plant operations shall not be
considered to be Commencement of Remedial Activity. No activity
undertaken pursuant to an amendment, revision, or supplement made to a
Workplan, nor any activity undertaken under a Workplan adopted because of
an Environmental Law effective after one year from the transfer of title
to a site, or three years from the Closing Date, whichever is earlier,
shall be deemed to be a Commencement of Remedial Activity.

(d) Any Environmental Cleanup Liability with regard to any Chemical
Substances that may have migrated off a site shall be treated as part of
the adjacent site with respect to the application of the terms of this
Agreement, including but not limited to the terms of this Section 2.6.

(e) Purchaser may cause environmental studies to be performed at all
Category A Properties within two (2) weeks after the Closing Date and at
all Category B Properties within two (2) weeks after the transfer of
title to any Category B Property. Said environmental studies shall be
performed by a competent independent contractor and shall be comprised of
such sampling and testing with respect to such locations as Purchaser
reasonably determines are necessary or advisable for the identification
and/or quantification of Chemical Substances which contaminates the
surface water, groundwater, land surface or sub-surface strata at such
sites; Purchaser shall inform Unocal of the details of such environmental
studies, and the parties will meet with the independent contractor and
attempt in good faith to agree upon the protocols therefor. If the
parties have so agreed,

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Purchaser will notify Unocal in advance of the commencement of the
environmental study at each site and provide access to the independent
contractor and provide Unocal with the results thereof (including all raw
data) promptly after completion. Unocal shall reimburse Purchaser for
one-half of the costs and expenses of such environmental studies;
provided, however, that where Unocal has suggested, and Purchaser has not
agreed to include, additional or supplemental items, such as new wells,
in said environmental studies, then Unocal may conduct such studies
independently and shall pay the entire cost and expense of such
additional and supplemental items. If Unocal has reimbursed Purchaser as
set forth above, neither party's cost and expense in such regard shall be
Damages for which either shall be liable to indemnify the other pursuant
to Article 7 of the Agreement. Nothing contained herein shall otherwise
define or limit the respective rights and obligations of either party
under this Agreement.

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<PAGE> 31

ARTICLE THREE - REPRESENTATIONS AND WARRANTIES OF UNOCAL

Unocal represents and warrants to Purchaser that:

3.1 Organization

(a) Unocal is a corporation duly organized under the laws of
California.

(b) Unocal is validly existing and in good standing under the laws of
California.

(c) Unocal has the full power and authority to own, lease and
operate its properties and to carry on its businesses as now being
conducted.

(d) Unocal is duly qualified or licensed to do business and in good
standing in all jurisdictions in which the character of the Assets owned
or leased by it or the nature of the Operations conducted by it requires
it to be so qualified, except where failure to be so qualified would be
immaterial to its business in any such jurisdiction.

(e) Prior to the date of this Agreement, Unocal has delivered to
Purchaser true, correct and complete copies of its Articles of
Incorporation and a certificate of good standing from the State of
California.

3.2 Authority; Enforceability

Unoca1 has the corporate power and authority to enter into this Agreement and
each of the Related Agreements and to carry out its a obligations hereunder and
thereunder. The execution and delivery of this Agreement and each of the
Related Agreements and the consummation of the transactions provided for hereby
and thereby have duly authorized by the Board of Directors of Unocal and no
other corporate proceeding on the part of Unocal is necessary to a authorize
execution or delivery of this Agreement or any of the Related Agreements or the
consummation of any of the transactions contemplated hereby or thereby. With
respect to Unocal, each of this Agreement and the Related Agreements is, or
upon its execution will be legal, valid, binding and enforceable in
accordance with its terms.

3.3 Consents

Except as set forth on Schedule 3.3, no consent, waiver, approval,
authorization, exemption, registration, license or declaration ("Consent") of or
by, or filing with, any other Person is required with respect to Unocal or any
of its Affiliates in connection with the execution, delivery or enforceability
of this Agreement, the

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Related Agreements or the consummation of any of the transactions provided for
hereby or thereby, other than

(i) those for which any adverse consequences arising out of the
failure to obtain such consent or to make such filing are immaterial,
individually or in the aggregate, to the respective Assets and/or
Operations, and

(ii) filings under the Hart-Scott-Rodino Antitrust Improvements Act of
1976.

3.4 No Breach

Except as set forth on Schedule 3.4, each of the execution and delivery of
this Agreement, the Related Agreements and the consummation of the transactions
provided for hereby and thereby does not and will not

(i) conflict with or violate any provision of the Articles of
Incorporation or By-Laws of Unocal or any of its Affiliates, .

(ii) result in the creation of any Liens (other than Permitted
Encumbrances) upon any of the Assets,

(iii) constitute a violation by Unocal or any of its Affiliates of any
Legal Requirement, or

(iv) violate or conflict with or constitute a default under or give
rise to any right of termination, cancellation or acceleration under any
Material Contracts to which Unocal or any of its Affiliates is a party
and by which it or its Assets or Operations may be bound.

3.5 Financial Statements: Liabilities

Schedule 3.5 contains the unaudited pro forma balance sheet at December 31,
1990 of the Operations and the unaudited pro forma income statement of the
Operations for the year then ended (collectively, the "Operations 1990
Statements"). Except as disclosed on Schedule 3.5, the Operations 1990
Statements have been

(i) prepared based upon financial data developed in conformity with
generally accepted accounting principles, consistently applied throughout
the period indicated and the structure of the Chemicals Distribution
Business as reflected in the 1990 Statements,

(ii) include all material adjustments necessary to present fairly the
financial condition of the Chemicals Distribution Business as of December
31, 1990 and for the year then ended, and

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<PAGE> 33

(iii) contain no untrue statement of any material fact or omit to state
any material fact required to be stated therein or necessary in
order to make the statement in light of the circumstances under
which it was made, not misleading.

Except as disclosed in the Operations 1990 Statements or as set forth on
Schedule 3.5, as of December 31, 1990 the Operations did not and, except for
such as have been incurred in the ordinary course of business, the Operations do
not have, any 1iabilities, debts or obligations, accrued, absolute, contingent
or otherwise, whether due or to become due:

(i) that are of a type which would be required to be reflected or
disclosed in a balance sheet or income statement under generally
accepted accounting principles; and

(ii) which are material to the financial condition of the Assets or the
Operations taken as a whole.

3.6 Title to Property

The exceptions to the titles to the Owned Real Estate as set forth in the
copies of the commitments for title insurance included in Schedule 3.7(a) for
the respective parcels of Owned Real Estate and the Liens described in Schedule
3.6 are the Permitted Encumbrances. If a title commitment set forth in Schedule
3.7(a) fails to disclose any recorded Lien or a Lien otherwise known to the
Title Company against the title to a parcels of Owned Real Estate, and the
Lien shall be deemed to be a Permitted Encumbrance even though it is not
included in Schedule 3.7(a) or Schedule 3.6. Except as set forth in Schedule
3.6, Unocal has, and upon consummation of each transaction contemplated hereby
Purchaser will have, free and clear of all Liens other than Permitted
Encumbrances,

(i) fee simple title to all Owned Real Estate, and Owned Personal
Property,

(ii) the assignable rights to all of the Assets now leased by Unocal,

(iii) subject to Section 9.5, valid and subsisting leasehold estates in
all of the Leased Real Estate, and

(iv) the rights, subject to Section 9.5, to the same extent as now held
by Unocal and which are transferred by this Agreement, to utilize all the
Assets, to employ all techniques, formulations and procedures, to sell
all its products and to perform all services performed by it.

If, in the opinion of Purchaser, the title commitment, surveys, drawings or
Schedule 3.6 disclose unpermitted encumbrances Purchaser shall advise Unocal in
writing of its objections in sufficient time, as agreed between Unocal and
Purchaser, to allow

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Unocal to initiate procedures to remedy those items so that they are either
eliminated or can be insured over by a title company. In such event, Unocal
shall have until Closing to initiate procedures to remedy said objections. The
title commitment shall be conclusive evidence of good title as therein shown as
to all matters insured by the policy, subject only to the exceptions as therein
stated and further subject to this Section 3.6.

At the Closing, the instruments of transfer and conveyance delivered to
Purchaser will vest in Purchaser fee simple title to al1 the owned Real Estate
and good and marketable title to all other Assets transferred which are owned by
Unocal and its Affiliates, free and clear of all Liens other than Permitted
Encumbrances.

3.7 Real Estate

(a) Schedule 3.7(a) contains a description of each parcel of Real
Estate. Owned Real Estate is described in the respective commitment for
title insurance for each parcel of owned Real Estate. Leased Real Estate
is described in the respective lease agreement for each parcel of Leased
Real Estate owned by or leased to Unocal or any of its Affiliates which
is to be conveyed or, subject to Section 9.5, otherwise transferred to
Purchaser pursuant to this Agreement. Unocal has not granted any options
nor is it bound by any contractual obligations (including unrevoked
offers that have expired more than six months prior to the date hereof)
to sell or dispose of any interest in the Real Estate except for the
right of first refusal extended to Rohm and Hans Company related to the
Charlotte, North Carolina facility as defined in the "Butadiene Transfer
Agreement". All of the buildings, structures and appurtenances situated
on the Real Estate listed in Schedule 3.7(a) are maintained in accordance
with Unocal's customary usage and maintenance practices.

(b) Purchaser shall procure policies of title insurance (without
coverage for the legal description and encroachments); payments for such
insurance shall be the responsibility of the Party as set forth in
Schedule 3.7(b). Unocal will comply with all requirements of the title
company set forth in the commitments for title insurance set forth on
Schedule 3.7(a).

(c) Each lease which comprises the Leased Real Estate is a valid and
binding obligation of Unocal, to the best of Unocal's knowledge is the
valid and binding obligation of the other party thereto, and is in full
force and effect. There are no known defaults relating to any such lease
on the part of Unocal and to the best of Unocal's knowledge, no event has
occurred which (whether with or without notice, lapse of time or the
happening or occurrence of any other event or combination of events)
would constitute a default by any other party under any of the leases.

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(d) Schedules 3.6 and 3.7(a) set forth a list of all material
easements, licenses, rights of way, variances, or similar arrangements in
respect of the use of any of the Real Estate.

3.8 This Section intentionally left blank.

3.9 Compliance with Laws

Except as set forth on Schedule 3.9, with respect to the Assets and operations
except for terminals, Unocal and each of its Affiliates are to Unocal's
knowledge in compliance in all respects (other than noncompliance that is
immaterial, individually or in the aggregate to the respective Assets and/or
Operations) with all Judgments and Legal Requirements in effect, and to Unocal's
knowledge, there are no outstanding assessments, pending or threatened actions,
causes of action, claims, complaints, demands, orders, prosecutions or suits
against Unocal pursuant to or under any such Legal Requirements.

3.10 Outstanding Commitments

(a) To Unocal's knowledge, Schedule 2.4(b)(v)(A) and Schedule 3.7(a)
contain an accurate and complete list of all Material Contracts, to which
Unocal or any of its Affiliates is a party, that relate primarily to the
Assets or the Operations.

(b) Prior to the date of this Agreement, Unocal has delivered to
Purchaser true, correct and complete copies of all of the Material
Contracts listed on Schedule 2.4(b)(v)(A) except those contracts for
which permission to disclose information has not been obtained but has
been so identified on Schedule 2.4(b)(v)(A).

(c) All the Material Contracts set forth in Schedule 2.4(b)(v)(A) and
Schedule 3.7(a) are valid and binding obligations on the part of Unocal,
and, to Unocal's knowledge, of the other parties thereto, and are in full
force and effect. There are no known defaults thereunder by Unocal or by
any other party to any such agreement or contract; and no known event has
occurred which (whether with or without notice, lapses of time or the
happening or occurrence of any other event or combination of events)
would constitute a breach or default by Unocal or by any other party to
any such agreement or contract.

3.11 Employee Matters

Schedule 3.11 sets forth those persons who are proposed to be the transferred
Employees. Except for employees covered by collective

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<PAGE> 36

bargaining agreements, the rates of pay of such individuals are not subject to
any contractual obligations. Unocal shall include on Schedule 3.11, along with
each employee's name, each such employee's Social Security number, hourly rate
or bi-weekly salary, date of hire and job title.

Operations personnel required pursuant to the Operating Agreement at any
Category 3 Property will not be available for transfer to Purchaser until
Purchaser takes title to the property or the 0perating Agreement for the
property terminates, whichever occurs first, except that Unocal retains the
right to delay transferring necessary personnel for such time that is required
to Take Category B Property Out of Service.

3.12 Employment Benefits

Schedule 3.12 contains a true and complete list of all employment contracts,
stock option, stock purchase, incentive, bonus, pension, superannuation,
retirement, profit sharing, group insurance, death, disability, employee
welfare, sick leave, severance, non-qualified deferred compensation or other
similar fringe or employee benefit plans, pursuant to which the Transferred
Employees of Unocal are covered (the "Employee Plans") and summary plan
descriptions.

