Thninas M.

Beason ' May 2,2006 Page 4

with EPA, SDI's only remaining material unliquidated corporate liability is its obligation to FDEP under the CFJ. The likelihood of SDI ever being required to perform a remedy at either the Riviera Beach or Port Salerno sites is remote. EPA is currently the lead agency at both sites, and there is no reasonable likelihood that EPA would relinquish such responsibility. The ROD has been issued for the Riviera Beach site and EPA expects to conclude an agreement in the near fuhure with Honeywell to implement the final remedy. FDEP's consent to the remedy identified in the ROD is noted therein ("The FDEP Southeast District Waste Cleanup Section agrees that the selected remedy provides reasonable assurances to be protective of human health and the environment."). SDI previously contributed the net proceeds of the sale of the Riviera Beach site property and the related escrow account to EPA, as directed by FDEP. SDI also contributed the net proceeds of the sale of the Port Salerno site property to EPAIFDEP, as directed by FDEP. The Port Salerno source removal site remedy has been implemented, at EPA's expense, and EPA will be funding the groundwater monitoring remedy, using federal funds. The covenant not to sue and contribution protection provided to SDI in the ATP Settlement Agreement cover all of such costs. SDI proposes to resolve its remaining liability to FDEP under the CFJ by transferring the remaining balance in the Port Salerno escrow account to FDEP and agreeing, in writing to FDEP, that SDI will comply with its remaining obligations to EPA under the ATP Settlement. In return, SDI seeks FDEP's consent to agree in writing that SDI has satisfied its obligations under the CFJ. FDEP's agreement to such terms will enable the company to make every effort to preserve the jobs of its current work force. In connection with FDEP's review of this request, SDI is prepared to provide FDEP with copies of its Annual Reports for the past five years, or more if the Department seeks earlier data. Alternatively, FDEP can access SDI's Annual 10-K Reports filed with the SEC since 1994 by going to and clicking the investor relations tab. Thank you for taking the time to consider this request. Please let me know if you require any additional information. With kindest regards, I am

Enclosures cc: Shevach Saraf

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