3.13 Actions and Proceedings

(a) Except as set forth on Schedule 3.13(a), to Unocal's knowledge, as
of the Closing Date, there is no action, suit, government
investigation, claim or legal, administrative or arbitration proceeding
(each a "Proceeding" and collectively, "Proceedings") pending or
threatened in a writing received by Unocal or orally to regional managers
and their superiors in the Industrial Products Group, Unocal Chemicals
and Minerals Division in Unocal's reasonable discretion, represents a
serious threat, whether or not the defense thereof or liability in
respect thereof is covered by policies of insurance, nor any Judgment
(that has not been discharged), in each case involving or affecting any
of the Assets or Operations seeking

(i) compensation in an amount in excess of ten thousand
dollars ($10,000),

(ii) compensation in an unspecified amount or

(iii) any injunctive relief, except for such injunctive
relief that if granted would be immaterial,
individually or in the aggregate, to the respective

(b) To Unocal's knowledge, except as set forth on Schedule 3.13(b), no
Proceeding is pending or threatened in a writing received by Unocal or
orally to regional managers and their

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<PAGE> 37

superiors in the Unocal Chemicals and Minerals Division in Unocal's
reasonable discretion, represents a serious threat, before any court,
arbitrator or administrative or governmental authority, bureau or agency
to restrain or prohibit this Agreement, or to obtain damages, a discovery
order or other relief in connection with this Agreement or any material
part of the transactions contemplated hereby or thereby.

3.14 Employee Relations

Except, as set forth on Schedule 3.14, since December 31, 1990 and up to the
Closing Date there has not occurred, or to Unocal's knowledge been seriously
threatened, any strikes, slow downs, picketing, work stoppages or other
similar labor activities with respect to employees employed in the Operations.
Except as set forth on Schedule 3.14 no unfair labor practice charge under the
National Labor Relations Act, grievance or arbitration proceeding arising,
out of or under any collective bargaining agreement relating to the
Operations is pending, and no such grievance or providing is to Unocal's
knowledge seriously threatened, except for grievances and proceedings for
which any consequences arising out of an adverse determination would be
immaterial, individually or in the aggregate, to the respective Assets and/or
Operations and, to Unocal's knowledge, there are no known union organizing
drives or union organizing meetings involving employees of the Chemicals
Distribution Business.

3.15 Absence of Certain Changes

Except as set forth on Schedule 3.12 and Schedule 3.15 or provided for or
permitted by this Agreement, since December 31, 1990 and up to the Closing Date:

(i) the Operations have been conducted and the Assets have been used
or held by Unocal and its Affiliates only in the ordinary course of its
business;

(ii) there has not been any material adverse change or changes, alone
or in the aggregate, in the Operations that have been caused by Unocal's
actions;

(iii) Unocal has been involved in no transaction or entered into any
contract other than in the ordinary course of business, and specifically
without limitation of the foregoing, no sales, removals or deliveries of
Assets of any nature have been made or agreed to be made, except in the
ordinary course of business;

(iv) there has been no material casualty or other material loss, damage
or destruction of or to any of the Assets; and

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(v) Unocal has not, other than in the ordinary course of business,

(A) made or agreed to make any material change in any employee benefit
plan, contract, program or arrangement of a nature described in Section
3.12,

(B) constituted or amended any bonus, incentive compensation or similar
plan for any of such employees,

(C) raised the rate of bonuses or commissions or, except in the ordinary
course of personnel practice, salaries, hourly rates or other compensation
for any of such employees, or

(D) entered into any collective bargaining or labor agreement, or
experienced any labor dispute or difficulty

3.16 Brokers

A11 negotiations relating to this Agreement or the Related Agreements and the
transactions contemplated hereby and thereby have been carried on without the
intervention of any Person acting on Behalf of Unocal or its Affiliates in such
manner as to give rise to any valid claim against Purchaser or its Affiliates
for any broker's or finder's fee or similar compensation in connection with
the transactions contemplated hereby or thereby.

3.17 Other Purchaser Liabilities

Other than Permitted Encumbrances and except as:

(i) provided for in this Agreement or Related Agreements,

(ii) set forth on Schedule 3.17 or the Related Agreements;

(iii) approved in writing by Purchaser; or

(iv) caused by Purchaser or its Affiliates

Unocal has not with respect to this Agreement or the Related Agreements,
directly or indirectly, caused, created or caused the creation or imposition of:

(i) any liability or obligation on behalf of Purchaser;

(ii) any Liens to which Purchaser, the Assets or Operations are or will be
subject;

(iii) any Contracts to which Purchaser is a party;

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(iv) any Judgments against Purchaser; or

(v) any claim (contingent, absolute, asserted or unasserted) against
Purchaser, the Assets and Operations.

3.18 Inventory

A Physical count of Inventory taken by Unocal in the ordinary course of business
on December 31, 1991, has been provided to Purchaser on Schedule 3.18. All
Inventory as at said date and thereafter acquired is and shall on the Closing
Date be non-obsolete and merchantable as described in the definition of
Inventory.

3.19 Trade Accounts Payable

Unocal has previously provided Purchaser a complete and accurate list of all
Trade Accounts Payable and accruals as of December 31, 1991.

3.20 Trade Accounts Receivable

Unocal has previously provided Purchaser a complete and accurate list of all
Trade Accounts Receivable as of December 31, 1991.

3.21 Customers and Suppliers

Unocal has on the date of this Agreement provided to Purchaser a complete and
accurate list of all of Unocal's customers and for the Chemicals Distribution
Business as of December 31, 1990, attached hereto as Schedule 3.21, and a
complete and accurate list of all of Unocal's suppliers as of December 31,
1991. There are no known material claims or controversies pending between
Unocal and its customers or suppliers other than those arising in the ordinary
course of business.

3.22 Condition of Certain Assets

All fixtures, machinery, equipment, repair and replacement parts, vehicles,
furniture and office, computer and laboratory equipment 1isted on Exhibit B are
in good operating condition and repair, and have been maintained in accordance
with Unocal's customary practice for that equipment.

3.23 Tax Matters

Except as set forth on Schedule 3.23, Unocal has timely paid all Taxes and all
interest and penalties thereon due and payable by it for all periods ended on or
prior to the date hereof, or which will

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have been required to be filed on or prior to the Closing Date, the non-payment
of which would result in a lien or encumbrance on any Asset-would otherwise
adversely affect the Operations or would result in Purchaser becoming liable or
responsible therefor. All Taxes (excluding income taxes) assessed against the
Assets or Operations for the year 1991 and all prior years and due before the
C1osing Date have been paid.

3.24 No Business Relationship with South Africa

With respect to the Chemicals Distribution Business, Unocal is not engaged in
the sale or export of goods or services, either directly or indirectly, to South
Africa and Namibia, is not engaged in the buying or importing of goods or
services, either directly or indirectly, from South Africa or Namibia; is not a
party to, and has no interest in, any franchise, licensing, or management
agreement with any entity, either public or private, in South Africa or Namibia;
is not engaged in, and is not a party to, any investment, deposit, loan,
borrowing, or credit arrangement or involved in any other financial dealings,
with any entity, either public or private, in South Africa or Namibia; and, is
not owned or controlled (as defined by the beneficial possession of more than
five percent (5%) of the firm's common stock) by any entity, either public or
private, in South Africa or Namibia.

3.25 Permits

Unocal has or has applied for all Permits necessary for the conduct of the
Operations. Each such Permit (a list of which Permits and applications,
including expiration dates, is attached hereto as Schedule 3.25) has been
validly issued and is in full force and effect or an application is presently
pending. Unocal is currently in material compliance with the terms and
conditions of each those Permits.

3.26 Completeness of Information

No representation or warranty by Unocal in this Agreement, or in any Exhibit,
Schedule, certificate, or other instrument furnished to Purchaser by Unocal
pursuant to this Agreement contains or will contain in any untrue statement of a
material fact or fails or will fail to state a material fact necessary to make
the statements contained herein or therein complete or not misleading in any
material respect.

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ARTICLE FOUR - REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to Unocal that:

4.1 Organization

(a) Purchaser is a corporation duly organized under the laws of the State
of Ohio.

(b) Purchaser is validly existing and in good standing under the laws of
its jurisdiction of incorporation.

(c) Purchaser is duly qualified or licensed to do business and in good
standing in all jurisdictions in which the character of the Assets or the
nature of the Operations requires it to be so qualified, except where
failure to be so qualified would be immaterial, individually and in the
aggregate, to its business.

(d) Prior to the date of this Agreement, Purchaser has delivered to Unocal
true, correct and complete copies of its Certificate of Incorporation or
Articles of Incorporation, as the case may be.

4.2 Authority; Enforceability

Purchaser has the corporate power and authority to enter into this Agreement,
each of the Related Agreements and to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement, each of the Related
Agreements and the consummation of the transactions provided for hereby and
thereby have been duly authorized by the Board of Directors of Purchaser and
other corporate proceeding on the part of Purchaser is necessary to
authorize the execution or delivery of this Agreement, any of the Related
Agreements or the consummation of any of the transactions contemplated hereby or
thereby. With respect to Purchaser, each of this Agreement and the Purchaser
Agreements is, or upon its execution and delivery will be legal, valid, binding
and enforceable in accordance with its terms.

4.3 Consents

No Consent of or by, or filing with, any other Person (including, but limited to
any government or political subdivision or any agency, department or
instrumentality thereof) is required with respect to Purchaser or any of its
Affiliates, in connection with the execution, delivery or enforceability of this
Agreement, the Related Agreements or the consummation of any of the transactions
provided for hereby or thereby, other than

(i) those set forth on Schedule 4.3;

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<PAGE> 42

(ii) those for which any adverse consequences arising out of the failure to
obtain such consent or make such filing are immaterial, individually or in
the aggregate, to the respective Assets and/or Operations; and

(iii) filings under the Hart-Scott-Rodino Antitrust Improvements Act of
1976.

4.4 No Breach

Except as set forth on Schedule 4.4, each of the execution and delivery of this
Agreement, the Related Agreements and the consummation of the transactions
provided for hereby and thereby does not and will not

(i) conflict with or violate any provision of the Certificate of
Incorporation, or Articles of Incorporation, as the case may be, or
the By-Laws of Purchaser or any of its Affiliates,

(ii) result in the creation of any Liens (other than Permitted
Encumbrances) upon any of the Assets or

(iii) constitute a violation by Purchaser or any of its Affiliates of any
Legal Requirement.

4.5 Actions and Proceedings

To purchaser's knowledge, except as set forth on Schedule 4.5, no Proceeding or
investigation is pending or threatened before any court, arbitrator or
administrative or governmental authority, bureau or agency to restrain or
prohibit this Agreement, or to obtain material damages, a discovery order or
other material relief in connection with this Agreement or any of the Related
Agreements or any material part of the transactions contemplated hereby or
thereby.

4.6 Brokers

All negotiations relating to this Agreement, the Related Agreements and the
transactions contemplated hereby and thereby have been carried on without the
intervention of any Person acting on behalf of Purchaser or its Affiliates in
such manner as to give rise to any valid claim against Unocal or its Affiliates
for any broker's or finder's fee or similar compensation in connection with the
transactions contemplated hereby or thereby.

4.7 Completeness of information

No representation or warranty by Purchaser in this Agreement, or in any Exhibit,
Schedule, certificate, or other instrument furnished

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<PAGE> 43
to Unocal by Purchaser pursuant to this Agreement contains or will contain any
untrue statement of a material fact or fails or will fail to state a material
fact necessary to make the statements contained herein or therein complete or
not misleading in any material respect.

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ARTICLE FIVE - ACTIONS PRIOR TO CLOSING

5.1 Operations and Actions

Except as contemplated in, or provided for by, this Agreement or any of the
Related Agreements or as required by any applicable Legal Requirement, from the
date hereof until the Effective Time, Unocal agrees that, with respect to the
Assets or the Operations, without the prior written consent of Purchaser:

(a) it and its Affiliates shall not, except in the ordinary course and
consistent with past practice:

(i) amend or modify (except in immaterial respects), terminate or
suspend operations;

(ii) waive any rights (except, in immaterial respects) under any
existing employee benefit plan with respect to the Transferred
Employees or under any Contracts (other than Contracts that are
immaterial, individually or in the aggregate, to the respective
Assets and/or Operations);

(b) neither it nor its Affiliates shall take any action or omit to take
any action which would cause:

(i) any of the representations and warranties of Unocal contained
in Article Three to be untrue and/or incorrect in any material
respect if such representations and warranties were made
immediately after such act or failure to act or

(ii) Unocal to be unable to comply with any of its covenants or
agreements set forth herein or in the Related Agreements; and

(i) maintain the services of, and good relations with, the
distributors, agents, customers and suppliers with whom sales
or purchases, as the case may be, are effected in connection
with the Assets or Operations;

(ii) conduct the Operations in the ordinary course;

(iii) duly comply with all laws and contractual obligations
applicable to it;

(iv) retain the services of its present employees and to encourage
them to continue employment with Purchaser; and

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(v) cooperate with Purchaser in the transfer of the Chemicals
Distribution Business to Purchaser.

From the date hereof until the Effective Time, neither Purchaser nor its
Affiliates shall take any action or omit to take any action without the prior
written consent of Unocal which would cause;

(i) any of the representations and warranties of Purchaser contained in
Article Four to be untrue and/or incorrect in any material respect
if such representations and warranties were made immediately after
such act or failure to act or

(ii) Purchaser to be unable to comply with any of its covenants or
agreements set forth herein or in the Related Agreements.

5.2 Casualty Loss; Condemnation; Injunction

Unocal and Purchaser covenant that if between the date hereof and the Effective
Time:

(a) any of the Assets to be transferred at the Effective Time shall be
destroyed or damaged in whole or in part by fire or other casualty:

(i) Unocal promptly shall notify Purchaser of such occurrence and
the estimated cost of repairing or replacing the affected
Assets;

(ii) if the repair and replacement costs are less than or equal to
one hundred thousand dollars ($5100,000), Unocal shall repair
or replace the affected Assets at its expense and shall
provide Purchaser with written notice of its undertaking to
complete, the estimated completion date for, and a general
outline of such repair or replacement; and

(iii) if the repair and replacement costs are greater than one
hundred thousand dollars ($100,000), Unocal shall notify
Purchaser within thirty (30) days of such casualty as to
whether Unocal elects to repair or replace the affected Assets
at its expense, and

(A) if Unocal does so elect, of the estimated completion
date for, and a general outline of, such repair or
replacement or

(B) if Unocal does not so elect, and Unocal and Purchaser
will negotiate in good faith, the repair or replacement
of the affected Assets or appropriate adjustments to the
purchase price maid bY Purchaser; or

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(b) any of the Assets shall be taken, or any Proceedings are pending or
any of Unocal or its Affiliates is notified of a threatened
Proceeding to take any of the Assets in whole or in part by eminent
domain, the proceeds from the taking shall go to the Purchaser. No
adjustment to the purchase price will be made.

5.3 Inspections

From the date hereof until the Effective Time or, in respect to Category B
Property on Schedule 3.7(a), the date of transfer to Purchaser or terminations
of an Option to Purchase thereof, Unocal shall permit Purchaser and its
representatives access, at Purchaser's sole risk and expense, to inspect and
evaluate the Assets and Operations.

Purchaser shall have the right (except at the La Mirada, California facility) to
enter upon, investigate and collect air, surface water, groundwater and soil
samples, provided that such entry, investigation and sampling shall not
interfere with the normal business and operations of Unocal. Unocal shall
disclose and make available to Purchaser and its representatives all contracts,
books, records, papers, reports, audit reports, documents, plans and drawings
relating to the ownership, operation, maintenance, construction and
environmental investigation and remediation of the Assets and Operations
(subject to existing confidentiality agreements with third parties), including,
to the extent prepared in the ordinary course, such monthly and quarterly
financial statements and operating reports as are related solely to the Assets
and Operations and as may reasonably be necessary or appropriate for any
relevant purposes of investigation and analysis. Upon Purchaser's reasonable
request, Unocal shall attempt to secure waivers of any such confidentiality
agreements. Unocal shall arrange for Purchaser and its representatives to
discuss with appropriate officers, employees, consultants, contractors and
representatives of Unocal such matters related to the transactions provided for
herein as Purchaser reasonably requests.

5.4 Reasonable Efforts

From the date hereof until, as the case may be, the Effective Time or the
transfer of any parcel of Category B Property each of the parties hereto shall
use all reasonable efforts

(i) to cause all conditions to Closing set forth in Article Six to be
satisfied, as the case may be, on the Closing Date or the date of
transfer of a parcel of Category B Property, but only to the extent
that such conditions relate to its or its Affiliates' obligations,
covenants, representations or warranties hereunder and are within
its control;

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(ii) to obtain prior to the Effective Time, or date of transfer of a
parcel of Category B Property, all Consents required for the closing
of the transactions provided for in this Agreement; and

(iii) to help Purchaser obtain all Permits necessary to allow Purchaser,
on and after the Effective Time, to conduct the Operations as they
are currently conducted.

5.5 Transfer or Reissuance of Permits

Without limiting the rights which Purchaser may have under Sections 6.1 and 7.1
of this Agreement, Purchaser may elect by notice to Unocal that following the
Effective Time, Unocal and its Affiliates shall cooperate with any efforts of
Purchaser to complete the actions required to transfer or obtain the issuance of
all such Permits. During any interim between the Effective Time and completion
of the transfer or issuance of any such Permit in Purchaser's name, Unocal shall
provide Purchaser with the benefits of such Permit to the extent permitted by
applicable Legal Requirements and if such benefits are provided to Purchaser,
Purchaser shall observe and abide by the limitations imposed by or in respect of
such Permit. Purchaser shall bear all costs and expenses in connection with any
obligation or liabilities arising subsequent to the Effective Time under any
such Permit. Unocal and/or its Affiliates shall not be required to pay any
consideration or suffer any financial disadvantage to obtain any transfer to, or
issuance in the name of, Purchaser of any Permit. Unocal shall not be
responsible for any delay or refusal by any government agency to issue or
transfer any Permit to Purchaser.

5.6 Amendments to Schedules

If at any time prior to the Closing Date Unocal or Purchaser learns that any
representation contained in Articles Three or Four respectively, is or has
become untrue or incorrect in any material respect, such party shall promptly
notify the other party of

(i) the relevant facts and circumstances and

(ii) the amendments to the Schedules hereto which the notifying party in
good faith believes would be necessary to make the representations
contained in Articles Three or Four respectively, true and correct
in all material respects, in light of such facts and circumstances
(a "Proposed Amendment"). Purchaser and Unocal shall negotiate in
good faith appropriate adjustments, if any, in the price to be paid
by Purchaser under the pertinent Bill of Sale and in the amount of
liability or liabilities to be assumed by Purchaser under Section
2.4(b).

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5.7 Offers of Employment: Transferred Employees

(a) Prior to the Closing Date, Purchaser shall indicate to Unocal in
writing those persons on Schedule 3.11 who have been offered
employment with Purchaser and those who have accepted such
employment. Such offers of employment shall be contingent upon and
effective as of the Closing Date.

Offers of employment to exempt salaried employees of Unocal shall be at
the individual's base salary in effect at the time of such offer.
Purchaser will also recognize any Transferred Employee's salary adjustment
made between the time of any such offer and the Closing Date, pursuant to
established salary plans and within the normal course of business.

Offers of employment to non-exempt salaried and hourly paid employees of
Unocal shall be at the rates and subject to the terms and conditions
otherwise applicable to individuals that Purchaser would consider for
similar positions of employment.

(b) Those employees who accept such offers of employment from Purchaser,
and who

(i) satisfy any work-related physical or medical requirements;

(ii) supply proof of identity and of the right to work in the
United States;

(iii) are actively at work on the Closing Date or within 30 days
thereof; and

(iv) meet such other conditions as are generally prescribed by
Purchaser,

shall become "Transferred Employees," conditioned also upon and effective
as of the Closing.

The "Offer Letter" is attached as Exhibit O. The first day a Transferred
Employee is actively at work with the Purchaser is that employee's
"Employment Date".

(c) Notwithstanding the above, Purchaser shall have no obligation to
offer employment to any individual who is not employed pursuant to
Section 5.7(b) above. Purchaser will, however, agree to consider,
without obligation, for available positions for which they are
qualified, any employee listed on Schedule 3.11 who is available for
active employment, and who applies for employment with Purchaser
within 180 days of Closing. Any such employee employed within 180
days of the Closing will be subject to the provisions of Article
Nine as of his or her Employment Date.

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(d) Purchaser shall be responsible for the process of evaluating and
selecting the Transferred Employees.

(e) Notwithstanding anything to the contrary contained herein, all such
employees who accept an offer of employment with Purchaser shall be
employees-at-will, unless Purchaser expressly enters into a separate
written employment contract with any of such employees, and, in all
other respects not inconsistent with the foregoing and the
provisions of Article Nine, such Transferred Employees shall be
treated in the same manner as any new hire.

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ARTICLE SIX - CONDITIONS PRECEDENT TO OBLIGATIONS OF UNOCAL
AND PURCHASER

6.1 Conditions Precedent to Obligations of Purchaser

The obligations of Purchaser at the Closing are subject to the satisfaction or
waiver at or prior to the Closing Date of each of the conditions set forth
below. Notwithstanding the failure of any one or more of such conditions,
Purchaser may nevertheless proceed with the Closing without satisfaction, in
whole or in part, of any one or more of such conditions, but only with a written
waiver thereof executed by Purchaser.

The conditions referred to above are as follows

(i) All representations and warranties of Unocal contained in this
Agreement and/or in the Related Agreements shall be true and correct
in all respects (except in such respects as are immaterial,
individually or in the aggregate, to the respective Assets and/or
Operations) at and as of the Closing Date or the date specified
therein as though made on and as of such date; Unocal shall have
performed, in all material respects, all agreements and covenants
required by this Agreement and/or the Related Agreements to be
performed by it prior to or at the Closing Date; and at the Closing
Purchaser shall have received a certificate to the foregoing effect
for such performance (except to the extent waived in writing by
Purchaser) dated as of the Closing Date and signed by its duly
authorized officer;

(ii) No Proceeding, other than Proceedings in which an adverse decision
would be immaterial, individually or in the aggregate, to the
respective Assets and/or Operations, shall be pending seeking to
restrain or prohibit or declare illegal, or seeking substantial
damages in connection with:

(A) any material part of the transactions provided for
hereby or by the Related Agreements;

(B) the ownership by Purchaser (including enjoyment of any
rights relating thereto) of the Assets;

(iii) Unocal shall have performed all acts and executed and delivered all
documents which Section 2.2 provides are to be performed or executed
and delivered by it at the Closing;

(iv) Unocal shall have delivered to Purchaser a certificate of its
Secretary or Assistant Secretary to the effect that, as of the
Closing Date, it is not a foreign person as defined in the Internal
Revenue Code and Income Tax Regulations, such

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certificate to be substantially in the form described in Treasury
Regulation Section 1.1445-2(b)(2)(iii)(8) or otherwise within the
requirements of Section 1.1445-2(b)(2) of that regulation;

(v) Any applicable waiting periods or extensions thereof under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules
and regulations of the Federal Trade Commission thereunder shall
have expired without renewed inquiry;

(vi) Neither Purchaser nor Unocal shall have provided notice of its
election to terminate this Agreement pursuant to Article 8;

(vii) Purchaser shall have received from counsel for Unocal, a favorable
opinion, dated the Closing Date, substantially in the form attached
as Exhibit P; and

(viii) except as set forth on Schedule 3.12 or Schedule 3.15 or provided
for or permitted by this Agreement, since December 31, 1990:

(A) the Operations have been conducted and the Assets have been
used or held by Unocal and its Affiliates only in the ordinary
course of business;

(B) there has not been any material adverse change or changes,
alone or in the aggregate, in the business or in the prospects
(financial or otherwise) of the Operations that have been
caused by Unocal's actions;

(C) Unocal has been involved in no transactions or entered into
any contracts other than in the ordinary course of business,
and specifically, without limitation of the foregoing, no
sales, removals or deliveries of Assets of any nature have
been made or agreed to be made, except in the ordinary course
of business;

(D) there has been no material casualty or other material loss,
damage or destruction of or to any of the Assets;

(E) Unocal has not, other than in the ordinary course of business,

(1) made or agreed to make any change in any employee
benefit plan, contract, program or arrangement of a
nature described in Section 3.12,

(2) instituted or amended any bonus, incentive compensation
or similar plan for any of such employees

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(3) raised the rate of bonuses or commissions or, except in
the ordinary course of personnel practice, salaries,
hourly rates or other compensation for any of such
employees, or

(4) entered into any collective bargaining or labor
agreement, or experienced any labor dispute or
difficulty; and

(F) there has been no material adverse change or changes, alone or
in the aggregate, in Unocal's relationships with its
employees, customers, or suppliers other than as may relate to
the transaction contemplated by this Agreement.

6.2 Conditions Precedent to Obligations of Unocal

The obligations of Unocal at the Closing are subject to the satisfaction or
waiver at or prior to the Closing Date of each of the conditions set forth
below. Notwithstanding the failure of any one or more of any of such conditions,
Unocal may nevertheless proceed with the Closing without satisfaction, in whole
or in part, of any one or more of such conditions but only with a written waiver
thereof executed by Unocal.

The conditions referred to above are as follows:

(i) All representations and warranties of Purchaser contained in this
Agreement and/or the Related Agreements shall be true and correct in
all material respects at and as of the Closing Date or the date
specified therein as though made on and as of such date; Purchaser
shall have performed, in all material respects, all agreements and
covenants required by this Agreement and/or the Related Agreements
to be performed by it prior to or at the Closing Date; and at the
Closing Unocal shall have received from Purchaser a certificate to
the foregoing effect for such performance (except to the extent
waived in writing by Unocal) dated as of the Closing Date and signed
by its duly authorized officer;

(ii) No Proceeding to which Purchaser is a party, other than Proceedings
in which an adverse decision would be immaterial, individually or in
the aggregate, to the Assets and/or Operations, shall be pending
seeking to restrain or prohibit or declare illegal, or seeking
substantial damages in connection with:

(A) any material part of the transactions provided for hereby or
by the Related Agreements;

(B) the ownership by Purchaser (including enjoyment of any rights
relating thereto) of the Assets;

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(iii) Purchaser shall have performed all acts, made all payments and
executed and delivered all documents which Section 2.2 provides are
to be performed, made or executed and delivered by it at the
Closing;

(iv) Any applicable waiting periods or extensions thereof under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules
and regulations of the Federal Trade Commission thereunder shall
have expired without renewed inquiry;

(v) Neither Purchaser nor Unocal shall have provided notice of its
election to terminate this Agreement pursuant to Article 8;

(vi) Unocal shall have received from counsel for Purchaser, a favorable
opinion, dated the Closing Date, substantially in the form attached
as Exhibit Q.; and

(vii) No action shall have been brought to prohibit or seek damages for
the execution of this Agreement or the fulfillment of the
transactions contemplated by its terms.

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ARTICLE SEVEN - INDEMNIFICATION

7.1 Indemnification by Unocal

From and after the Effective Time, subject to the provisions of this Article
Seven, Unocal agrees to pay and to indemnify fully, hold harmless and defend
Purchaser and its respective Affiliates, agents, officers, directors, partners,
employees, servants, consultants, representatives, successors and assigns, from
and against any and all claims based upon allegations of and/or Damages (whether
based on negligent acts or omissions, statutory liability, strict liability or
otherwise) arising out of:

(a) subject to the limitations of Section 7.1(c), any material
inaccuracy or material breach as of the Effective Time of any
representation or warranty of Unocal contained in this Agreement or
any certificate delivered pursuant hereto and made at or as of the
Effective Time, or of any covenant or agreement of Unocal contained
in this Agreement;

(b) except as otherwise specifically set forth in this Agreement, any
liability whatsoever (whether known, unknown, accrued, absolute,
contingent or otherwise), which arose or was incurred by Unocal
and/or its Affiliates prior to the Effective Time, other than
Assumed Liabilities and to the extent that Purchaser has not
contributed to such liability or obligation;

(c) (i) (A) Environmental Compliance Costs to the extent these are a
Unocal liability as defined in this Agreement not to exceed
55,000,000 as set forth in Section 7.1(c)(iv);

(B) Environmental Cleanup Liability, to the extent these are
a Unocal liability as defined in this Agreement;

(D) fines and penalties of any nature whatsoever assessed,
levied or asserted against Purchaser or any Indemnified
Party at any time as a result of a violation or alleged
violation, of any Environmental Laws;

that arise out of circumstances or conditions respecting the Assets
or Operations and existing prior to or at the Effective Time;

(ii) except for claims alleging a liability for or directly
resulting from off-site use. transportation.

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storage, disposal or treatment of any Chemical Substance by or on
behalf of Unocal and its Affiliates, Unocal shall have no obligation
under this Section 7.1(c),

(A) for Environmental Claims or Environmental Cleanup
Liability for which a Claim Notice is not delivered on
or prior to one year after the actual transfer of title
or assumption of lease for the respective property in
Category A Property or Category B Property, not to
exceed three years from the Effective Time; and

(B) for Environmental Compliance Costs, for both Category A
Property and Category B Property for which a Claim
Notice is not delivered on or prior to one year after
the Effective Time. Unocal shall not be responsible for
Environmental Compliance Costs at East Providence Rhode
Island; Tampa, Florida; and Wilmington, North Carolina.

If a legal restriction arises which prevents Purchaser from
conducting testing to determine Environmental Cleanup Liabilities
and giving a Claim Notice within such one year period, Purchaser
will be permitted a reasonable extension of time, not to exceed the
period of time equal to the time for which said legal restriction
exists, in which to give such Claim Notice. Both parties will use
their best efforts to avoid the necessity of such an extension;

(iii) Unocal's obligations with respect to any claim that meets the
criteria of a claim for Environmental Cleanup Liability shall
be deemed satisfied:

(A) for Environmental Cleanup Liability as is addressed in
Section 2.6(a)(i), five years after receipt of written
certification or other written acceptance by the
relevant government agency that Unocal has completed
performance of a remedial activity described in a
Workplan or order issued by said agency;

(B) for such Environmental Cleanup Liability as is addressed
in Section 2.6(a)(i), five years after acceptance by the
relevant government agency of Unocal's or Unocal's
contractor's written report recommending that no further
action is appropriate;

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Environmental Cleanup Liability in question is satisfied
which agreement shall not be unreasonably withheld by
Purchaser.

(iv) Furthermore, Unocal's liability to Purchaser for any
Damages or Retained Liabilities directly or indirectly
related to this Agreement regardless of whether Unocal
is alleged to be negligent actively, passively or not at
all, including but not limited to, any Related
Agreements or any Material Contracts, except for Damages
related to liability to Purchaser or to third parties to
the extent due to the sole negligence or willful
misconduct of Unocal, Environmental Cleanup Liability,
Claims Regarding Exposure Before and After the Effective
Time (Section 7.2), Article Eleven, or Article Twelve
off-site transportation, storage, disposal or treatment
of any Chemical Substances by or on behalf of Unocal and
its Affiliates, and Sections 2.2(b), 5.2, 9.1, 9.3, 9.4,
9.7, 9.8, 9.9, 9.10, 9.12 and 9.13 shall not exceed
seven million five hundred thousand dollars
($7,500,000). Notwithstanding any other language in this
Agreement, Unocal's obligations to Purchaser for
Environmental Compliance Costs incurred after the
Effective Time and including costs for work performed or
paid by or on behalf of Unocal and costs of Purchaser
indemnified by or on behalf of Unocal shall not exceed
five million dollars ($5,000,000) in the aggregate and
Environmental Compliance Costs for which Unocal is
obligated to reimburse Purchaser shall be included as
part of the overall seven million five hundred thousand
dollar limit on Damages and indemnifications from Unocal
to Purchaser;

(d) any infringement of any patent by the Assets or the
Operations, except to the extent such infringement is the
result of a modification to the Assets or change in the
Operations after the Effective Time; Provided, however, that
Unocal shall have no obligation under this Section 7.1(d) with
respect to any claim for which a Claim Notice is not delivered
on or prior to the fifth (5th) anniversary of the Effective
Time;

(e) Unocal's negligence or misconduct in its performance of any of
its obligations pursuant to Section 9.6 or 9.7;

(f) any Retained Liabilities:

(g) taxes relating to the Assets or Operations attributable to any
taxable period or portion thereof that ends on or before the
Effective Time;

(h) any qualifying event under COBRA occurring prior to the
Effective Time, pursuant to Section 9.1(g);

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(i) salary, wages, bonuses, payments, employment benefits or
contractual benefits provided by Unocal, pursuant to Section
9.1(h);

(j) severance benefits and unemployment compensation due or
claimed to be due by a Transferred Employee terminated within
four months of such employee's date of hire by Purchaser
pursuant to Section 9.1(i);

(k) except as provided in Section 2.4(b)(iv), any claim for
personal injury or property damage asserted by any third
party, their respective legal representatives, heirs,
beneficiaries, and estates, arising out of or resulting from
Unocal's and its agents, employees and contractors' negligent,
intentional, or otherwise legally actionable conduct in
performing this Agreement or any Related Agreement; and

(1) all losses damages or liabilities that might arise from
Purchaser's or any third party's rights in or use of any
transferred or licensed software.

7.2 Claims Regarding Exposure Before and After the Effective Time

For the purposes of any claim involving actual, threatened or alleged personal
injury arising from exposure to Chemical Substances or from exposure to
workplace conditions, the relevant event or occurrence for the purposes of this
Agreement only shall be deemed to be the exposure to the Chemical Substance and
not the manifestation of any alleged physical, chemical or biological response
to such exposure. By way of example, if such exposure time period were
determined or alleged to be both prior to and continuing on and after the
Effective Time, the obligations to the respective parties hereto would be
apportioned on the basis of the respective lengths and levels of exposure before
and exposure after the Effective Time.

7.3 Indemnification by Purchaser

From and after the Effective Time, subject to the provisions of this Article
Seven, Purchaser agrees to pay and to indemnify fully, hold harmless and defend
Unocal and its respective Affiliates, agents, officers, directors, partners,
employees, servants, Consultants, representatives, successors, and assigns, from
and against any and all claims based upon allegations of and/or Damages (Whether
based on negligent acts or omissions, statutory liability, strict liability or
otherwise) arising out of:

(a) any material inaccuracy or breach as of the Effective Time of any
representation or warranty of Purchaser contained in this Agreement
or any certificate delivered pursuant

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hereto and made at or as of the Effective Time or of any covenant or
agreement of Purchaser contained in this Agreement;

(b) except as otherwise specifically set forth in this Agreement, any
liability whatsoever (whether known, unknown, accrued, absolute,
contingent or otherwise) which arose or was incurred by Purchaser
and/or its Affiliates after the Effective Time or which results from
any violation of any Legal Requirement arising from Purchaser's use
of or conduct under any Permit that is, or the benefits of which
are, provided to Purchaser by Unocal and/or its Affiliates pursuant
to Section 5.5;

(c) Unocal's performance (to the extent such performance is related to
the Operations) under or any claim arising from Unocal's assignment,
transfer sublease or sublicense of any Contract pursuant to Section
9.5, including the reasonable out-of-pocket costs and expenses
incurred by Unocal in performing such Contracts (which costs shall
include, without limitation, payments due under such Contracts but
shall exclude those costs that are the result of Unocal's gross
negligence or willful misconduct);

(d) (i) any Assumed Liabilities, or

(ii) obligations with respect to the Assets or Operations
that are incurred by Purchaser at or after the Effective
Time;

(e) Taxes relating to the Assets or Operations that are incurred
after the Effective Time or attributable to any time after the
Effective Time;

(f) any loss and liability arising with respect to

(i) employee evaluation and selection actions of Purchaser
relating to those persons proposed to be the Transferred
Employees,

(ii) actions of Unocal and its employees with respect to the
selection and evaluation process and

(iii) the transfer of any personnel and/or benefit information
to Purchaser;

(g) any claim for personal injury or property damage asserted by
any third party, their respective legal representatives,
heirs, beneficiaries, and estates, arising out of or resulting
from Purchaser's and its agents, employees and contractors,
negligent, intentional, or otherwise legally actionable
conduct in performing this Agreement or any Related Agreement;
and

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(h) any loss, liability, expense or cost, including costs of suit
and reasonable attorneys fees, which Unocal incurs as a direct
or indirect result of Purchaser's sale or assignment of any
Asset, naming of a nominee or any actions taken by said third
parties with respect to the Assets; provided, however, that in
the event of an Assignment, in accordance with Section 10.7,
an assignment of an Option to Purchase Agreement, an
assignment of an Option to Assume Lease, or a sale of any
Asset by the Purchaser, this Section 7.3(h) shall not require
Purchaser to indemnify Unocal for any liability which would
have been a liability of Unocal under this Agreement if such
assignment or sale by Purchaser had not occurred.

7.4 Method of Asserting Claims, Etc.

The party or parties making a claim under this Article Seven is hereinafter
referred to as the "Indemnified Party" and the party or parties against whom
such claims are asserted under this Article Seven is hereinafter referred to as
the "Indemnifying Party". All claims by any Indemnified Party under this Article
Seven shall be asserted and resolved as follows:

(a) In the event that any claim or demand for which an
Indemnifying Party would be liable to an Indemnified Party
hereunder is asserted against or sought to be collected from
such Indemnified Party by a third party, such Indemnified
Party shall as promptly as is practicable after its receipt of
such claim or demand notify in writing the Indemnifying Party
of such claim or demand, specifying the nature of and specific
basis for such claim or demand and the amount or the estimated
amount thereof to the extent then feasible (which estimate
shall not be conclusive of the final amount of such claim and
demand) (a "Claim Notice"); Provided, however, that any
failure to give such notice will not waive any rights of the
Indemnified Party except to the extent that either the rights
of the Indemnifying Party are actually prejudiced or such
notice is not given within the applicable time periods set
forth in this Agreement.

Anything herein to the contrary notwithstanding, any Claim Notice
hereunder involving Environmental Cleanup Liability or Environmental
Claims which, despite Purchaser's reasonable efforts, does not cite,
or which mistakenly cites, an Environmental Law, shall not be deemed
inadequate, improper or deficient because of such failure or
mistake.

The Indemnifying Party may, and upon request of the Indemnified
Party shall, retain counsel of its choice to represent the
Indemnified Party and any others the Indemnifying Party may
reasonably designate in connection with such claim or demand and
shall pay the fees and disbursements of such counsel with regard
thereto; Provided, however, that any Indemnified Party is hereby
authorized

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prior to the date on which it receives written notice from the
Indemnifying Party designating such counsel to retain counsel whose
reasonable fees and expenses shall be at the expense of the
Indemnifying Party to file any action, answer or other pleading and
take such other action which it shall reasonably deem necessary to
protect its interests or those of the Indemnifying Party until the
date on which the Indemnified Party receives such notice from the
Indemnifying Party.

In the event that the Indemnifying Party shall retain such counsel,
the Indemnified Party shall have the right to retain its own counsel
but the fees and expenses of such counsel shall be at the expense of
the Indemnified Party unless

(i) the Indemnifying Party and the Indemnified Party shall
have mutually agreed to the retention of such counsel;
or

(ii) the named parties to any such proceeding (including, but
not limited to, any impleaded parties) include both the
Indemnifying Party and the Indemnified Party and
representation of both parties by the same counsel would
involve such counsel in an actual or potential conflict
of interest in violation of applicable principles of
professional ethics.

The Indemnifying Party shall not, in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one such firm for all such
Indemnified Parties whether such fees or expenses constitute Damages
or otherwise. If requested by the Indemnifying Party, the
Indemnified Party agrees to cooperate with the Indemnifying Party
and its counsel in contesting any claim or demand that the
Indemnifying Party defends, or, if appropriate and related to the
claim in question, in making any counterclaim against the Person
asserting the third party claim or demand, or any cross-complaint
against any Person. If the Indemnifying Party has accepted
responsibility in writing, no claim or demand that would result in
an Indemnifying Party being liable hereunder may be settled without
the consent of the Indemnifying Party which consent shall not be
unreasonably withheld. Unless the Indemnifying Party shall have
agreed in writing that any and all Damages to the Indemnified Party
related to a claim or demand are fully covered by the indemnities
provided herein, no such claim or demand may be settled without the
consent of the Indemnified Party, which consent will not be
unreasonably withheld. Except with respect to settlements entered
into without the Indemnified Party's consent pursuant to the
immediately preceding sentence, to the extent it shall be determined
that the Indemnified Party shall have no right pursuant to this
Article to be indemnified by the Indemnifying Party, the

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Indemnified Party shall promptly pay to the Indemnifying Party

(i) any amounts previously paid or advanced by the
Indemnifying Party to the Indemnified Party with respect
to such matters pursuant to this Article plus

(ii) interest thereon until paid by the Indemnified Party at
the Base Rate for the period commencing on the date on
which such amount was paid or advanced and ending sixty
(60) days after the date on which it was finally
determined that the Indemnified Party had no such right
to be indemnified and at the Late Payment Rate
thereafter.

(b) In the event the Indemnified Party should have a claim against
the Indemnifying Party hereunder which does not involve a
claim or demand being asserted against or sought to be
collected from it by a third party, the Indemnified Party
shall as promptly as is practical send a Claim Notice with
respect to such claim to the Indemnifying Party; Provided,
however, that any failure to give such notice will not waive
any rights of the Indemnified Party except to the extent that
either the rights of the Indemnifying Party are actually
prejudiced or such notice is not given within the applicable
time periods set forth in this Agreement. If the Indemnifying
Party notifies the Indemnified Party within sixty (60) days of
receipt of such Claim Notice that it does not dispute such
claim, the amount of such claim shall be conclusively deemed a
liability of the Indemnifying Party hereunder and shall be
paid to the Indemnified Party immediately. If the Indemnifying
Party disputes such claim, such dispute shall be resolved by
good faith negotiations between the parties.

(c) From and after the delivery of a Claim Notice hereunder, at
the reasonable request of the Indemnifying Party, the
Indemnified Party shall grant the Indemnifying Party and its
representatives full and complete access to the books, records
and Properties of the Indemnified Party to the extent
reasonably related to the matters with which the Claim Notice
is concerned. The Indemnifying Party will not, and shall
require that its representatives do not, use (except in
connection with such Claim Notice) or disclose to any third
Person other than the Indemnifying Party's representatives
(except as may be required by applicable Legal Requirements)
any information obtained pursuant to this Section 7.4(c) that
is designated as confidential by the Indemnified Party, unless
such information is

(i) generally available to the public other than as the
result of a wrongful act or omission by the Indemnifying
Party

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(ii) already within Indemnifying Party, the knowledge of the

(iii) available to the Indemnifying Party through rights other
than provided in this Section 7.4(c), or

(iv) provided to the Indemnifying Party in writing by a third
party who is under no obligation to the Indemnified
Party to protect the confidentiality thereof.

All such access shall be granted during normal business hours, shall
be subject to the normal safety regulations of the Indemnified
Party, and shall be granted under conditions that will not interfere
with the business and operations of the Indemnified Party. Nothing
in this Section 7.4(c) shall expand or contract the rights or
obligations of the Indemnifying Party with respect to any
information previously provided to the Indemnifying Party pursuant
to any other confidentiality agreement.

7.5 Survival of Representations and Warranties: Limitation of Liabilities

Notwithstanding any investigation conducted or notice or knowledge obtained by
or on behalf of any party hereto, each representation, warranty, agreement or
covenant in this Agreement or in the Schedules or certificates delivered
pursuant to this Agreement which is not by its terms required to be fully
performed, or does not by its own terms expire, on or prior to the Effective
Time shall survive the Closing (including, but not limited to, the delivery and
acceptance of any deed or bill of sale at the Closing), provided however, that
Unocal may for its own purposes without affecting the enforceability of Section
3.5 amend its financial statements after the Closing.

7.6 Right to Cure

Any party that is obligated to indemnify, defend and/or hold harmless any party
pursuant to any provision of this Article Seven or any default of the provisions
of any Related Agreement shall have the right to cure, within a reasonable time
and in a manner reasonably satisfactory to such Person, any matter giving rise
to such obligation; provided, however, that any such cure shall not relieve or
reduce any such obligation to the extent that such cure is inadequate. The
Indemnified Party may, if there is no attempt to cure or if the cure is
inadequate, expend reasonable sums to cure which shall be reimbursed together
with interest at the Base Rate Nothing in this Section shall eliminate either
party's right to terminate pursuant to the terms in a Related Agreement.

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7.7 Construction Contracts

This Agreement' Related Agreements and Material Contracts, shall not be
considered construction contracts, for the purposes of the indemnifications
found therein.

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ARTICLE EIGHT - TERMINATION

8.1 Grounds for Termination

This Agreement may be terminated at any time prior to the Effective Time:

(a) By the written agreement of both Unocal and Purchaser;

(b) By either Purchaser or Unocal if a Judgment (other than a Judgment
for which the adverse consequences arising out of such Judgment are
immaterial to the respective Assets and/or Operations) has been
entered against Purchaser or Unocal restraining, prohibiting,
declaring illegal or awarding substantial damages in connection
with:

(i) any material part of the transactions provided for hereby or
by the Related Agreements;

(ii) the ownership by Purchaser (including enjoyment of all rights
relating thereto) of the Assets; or

(iii) the operation of any of the Operations by Purchaser;

(c) If the economic value of the Assets, Inventory and Operations is
reduced as a result of any damage by fire or other casualty:

(i) upon thirty (30) days' notice by Purchaser if such value is
reduced by more than one hundred thousand dollars ($100,000)
by any damage by fire or other casualty, Unocal elects
pursuant to Section 5.2(a)(iii) not to repair or replace the
affected assets and the parties have not reached agreement
within thirty (30) days after Purchaser's receipt of notice
from Unocal pursuant to Section 5.2(a)(iii); and

(ii) upon thirty (30) days' notice by either party to the other
party if such value is reduced by more than two million
dollars ($2,000,000);

(d) At the sole discretion of either Unocal or Purchaser in the event
the Closing shall not have occurred on or before March 31 1992;

(e) At the sole discretion of either Unocal or Purchaser, if any
applicable waiting periods or extensions thereof under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules
and regulations of the Federal Trade Commission thereunder shall not
have expired or been terminated by March 16, 1992.

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(f) If the facts and circumstances underlying any Proposed Amendment
would have a material and adverse effect on the Assets and/or Operations.

8.2 Effect of Termination

If this Agreement is terminated as permitted under this Section, such
termination shall be without liability of or to any party to this Agreement, or
any shareholder, partner, director, officer, employee, agent, servant,
consultant or representative of such party; provided, however, that, if
termination (other than as permitted in Section 8.1) shall result

(i) from the willful failure of either party to fulfill a condition
(with respect to which such party has the ability to fulfill) to the
performance of any other party, or

(ii) from the willful failure of either party to perform a covenant under
this Agreement,

then such party shall be fully liable for any and all Damages sustained or
incurred by the other party.

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ARTICLE NINE - ACTIONS AFTER THE CLOSING

Upon the condition that the Closing shall have occurred, Purchaser and Unocal
agree that.

9.1 Employee Benefit Matters

(a) Welfare Benefit Plans. Except as indicated below, the years of
service of Transferred Employees with Unocal and its Affiliates
("Prior Service") shall be recognized by Purchaser under its
employee welfare benefit plans and employment policies. Except as
otherwise specifically provided herein, Transferred Employees shall
be eligible for the coverage provided to similarly situated
employees of Purchaser under Purchaser's medical, dental, life
insurance (except for voluntary Accidental Death and Dismemberment
coverage), and long-term disability plans on the day following the
Closing Date; provided, however, that participation under the
long term disability plans shall only commence on the day following
the Closing Date if, as of that day, the Transferred Employees have
satisfied any applicable service requirements thereunder counting
the Prior Service and for those Transferred Employees who do not so
satisfy the service requirements, they shall become eligible to
participate under such plans pursuant to the otherwise applicable
plan terms.

(b) Retirement and Savings Plans. Except as otherwise provided in
Section 9.1(c), Prior Service shall be used by Purchaser for
purposes of vesting and eligibility of participation under
Purchaser's tax-qualified defined benefit and defined contribution
plans and not for any other purposes. Participation under such plans
shall only be available to those Transferred Employees employed in
classifications eligible for such participation.

(c) LESOP. Prior Service shall be used for purposes of satisfying
eligibility for participation but not for vesting under the Ashland
Oil, Inc. Leveraged Employee Stock Ownership Plan ("LESOP").
Transferred Employees who are salaried employees and meet the age
and service requirements under the LESOP as of the Closing Date
shall enter into LESOP participation on the first business day
following the Closing Date. All otherwise eligible Transferred
Employees who do not then meet such requirements and those
Transferred Employees who do not have an Employment Date within 30
days of the Closing Date shall commence participation under the
LESOP on the applicable plan entry date.

(d) Medical Plans. For purposes of determining the level of
reimbursements and/or other compensable benefits available under the
terms of the medical plans (but not including those providing dental
benefits) maintained by the

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which the Transferred Employees enroll, medical expenses actually
incurred during the calendar year 1992 which are applicable towards
the deductibles under the Unocal Medical Plan in which such
Transferred Employees participated shall count towards satisfying
applicable calendar year 1992 deductibles and out-of-pocket maximums
under the Purchaser's medical plans of the same type in which such
Transferred Employees enroll. Except to the extent which may be
otherwise provided below, the Unocal Medical Plan shall cover,
pursuant to its terms, all medical expenses incurred by eligible
participants up to and including the Closing Date. The Unocal
Medical Plan shall also cover the eligible expenses for inpatient
hospital stays of eligible participants which commenced on or prior
to the Closing Date until such participant is released from such
confinement. From the day after Closing Date, the medical plans of
Purchaser in which such Transferred Employees enroll shall cover,
pursuant to their terms, the medical expenses incurred from and
after such day except as limited by the preceding sentence. The
Transferred Employees who participated in health maintenance
organizations ("HMOs") on and prior to the Closing Date shall be
provided the opportunity to enroll in Purchaser's indemnity medical
plan on the same terms and subject to the same conditions as the
Transferred Employees who did not so participate in HMOs. Such
employees shall be offered participation in the HMOs available to
other similarly situated employees of the Purchaser at the time and
in the same manner as such participation is ordinarily offered.
Unocal agrees to extend retiree medical coverage to those
Transferred Employees who were eligible for such coverage had they
retired as of the Closing Date under the provisions of said medical
plan as in effect at the time coverage is elected and as may be
amended thereafter, and Unocal agrees that its medical plan will be
primary with respect to Purchaser's medical plans to the extent any
Transferred Employee is so covered after termination or retirement
from Purchaser. Notwithstanding anything to the contrary contained
herein with regard to the crediting of Prior Service with regard to
the Transferred Employees, no such Prior Service shall be credited
towards any Transferred Employee's eligibility to participate in a
welfare benefit plan providing coverage for retirees except that
those Transferred Employees with five or more years of Prior Service
shall receive credit for five years of Prior Service for purposes of
determining whether they satisfied any prerequisites with regard to
years of service with Purchaser for participation in any retiree
medical or retiree life plan.

(e) Vacation. Unocal shall pay, on or soon after the Closing Date, to
each Transferred Employee, the amount of each such employee's
accrued but unused vacation with Unocal through and including the
Closing Date as determined under the rules applicable to such
employees under Unocal's vacation policy. Such Transferred Employees
as are employed

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with Purchaser shall be entitled to take vacation with Purchaser,
through and including the end of the calendar year in which the
Closing occurs, without pay, in an amount equal to the number of
days represented by the accrued but unused vacation for which Unocal
paid to such employees, as described above. Effective January 1,
1993, such Transferred Employees shall be subject to the vacation
policy of Purchaser otherwise applicable to similarly situated
employees, counting such employee's Prior Service and their service
with Purchaser for this purpose.

(f) Sick Pay. Purchaser shall credit Transferred Employee under its sick
pay plan with the lesser of

(i) the number of non-occupational sick pay hours recognized for
such employee under the Unocal Sick Pay Plan as of Closing
Date,

(ii) the number of hours that would have accrued under Purchaser's
sick pay plan based on the Transferred Employee's Prior
Service or

(iii) 1200 sick pay hours.

Purchaser may adjust the sick pay hours credited to reflect the difference
in plan design.

(g) COBRA Continuation Rights. For purposes of COBRA health continuation
of coverage provisions contained in Section 4980B(f) of the Internal
Revenue Code of 1986 and in Sections 601-608 of the Employee
Retirement Income Security Act of 1974, any employee whose
employment terminates in connection with the consummation of the
transaction contemplated by this Agreement, whether or not such
employee is then employed by Purchaser, shall be considered to have
undergone a termination of employment. Purchaser shall have no
responsibility, obligation or liability under the said COBRA
provisions with respect to any such employee or any former employee
of Unocal or any of its Affiliates who terminated employment or
underwent any other qualifying event under COBRA prior to the
Closing Date.

(h) No Assumption of Liabilities. Regardless of whether any or all of
the Unocal employees associated with the Operations are employed by
Purchaser on or after Closing Date, Purchaser has assumed no
liability for any wages, bonuses, payments, employment benefits or
contractual benefits that were provided by Unocal or any of its
Affiliates to such employees (or former employees who were so
associated with the Operations) including, but not limited to,
retiree medical benefits, retiree life insurance benefits, COBRA
continued health benefits under Section 4980B(f) of the Internal
Revenue Code of 1986 and Sections 60l-608 of the Employee Retirement
Income Security Act of 1974, employment contracts qualified or non-
qualified

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deferred compensation benefits, severance benefits, disability
benefits, sickness benefits, vacation benefits and benefits which
could be payable with respect to services, expenses or other events
that occurred during any such employee's (or former employee's)
association with Unocal or any of its Affiliates under any plan,
policy, or program maintained by or contributed to by Unocal or any
of its Affiliates.

(i) Termination of Transferred Employees. Purchaser will evaluate all
Transferred Employees to determine, in its sole discretion, its
continued need for the position in which he or she is employed or
the individual employee's performance capabilities. Within four
months after any employee's date of hire by Purchaser, Purchaser may
notify Unocal in advance that Purchaser wishes to terminate any
Transferred Employee, and Purchaser will pay the employee severance
benefits, as described on Schedule 9.1(i), giving credit for the
employee's combined service with Unocal and Purchaser and using the
Transferred Employee's base pay as of the Closing Date. Unocal will
repay Purchaser for the amount of said benefits. Any Transferred
Employee who is terminated by Purchaser more than four months, but
less than sixteen months after such employee's date of hire by
Purchaser, will be paid severance benefits by Purchaser according to
the Unocal Termination Allowance Plan (a copy of which is included
in Schedule 3.12 giving credit for the employee's combined service
with Unocal and Purchaser and using not less than the employee's
base pay as of the Closing Date. No payment shall be made by Unocal
to Purchaser for said payment. Notwithstanding anything to the
contrary contained in Section 9.1(a) above, an employee will not
receive any benefits under Purchaser's severance benefits policy
during the periods described above.

(j) Purchaser will assume the responsibility to pay mortgage assistance
allowance payments which include Mortgage Rate Interest differential
and home cost increase supplement to Transferred Employees regarding
any moving policy payment due after the Closing and relating to
locations of such Transferred employees made by Unocal prior to the
Closing.

(k) Purchaser will assume the responsibility to pay all obligations to
Transferred Employees regarding any educational aid payments due
after the Closing and relating to educational aid commitments made
by Unocal to such Transferred Employees prior to the Closing. Unocal
will reimburse Purchaser for any such educational aid payment.

9.2 Further Assurances

Each of the parties hereto shall take such additional action, and Shall
cooperate with one another, as may be reasonably necessary to

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effectuate this Agreement and the Related Agreements and the transactions
contemplated hereby and thereby.

9.3 Payment of Transfer Taxes: Recording Fees

With respect to the transfer of the Real Estate, Purchaser shall pay directly or
reimburse Unocal within thirty (30) days of invoice

(i) all sums required to be paid to any state or local taxing
jurisdiction as sales tax on the transfer of tangible personal
property to the Purchaser;

(ii) any cost of recording the deeds; and

(iii) any survey expenses.

Real property transfer tax, documentary transfer tax or any other tax other than
federal, income tax or franchise tax on account of the consummation of the
transactions contemplated hereby shall be paid by the party responsible by law,
or in the absence of law, by local custom as set forth on Schedule 3.7(b), if
applicable.

9.4 Payment of Certain Expenses Due and Payable After the Effective Time:
Prepaid Expenses

(a) Purchaser shall pay as and when due all invoices and billings for ad
valorem taxes and assessments on all Assets and utility bills due
and payable after the Effective Time, and Unocal shall reimburse
Purchaser within thirty (30) days after invoice for any amounts
under such bills attributable to any period prior to the Effective
Time. To the extent any ad valorem tax bill represents an estimated
amount, Unocal and Purchaser shall make appropriate adjustments
within thirty (30) days after Purchaser's payment of the final tax
bill for the period in question.

(b) The categories of prepaid and accrued expenses listed on Schedule
9.4(b) shall be adjusted ratably between Unocal and Purchaser. The
party having paid such expense shall invoice the other and payment
shall be due thirty (30) days after receipt of the invoice.

(c) Notwithstanding the provisions of Sections 9.4(a) and (b), in no
event shall any reimbursement or adjustment be paid pursuant to this
Section 9.4 for any real estate tax bills or utilities bills that
are Assumed Liabilities.

9.5 Contracts Not Assigned at Closing

To the extent that any Contract that would otherwise be assigned Under this
Agreement is not capable of being assigned, transferred,

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subleased or sublicensed without the consent of or waiver by any other party
thereto or any other Person or if such assignment, transfer, sublease or
sublicense or attempted assignment, transfer, sublease or sublicense would
constitute a breach thereof or a violation of any Legal Requirement, this
Agreement shall not constitute an assignment, transfer, sublease or sublicense,
or an attempted assignment, transfer, sublease or sublicense of any such
Contracts. Unocal shall continue to use its reasonable efforts to obtain an
assignment to Purchaser of Contracts that but for the preceding sentence would
be assigned; provided, however, that Unocal and/or its Affiliates shall not be
required to pay any consideration or suffer any financial disadvantages to
obtain such assignment.

If any contract cannot be assigned, transferred, subleased or sublicensed,
Unocal will, after obtaining the written consent and complete release of Unocal
by the Person with whom it has contracted assign, if requested to do so by
Purchaser, those benefits, duties and obligations under said contract related to
the Chemicals Distribution Business to Purchaser. The refusal of any Person to
consent, whether in whole or in part, by the contracting Person will not create
any liability for Unocal. In the event of an assignment, transfer, sublease or
sublicense by Unocal to Purchaser, Purchaser will assume all related duties and
obligations of Unocal.

9.6 Undisclosed Material Contracts

If there exists at any time after the Effective Time Material Contracts which
existed on the Effective Time, were not listed on Schedule 2.4(b)(v)(A) and
relate primarily to the Operations then, subject to Section 9.5, Purchaser shall
have the option to either

(i) accept such Material Contracts and agree to discharge the
obligations of such Material Contract in exchange for an assignment
from Unocal of the benefits thereof if assignable; or

(ii) reject such Material Contract, without losing any right to claim
damages for Unocal's breach of any representation or warranty
applicable thereto, and have no duty to discharge the obligations of
such Material Contract and no right to the benefits thereof.

9.7 Casualty Repair: Taking Proceeds

(a) If Unocal repairs or replaces any Assets that are destroyed or
damaged in whole or in part by fire or other casualty pursuant to
Section 5.2(a), it shall repair or replace such Assets with
reasonable promptness.

(b) If any of the Assets suffer a taking by eminent domain prior to the
Effective Time, Unocal shall supply Purchaser

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with the proceeds of the taking as and when such proceeds are received by
Unocal, if Purchaser had so agreed to such arrangement pursuant to Section
5.2(b).

9.8 Adjustment to Payment by Purchaser

(a) As soon as posssible after the Closing, Purchaser shall calculate:

(i) the "Exact Inventory Value", which shall be equal to the value
of the Inventory as of the Effective Time calculated as
provided below:

(A) Representatives of Unocal and Purchaser shall
immediately prior to or as soon as possible after the
Closing Date, jointly inspect, measure, take and compute
such inventory, determine what constitutes Inventory,
and shall value the Inventory for the purposes hereof in
accordance with the following valuation methods:

(1) hydrocarbon solvent products, including Inventory
intransit to a facility, supplied solely from The
UNOVEN Company shall be valued as follows:

For the products listed below under the heading
"Aliphatics", Inventory shall be valued on a facility by
facility basis at Unocal's average weighted bulk cost of
acquisition of Regular Mineral Spirits (Product Code
11005) including freight, if any, plus the "Add Charge"
for each listed product. In the event Regular Mineral
Spirits is not inventoried at any location, the average
weighted bulk acquisition cost of Mineral Spirits 75
(Product Code 11006) including freight, if any, shall be
used.

Aliphatics Code Add Charge
- ---------- ---- ----------
<S> <C> <C>

Mineral Spirits 66/3 11104 $ .02 per gal.
Naphthol Spirits 66/3 11103 .035
140 Solvent 66/3 11106 .25
Special Naphtholite
66/3 11101 .02
Rubber Solvent 11001 .05
Lactol Spirits 11135 .05
Roto Solv 11130 .10
Hexane 11487 .10
Heptane 11483 .13
Textile Spirits 11120 .10
</TABLE>

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For Toluene (Product Code 11410) and Xylene (Product
Code 11420), Inventory shall be valued as follows:

Inventory Value = DeWitt's price + $.05 per
gallon

Where DeWitt's price shall be determined by adding the
simple average of the weekly FOB U.S. Gulf Coast spot
barge prices for Nitration Grade Toluene and for Mixed
Xylenes, respectively, for the weeks ending during the
month of Closing as published by DeWitt and Company in
the "Toluene and Xylene Newsletter". If the newsletter
provides a range of prices, the average of all prices
quoted shall be used.

(2) All other Products in Inventory, including
Inventory intransit to a facility, shall be valued
at Unocal's average weighted cost of acquisition,
including freight, if any, on a facility by
facility basis, of such Inventory for the month of
Closing if Closing is on or after the sixteenth
day of the month or the month prior to Closing if
closing is prior to the sixteenth day of the
month.

(3) The value of Inventory packaged by Unocal shall
include the cost of drums, pallets, and other
packaging materials each at Unocal's average
weighted cost of acquisition for the month of
Closing.

(4) For the purpose of valuation of items in category
2, and 3 above, if any particular product or
packaging item was not purchased in the month of
Closing, the most recent invoice price and freight
cost, if any, will be applied.

(B) If there shall be a dispute as to the quantities of
Inventory, such dispute shall be settled by recounting
until there is agreement between the parties. If there
shall be a dispute as to what constitutes Inventory or
to the valuation thereof, such dispute shall be settled,
if possible, by an agreement of the representatives of
the parties, failing which an independent accounting
firm mutually

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<PAGE> 74

agreeable to Unocal and Purchaser, shall decide such a
dispute.

(C) Physical inspection of the Inventory shall include
all bulk and packaged raw materials,
work-in-process, intermediates, finished goods and
containers at each Unocal Inventory stocking
location. Quantities of material intransit shall
be determined by transactional records and
reports. Bulk Inventory will be determined by tank
measurement by sticking the tanks and temperature
correction; packaged inventory by physically
counting and tagging all containers. Both parties
must agree in writing to the Inventory count at
the time of the inspection with no allowance for
further changes.

(ii) The "Exact Trade Accounts Receivable Value", shall
be equal to the value of the Trade Accounts
Receivable as of the Effective Time taken from the
books and records of Unocal; and

(iii) the "Exact Trade Accounts Payable Value", shall be
equal to the sum of all individual Trade Accounts
Payable transactions related to the Assets and
Operations as of the Effective Time taken from the
books and records of Unocal.

(b) Within fifteen (15) business days after Closing Unocal shall submit
to Purchaser the results of each amount determined in Section
9.8(a), including the total, and the details of the calculation of
the Working Capital Balance.

(c) If the Working Capital Balance is positive, then within ten (10)
business days after delivery of Unocal's calculation of the Working
Capital Balance, Purchaser shall pay to Unocal an amount equal to
the Working Capital Balance together with interest thereon at the
Base Rate for the period from the Effective Time through the date on
which such payment is made. If the Working Capital Balance is
negative, then within ten (10) business days after delivery of
Unocal's calculation of the Working Capital Balance, Unocal shall
pay to Purchaser an amount equal to the absolute value of the
Working Capital Balance together with interest thereon at the Base
Rate for the period from the Effective Time through the date on
which such payment is made.

(d) For purposes of this Agreement, purchases and sales of goods shall
be deemed to occur on the date title to the goods is transferred.

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February 14, 1992

<PAGE> 75

9.9 Uncollected Trade Accounts Receivable

Purchaser shall use reasonable efforts to collect said Trade Accounts
Receivable. Unocal shall forthwith reimburse Purchaser the amount of each Trade
Account Receivable that has not been actually collected by Purchaser within 45
days following the individual Trade Accounts Receivable Due Date(s) established
by Unocal, which Purchaser notifies and reassigns to Unocal within 75 days from
the Due Date. Said payment shall include interest on the amount reimbursed at
the Base Rate for the period from the Due Date through the date on which payment
is made. Purchaser will apply all payments received first to the oldest accounts
unless specifically instructed otherwise by the customer.

9.10 Reimbursement for Certain Items

For a period of 4 months following the Closing Date, Unocal will reimburse
Purchaser for:

(a) All costs, including but not limited to, refund of purchase price
and costs of disposal, relating to the return of products of the
Chemicals Distribution Business sold and delivered to customers and
paid for by them prior to the Closing Date;

(b) Offsets, reductions and the like taken by customers of Unocal or its
Affiliates against the Chemicals Distribution Business sales; and

9.11 Cooperation

(a) Unocal and Purchaser will provide each other with such cooperation
and information as they may reasonably request of the other with
regard to a Claim subject to this Agreement or in conducting an
audit or other proceeding in respect of Taxes. Such cooperation
shall include, but not be limited to, making employees available on
a mutually convenient basis to provide information regarding events
relevant to the Claim, or explanation of any documents or
information provided hereunder. Purchaser and Unocal shall not
interfere with each other's performance of any Retained Liabilities
or Assumed Liabilities under this Agreement.

(b) With respect to any Retained Liabilities by Unocal for any
Environmental Claims, Environmental Cleanup Liability, Environmental
Compliance Costs or any claim arising out of Environmental Laws,
Purchaser shall:

(i) allow Unocal and its agents access to any facility:

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ASSET PURCHASE AGREEMENT, CHEMICALS DISTRIUBITON BUSINESS Page 70 of 85
February 14, 1992

<PAGE> 76

(ii) assist Unocal, as requested, in negotiations with third
parties;

(iii) make all books and records related to products, environmental
incidents and other documents related to Chemical Substances
available to Unocal;

(iv) allow Unocal reasonable use of its Real Estate for the purpose
of investigations, construction, repairs, maintenance and
remedial action with respect to the above Claims without rent
or other charge.

(c) Any information obtained under this Section 9.11 shall be kept
confidential, except as may be otherwise necessary in connection
with the handling of a Claim, the conduct of an audit, or other
proceeding.

(d) Each party shall bear all costs and expenses incurred as a result of
its request for assistance over and above the Further Assurances or
cooperation contemplated in Sections 9.2 or this Section 9.11.

(e) (i) With respect to all sites acquired by Purchaser under this
Agreement, nothing herein shall prevent Purchaser from making any
report or performing any act which, in Purchaser's sole discretion,
it determines is required by law; provided however, without limiting
said discretion, that where circumstances reasonably permit,
Purchaser shall first inform consider its views, including any offer
said report or perform said act by Unocal where said report or act
may be related to Retained Liability, Claim or to Purchaser's
knowledge, potential Claim against Unocal. In any event, except for
a Release after the Effective Time as provided below, Purchaser
shall simultaneously with any report to a government agency of any
information which may be related to a Retained Liability, Claim or
potential Claim against Unocal, report such information to Unocal,
including but not limited to copies of all written materials
provided to the agency. All Releases after the Effective Time
reportable to a governmental agency shall be reported to Unocal, as
soon as practical but in any event within two (2) business days
after the Release;

(ii) Further, Purchaser shall maintain a program to record all
observable and otherwise detected Releases, including time, date,
specific location, Chemical Substance, quantity, source, cause, and
witnesses, test data, and measurements where applicable. Such
information and related reports and investigations shall be
maintained in a readily accessible manner and available to audit by
Unocal on request. The program described in this Section shall
continue and all such

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February 14, 1992

<PAGE> 77

information described in this Section shall be retained until all
obligations of Unocal under this Agreement are satisfied. Unocal
shall meet all requirements of this Section 9.11(e) as to each
Category B Property, subject to audit by Purchaser until title to
the specific Property is transferred or the Option to Purchase
Agreement or Option to Assume Lease for said Property expires.
Purchaser may also audit all historical data, to the extent
available, subject to this Section 9.11(e)(ii), as to both Category
A and B Properties.

(f) Except as provided in Section 9.11(e) and (f), with respect to
Unocal's Retained Liabilities, or Claims or potential Claims against
Unocal under this Agreement, Purchaser will not communicate with any
government agency except as agreed to by Unocal in writing, or
otherwise seek to influence the remedy selection or requirements of
any Workplan, order, or permit issued by or subject to approval by
any government agency. Nothing in the foregoing shall limit
Purchaser's right to seek to influence the content of any
legislative or regulatory proposal. Unocal shall copy Purchaser on
all written correspondence with government agencies relating to
Workplan requirements. Unocal also shall keep Purchaser advised on
all material Workplan proposals. Purchaser may submit written
suggestions with respect thereto. Unocal will not unreasonably
refuse to accept the suggestions of Purchaser with respect thereto;
provided, however, that the decision of Unocal to submit to the
appropriate governmental agency, and to proceed with any Workplan
which is approved (or subsequently approved) by the appropriate
governmental agency shall be presumed to be reasonable subject to
rebuttal by Purchaser, provide further, that said presumption shall
not apply to any proposed Workplan requirements which Purchaser
shows will materially interfere with the operations of Purchaser at
such site.

9.12 Preparation of Returns

Unocal shall be responsible for filing all ad valorem tax returns for Assets
held on assessment date January l, 1992, or such other assessment date prior to
the Effective Time. Purchaser shall be responsible for filing all other returns
required to be filed with respect to the Assets after the Closing Date, except
those returns that Unocal is required by federal, state or local laws to file
upon disposition of the Assets and Operations. Unocal will reimburse Purchaser
within thirty (30) days after detailed invoice for any taxes paid (other than
interest and penalties) to the extent attributable to the Assets for any time
prior to the Effective Time. Purchaser will reimburse Unocal within thirty (30)
days after detailed invoice for any taxes paid (other than interest and
penalties) to the extent attributable to the Assets for any time after the
Effective Time.

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February 14, 1992

<PAGE> 78

9.13 Removal of Non-Conforming Inventory and Stored Waste

Subject to Purchaser's obligations under this Agreement with respect to Taking
Category B Properties Out of Service, within ninety days after the actual
transfer of an individual parcel of Category A Property or Category B Property
to Purchaser, or within the time required by Environmental Laws, whichever is
earlier, Unocal will remove all Non-Conforming Inventory and Waste remaining at
such location and, at Unocal's sole cost and expense, sell or dispose of the
same in accordance with Environmental Laws and Legal Requirements. All risk of
loss and responsibility for such NonConforming Inventory and Waste shall be the
sole responsibility of Unocal. Nothing herein shall accelerate the time for
Unocal to respond to any Environmental Cleanup Liability or affect the
obligation of Purchaser to comply with the Claim Notice procedure in Article
Seven with respect to any Environmental Cleanup Liability or limit any
investigation or remedial action (including the storage, handling, treatment or
disposal of materials generated in the course of Unocal's performance of such
investigation or remedial action) pursuant to a Workplan (including a Workplan
covering investigation) as defined in Section 2.6.

9.14 Carteret

Once unocal's Environmental Cleanup Liability is satisfied, Purchaser shall add
or substitute its name on any consent order or Workplan and will provide
adequate bond letter of credit or other security as determined by the relevant
authorities which shall be sufficient to allow Unocal to remove or cancel any
such bond, letter of credit or other security it has in effect.

- --------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT, CHEMICALS DISTRIUBITON BUSINESS Page 73 of 85
February 14, 1992

<PAGE> 79

ARTICLE TEN - MISCELLANEOUS

10.1 Like Kind Exchange

Unocal shall have the option, at or before Closing, to structure the closing of
this transaction in such a manner so as to qualify, in whole or in part, as a
like kind exchange pursuant to Section 1031 of the Internal Revenue Code of 1986
(as amended). Purchaser will cooperate with Unocal in facilitating a like kind
exchange. If Unocal desires such an exchange, Unocal shall timely notify
Purchaser, in writing, of its intent and Unocal shall be responsible for
arrangement of the structure of the exchange, compliance with time limits on
like kind exchanges, the preparation of the appropriate documents to complete
the transaction, and all additional costs, including costs to Purchaser,
directly related thereto.

10.2 Publicity

At all times prior to the Closing Date, Unocal and Purchaser shall cooperate
with the other in the development and distribution of all news releases and
other public disclosures relating to the proposed transactions and to ensure
that no such releases or disclosures are made without prior notice to the other
party; provided that any party may make all disclosures which in its reasonable
opinion are required or prudent under applicable Legal Requirements, including,
but not limited to, regulations of the Securities and Exchange Commission.

10.3 No Shopping

Prior to the Closing Date or termination of this Agreement, Unocal agrees that
it shall not, directly or indirectly,

(a) solicit or initiate the submission of proposals or offers from any
other Person relating to a possible disposition of any of the Assets
or Operations;

(b) solicit, initiate or enter into discussions relating to a possible
disposition of any of the Assets or Operations;

(c) furnish to any other Person any information (not already in the
public domain) relating to the Assets or Operations; or

(d) assist, participate in, facilitate or encourage any effort or
attempt by any other Person to do or seek any of the foregoing,
except in each case as may be required by any applicable Legal
Requirement or in connection with contractual obligations entered
into in the ordinary and usual course of business.

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ASSET PURCHASE AGREEMENT, CHEMICALS DISTRIBUTION BUSINESS Page 74 of 85
February 14, 1992

<PAGE> 80

10.4 Confidentiality. Nondisclosure and Noninterference

(a) Each of Unocal and Purchaser (and their respective Affiliates)
acknowledges that the information and materials (collectively, the
"Confidential Information") disclosed or made available to it by,
and relating to, the other (and its Affiliates) prior to the Closing
Date is confidential.

(b) Each of Unocal and Purchaser (and their respective Affiliates) shall
use reasonable efforts not to make any disclosure of the
Confidential Information to any Person other than officers,
employees, advisers and representatives to whom such disclosure is
necessary or convenient for the completion of the transactions
contemplated by this Agreement or any of the Related Agreements and
except as may be required by a court of competent jurisdiction or
governmental agency. Each of Unocal and Purchaser (and their
respective Affiliates) shall appropriately notify each officer,
employee, adviser and representative to whom any such disclosure is
made that such disclosure is made in confidence and shall be kept in
confidence.

(c) Each of Unocal and Purchaser (and their respective Affiliates)
agrees to use diligent efforts in accordance with customary and
reasonable commercial practice and at least with the same degree of
skill and care that it would manifest in protection of its own
confidential information to protect the Confidential Information.

(d) Each of Unocal and Purchaser (and their respective Affiliates) shall
notify the other promptly in the event that it becomes aware of the
unauthorized possession or use of the Confidential Information (or
any part thereof) by any third Person, including any of its
officers, employees, advisers or representatives. Each of Unocal and
Purchaser (and their respective Affiliates) shall cooperate with the
other in connection with the other's efforts to terminate or prevent
such unauthorized possession or use of its Confidential Information.
Each of Unocal and Purchaser (and their respective Affiliates) shall
pay the other's reasonable out-of-pocket expenses in so cooperating
with the payor in protecting its Confidential Information unless the
unauthorized possession or use of the Confidential Information
resulted from the willful misconduct or gross negligence of the
party otherwise entitled to reimbursement of its expenses.

(e) Each of Unocal and Purchaser (and their respective Affiliates)
acknowledges that the other will suffer injury for which the other
will not have an adequate remedy at law in the event of a breach of
the provisions of this Section 10.4, and that the other shall be
entitled to injunctive relief as is reasonably necessary to prevent
or curtail such breach, whether actual or threatened; provided that,
in no event (including, but not limited to a willful breach of

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ASSET PURCHASE AGREEMENT, CHEMICALS DISTRIBUTION BUSINESS Page 75 of 85
February 14, 1992

<PAGE> 81

this Agreement by Unocal or Purchaser, respectively) shall Unocal or
Purchaser (or their respective Affiliates) be prevented from exercising
all of the rights granted to it hereunder.

(f) Notwithstanding any other provision of this Agreement, the
obligations of each of Unocal and Purchaser (and their respective
Affiliates) to maintain the confidentiality of the Confidential
Information shall not apply to any portion of the Confidential
Information that:

(i) was in the public domain at the time of its disclosure to such
party;

(ii) enters the public domain through no fault of such party;

(iii) was communicated to such party by a third party free of any
obligation or confidence known to such party;

(iv) was developed by officers, employees or advisers or
representatives of such party independently of and without
reference to the Confidential Information; or

(v) was in the possession of such party prior to its disclosure to
such party by the other party.

(g) The obligations of Unocal and Purchaser (and their respective
Affiliates) pursuant to this Section 10.4 shall survive the Closing
and the consummation of the transactions contemplated by this
Agreement or any of the Related Agreements with respect to
Purchaser. After the Closing, Purchaser shall be free of any
obligation with respect to confidential information related to the
Chemicals Distribution Business. In the event of any inconsistency
between the provisions of this Section 10.4 and the confidentiality
provisions of any Related Agreement, the provisions of the Related
Agreement shall control with respect to any matters addressed by
such Related Agreement.

(h) The provisions of Section 10.4 supersede the July 1, 1991
confidentiality agreement entered into between Unocal and Purchaser.

(i) Unocal and its Affiliates shall after the Closing Date hold in
strictest confidence, and not disclose (except as may be
required by law or becomes lawfully obtainable from other
sources), confidential data, and other information relating to
the Chemicals Distribution Business including but not limited
to the finances, products, services, representatives,
suppliers. distributors and customers of the Chemicals

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February 14, 1992

<PAGE> 82
Distribution Business or comprising any part of the Assets and
Operations; and

(ii) Unocal and its Affiliates shall not, for a period of five
(5) years after the Closing Date, without the prior written
consent of Purchaser, directly or knowingly induce any supplier,
employee, agent or other representative or associate of Purchaser
involved in the Chemicals Distribution Business as conducted by
Purchaser to terminate their relationship with Purchaser.

10.5 Costs and Expenses

Except as expressly provided herein or in any Related Agreement, each of the
parties to this Agreement and the Related Agreements shall bear its own expenses
incurred in connection with the negotiation, preparation, execution and closing
of this Agreement and the Related Agreements and the transactions provided for
hereby and thereby.

10.6 Notices

All notices or other communications required or permitted by this Agreement
shall be effective upon receipt and shall be in writing and personally delivered
or mailed by registered or certified mail, return receipt requested, or sent by
telex or facsimile, as follows:

If to Unocal:

Union Oil Company of California
1201 W. 5th Street, P.O. Box 7600
Los Angeles, California 90051
Attn: Vice President, Corporate Budgets, Planning
and Economics
Telex: 188334
Facsimile: (213)977-7468

With a copy to:

Union Oil Company of California
1201 W. 5th Street, P.O. Box 7600
Los Angeles, California 90051
Attn: General Counsel
Telex: 188334
Facsimile: (213)977-7527

If to Purchaser:

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ASSET PURCHASE AGREEMENT, CHEMICALS DISTRIBUTION BUSINESS Page 77 of 85
February 14, 1992

<PAGE> 83

Ashland Chemical, Inc.
5200 Blazer Parkway
Dublin, Ohio 43107
Attn: President
Telex: 245385
Facsimile: (614)889-3823

With a copy to:

Ashland Chemical, Inc.
5200 Blazer Parkway
Dublin, Ohio 43017
Attn: General Counsel
Telex: 245385
Facsimile: (614) 889-4268

or to such other address as hereafter shall be furnished as provided in this
Section 10.6 by any of the parties hereto to the other parties hereto.

Notification shall be in accordance with Section 10.17.

10.7 Assignment

(a) Except as provided in Section 10.7(c) or the Options to Purchase
Agreement and the Options to Assume Lease, neither Unocal nor
Purchaser can assign any of its rights or benefits or delegate any
of its duties or obligations hereunder without the prior written
consent of the other, and any attempted assignment or delegation
which is not permitted under such Section shall be null, void and
without effect. Such consent shall not be unreasonably withheld.

(b) This Agreement may be assigned by Purchaser to an Affiliate of
Purchaser or upon the merger, consolidation or transfer by Purchaser
of all or substantially all of the assets of the Chemicals
Distribution Business to which this Agreement relates. The rights,
benefits, duties and obligations of each party hereto shall inure to
the benefit of, and be binding upon, any successors, assigns or
delegates permitted under Section 10.7(c).

(c) Any party hereto may delegate any of its duties or obligations
hereunder to any Person, but except as otherwise provided herein
such party shall remain liable for the full performance of such
duties and obligations. Unocal may assign its rights, benefits,
duties and obligations under this Agreement without Purchaser's
prior written consent if Unocal elects to structure the Closing as a
like kind exchange, as provided in Section 10.1. Any party hereto
may assign or delegate any of its rights, benefits, duties or
obligations hereunder

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ASSET PURCHASE AGREEMENT, CHEMICALS DISTRIBUTION BUSINESS Page 78 of 85
February 14, 1992

<PAGE> 84

(i) to any Person if it has received the prior written consent
provided for in Section 10.7(a),

(ii) to its legal successor if it merges (whether or not it is the
surviving corporation) or consolidates with one or more other
corporations or

(iii) to any Person to whom it has made any sale, lease, transfer or
other disposition of all or substantially all of its assets;

provided, however, that no party may make an assignment or delegation
described in clauses (ii) and (iii) above unless there are delivered to
the other parties hereto such written assumptions, affirmations and/or
legal opinions as such other parties may reasonably request to preserve
their rights and remedies hereunder.

10.8 Counterparts

This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute a single
instrument.

10.9 Entire Agreement

This Agreement sets forth the entire understanding and agreement between the
parties as to the matters covered herein and supersedes and replaces any prior
understanding, agreement discussion, negotiation or statement of intent, whether
written or oral.

10.10 Headings

The headings contained in this Agreement are for convenience of reference only
and do not qualify or affect in any way the meaning or interpretation of this
Agreement.

10.11 Schedules

The Schedules and Exhibits contained in the executed bound volumes shall be
deemed to be a part of this Agreement. The listing of any item on a Schedule or
Exhibit to this Agreement does not constitute an admission by the party
providing the Schedule that such item is material to the Assets and/or
Operations.

10.12 Governing Law

This Agreement shall be construed and enforced in accordance with, and governed
by, the laws of the State of California as though all parties had created it

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February 14, 1992

<PAGE> 85

10.13 No Third Party Rights

This Agreement is intended to be solely for the benefit of the parties hereto
and is not intended to confer any benefits upon, or create any rights in favor
of, any Person other than the parties hereto, except as expressly provided to
the contrary elsewhere in this Agreement.

10.14 Limitation of Liability

Nothing contained in this Agreement will restrict either party from initiating
any action seeking specific performance or injunctive relief for the breach of
any of the terms of this Agreement.

10.15 Waivers and Amendments

No waiver of any portion of this Agreement shall be deemed to have been made by
any party of any of its rights under this Agreement unless the same shall be by
a written notice that expressly refers to this Section and is signed on its
behalf by its authorized officer. Any such waiver shall constitute a waiver only
with respect to the specific matter described in such writing and shall in no
way impair the rights of the party granting such waiver in any other respect or
at any other time. This Agreement shall not be amended or modified except by an
instrument in writing signed by the party against whom enforcement is sought.

10.16 Severability

If and to the extent that any court of competent jurisdiction holds any
provision (or any part thereof) of this Agreement or Related Agreements to be
illegal, invalid, void or unenforceable, such holding shall in no way affect the
validity and enforceability of the remainder of this Agreement or Related
Agreements to the fullest extent permitted by law as if this Agreement or
Related Agreements did not at the time of execution contain the part, term or
provision held to be invalid.

10.17 Time Computation

In the computation of any period of time provided for in this Agreement or by
law, the day of the act or event from which said period of time runs shall be
excluded and the last day of such period shall be included, unless it is not a
business day, in which case, the period shall be deemed to run until the end of
the next day which is a business day. The term "business day" as used herein
means a calendar day other than a Saturday, Sunday or legal holiday observed by
the Lawyers Title Insurance Company.

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February 14, 1992

<PAGE> 86

correctness of any report or payment under this Article, or to obtain
information as to the amounts payable in case of failure to report or pay. Any
such accountant shall sign a confidentiality agreement agreeable to Unocal
prior to his or her access to any Unocal document or information.

12.5 This Article 12 shall be binding upon Unocal and its Affiliates, and
upon the successor to, or tansferee of, substantially all the business
comprising Unocal's hydrocarbon sales business, and to Unocal's assignee of
the Hydrocarbon Supply Agreement, or either of them.

IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the
date first written above.

ATTEST: UNION OIL COMPANY OF CALIFORNIA

/s/ By: /s/
- ----------------------------- ---------------------------------
Title: Group Vice President
------------------------------

ATTEST: ASHLAND CHEMICAL, INC.

/s/ Robert G. O'Brien By: /s/
- ----------------------------- --------------------------------
Assistant Secretary Title: Group Vice President
------------------------------

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ASSET PURCHASE AGREEMENT, CHEMICALS DISTRIBUTION BUSINESS Page 85 of 85
February 14, 1992

<PAGE> 87

(UNOCAL LETTERHEAD)

February 14, 1992

Phillip D. Askettle
Group Vice President
Ashland Chemical, Inc.
P. O. Box 2219
Columbus, Ohio 43216

Dear Mr. Ashkettle:

In accordance with Article IV (Successor Clause) of the Agreement between Unocal
Chemicals Division, Union Oil Company of California, representing our
Conshohocken Distribution Plant and Truck Drivers, Chauffeurs and Helpers Local
Union No. 384, (affiliated with the Eastern Conference of Teamsters and
International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of
America located in Norristown, Pa.), this letter shall constitute notice of the
existence of said Agreement.

Very truly yours,

/s/ N.E. Lynam
---------------------

NEL/sl
cc: Truck Drivers, Chauffeurs
and Helpers Union No. 384

<PAGE> 88

LIST OF EXHIBITS

Exhibit A - Asset Bill of Sale

Exhibit B - Assets Transferred

Exhibit C - Inventory Bill of Sale

Exhibit D - Kansas City Lease

Exhibit E - Software License Agreement

Exhibit F - Options to Purchase

Exhibit G - Options to Assume Leases

Exhibit H - Trade Accounts Payable Assumption

Exhibit I - Trade Accounts Receivable Assignment

Exhibit J - Operating Agreement

Exhibit K - Hydrocarbon Supply

Exhibit L - Assignment and Assumption of Leases

Exhibit M - Taking Category B Property Out of Service

Exhibit N - Deeds

Exhibit O - The Offer Letter

Exhibit P - Opinion of Counsel for Unocal

Exhibit Q - Opinion of Counsel for Purchaser

Exhibit R - Bridging Services Agreement

Exhibit S - Carteret Operating Agreement

Exhibit T - Certificate of No Additional Liens and
Encumbrances

Exhibit U - Clark, New Jersey Sublease

Exhibit V - Conshohocken Operating Agreement

<PAGE> 1

EXHIBIT 21

Subsidiaries of the Registrant

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name State/Country of Incorporation
- ---- ------------------------------
- --------------------------------------------------------------------------------
<S> <C>
JLM Chemicals, Inc. Delaware
- --------------------------------------------------------------------------------
JLM International, Inc. Delaware
- --------------------------------------------------------------------------------
JLM Marketing, Inc. Delaware
- --------------------------------------------------------------------------------
JLM Terminals, Inc. North Carolina
- --------------------------------------------------------------------------------
JLM Chemicals Canada, Inc. Province of Ontario, Canada
- --------------------------------------------------------------------------------
JLM (IND) Inc. Indiana
- --------------------------------------------------------------------------------
JLM Industries de Venezuela, C.A. Venezuela
- --------------------------------------------------------------------------------
JLM Industries (Europe) B.V. Netherlands
- --------------------------------------------------------------------------------
Olefins Marketing, Inc. Delaware
- --------------------------------------------------------------------------------
Olefins Terminal Corporation Delaware
- --------------------------------------------------------------------------------
SK Chemicals Asia Pte. Ltd. Singapore
- --------------------------------------------------------------------------------
Aurora Chemical, Inc. Texas
- --------------------------------------------------------------------------------
Phoenix Tank Car Corp. Connecticut
- --------------------------------------------------------------------------------
</TABLE>

All subsidiaries conduct business under their legal names.

<PAGE> 1

EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 1 to Registration Statement NO.
333-27843 of JLM Industries, Inc. and subsidiaries on Form S-1 of our reports
relating to the consolidated financial statements of JLM Industries, Inc. and
subsidiaries dated February 19, 1997 (except for Note 18 as to which the date
is July 3, 1997), appearing in the Prospectus, which is part of this
Registration Statement.

We also consent to the reference to us under the headings "Selected Financial
Data" and "Experts" in such Prospectus.

DELOITTE & TOUCHE LLP
Tampa, Florida

July 3, 1997

<PAGE> 1

EXHIBIT 23.3

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 1 to Registration Statement No.
333-27843 of JLM Industries, Inc. and subsidiaries on Form S-1 of our report
relating to the statement of revenues and direct costs of the Blue Island,
Illinois, location of BTL Specialty Resins Corp. for the period from April 1,
1995 through June 7, 1995 dated January 29, 1997 appearing in the Prospectus,
which is part of this Registration Statement.

DELOITTE & TOUCHE LLP
Tampa, Florida

July 3, 1997

<PAGE> 1

EXHIBIT 23.6

CONSENT OF PERSON ABOUT TO BECOME A DIRECTOR

As a person named in this registration statement as being about to
become a director of JLM Industries, Inc., I hereby consent to my
identification in that capacity and to all references to me and information
about me included in or made a part of this registration statement.

/s/ Roger C. Kahn
---------------------
Roger C. Kahn

As of July 3, 1997