KAISER ALUMINUM CORP (Form: 8-K, Received: 07/06/2006 17:28:38)

/s/ John M. Donnan

Vice President and Secretary

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): June 30, 2006

KAISER ALUMINUM CORPORATION

(Exact Name of Registrant as Specified in its Charter)


Delaware	000-52105	94-3030279
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)


27422 Portola Parkway, Suite 350
Foothill Ranch, California		92610-2831
(Address of Principal Executive Offices)		(Zip Code)

(949) 614-1740
(Registrant’s telephone number, including area code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory Note

In the first quarter of 2002, Kaiser Aluminum Corporation (the “Company”), its subsidiary Kaiser Aluminum & Chemical Corporation (“KACC”) and certain of their affiliates filed petitions for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”), and in the first quarter of 2003, certain additional affiliates of the Company and KACC filed petitions for relief under chapter 11 of the Bankruptcy Code.

On February 6, 2006, the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) entered an order (the “Confirmation Order”) confirming the Second Amended Joint Plan of Reorganization of Kaiser Aluminum Corporation, Kaiser Aluminum & Chemical Corporation and Certain of Their Affiliates, as modified (the “Plan”). A summary of the material features of the Plan is contained in the Company’s Current Report on Form 8-K dated February 6, 2006 and filed with the Securities and Exchange Commission (the “SEC”) on February 7, 2006 (the “Plan Confirmation Form 8-K”).

On May 11, 2006, the District Court for the District of Delaware entered an order affirming the Confirmation Order and adopting the Bankruptcy Court’s findings of fact and conclusions of law regarding confirmation of the Plan. See the Company’s Current Report on Form 8-K dated May 11, 2006 and filed with the SEC on May 17, 2006.

On July 6, 2006 (the “Effective Date”), the Plan became effective and was substantially consummated, whereupon the Company emerged from chapter 11. This is one of two Current Reports on Form 8-K filed by the Company with the SEC on the date hereof describing events relating to the consummation of the Plan. Unless otherwise noted, the events described below occurred on the Effective Date in connection with the consummation of the Plan.

Item 1.01 Entry into a Material Definitive Agreement

Exit Financing Facilities

On the Effective Date, the Company and certain subsidiaries of the Company entered into a new Senior Secured Revolving Credit Agreement with JPMorgan Chase Bank, N. A., as administrative agent and a lender, and the other financial institutions party thereto (the “Revolving Credit Facility”) providing for a $200.0 million revolving credit facility, of which up to a maximum of $60.0 million may be utilized for letters of credit. Under the Revolving Credit Facility, the Company is able to borrow (or obtain letters of credit) from time to time in an aggregate amount equal to the lesser of $200.0 million and a borrowing base comprised of eligible accounts receivable, eligible inventory and certain eligible machinery, equipment and real estate, reduced by certain reserves, all as specified in the Revolving Credit Facility agreement. The Revolving Credit Facility has a five-year term and matures in July 2011, at which time all principal amounts outstanding under the Revolving Credit Facility will be due and payable. Borrowings under the Revolving Credit Facility bear interest at a rate equal to either a base rate or LIBOR, at the Company’s option, plus a specified variable percentage determined by reference to the then remaining borrowing availability under the Revolving Credit Facility. The Revolving Credit Facility may, subject to certain conditions and the agreement of lenders thereunder, be increased to up to $275 million at the request of the Company.

Concurrently with the execution of the Revolving Credit Facility, the Company and certain subsidiaries of the Company also entered into a Term Loan and Guaranty Agreement with JPMorgan Chase Bank, N.A., as administrative agent and a lender, Wilmington Trust Company, as collateral agent, and the other financial institutions party thereto (the “Term Loan Facility”). The Term Loan Facility provides for a $50.0 million delayed draw term loan to Kaiser Aluminum Fabricated Products, LLC, as borrower (“KAFP”), which may be drawn in a single borrowing within the first 30 days after the Effective Date and which is guaranteed by the Company and certain of its domestic operating subsidiaries. The Term Loan Facility has a five-year term and matures in July 2011, at which time all principal amounts outstanding under the Term Loan Facility will be due and payable. Borrowings under the Term Loan Facility bear interest at a rate equal to either a base rate plus 2.50% or LIBOR plus 4.25%, at the Company’s option.

Amounts owed under each of the Revolving Credit Facility and the Term Loan Facility may be accelerated upon the occurrence of various events of default set forth in each such agreement, including, without limitation, the failure to make principal or interest payments when due and breaches of covenants, representations and warranties set forth in each such agreement.

The Revolving Credit Facility is secured by a first priority lien on substantially all of the assets of the Company and certain of its domestic operating subsidiaries that are also borrowers thereunder. The Term Loan Facility is secured by a second lien on substantially all of the assets of KAFP, the Company and the Company’s other domestic operating subsidiaries that are guarantors thereof.

Both credit facilities place restrictions on the ability of the Company and certain of its subsidiaries to, among other things, incur debt, create liens, make investments, pay dividends, sell assets, undertake transactions with affiliates and enter into unrelated lines of business.

The preceding description of the Revolving Credit Facility is a summary and is qualified in its entirety by the Revolving Credit Facility, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference. Similarly, the preceding description of the Term Loan Facility is a summary and is qualified in its entirety by the Term Loan Facility, which is filed as Exhibit 10.2 hereto and is incorporated herein by reference.

Plans, Contracts or Arrangements in Which Directors or Executive Officers Participate

Director Compensation

On the Effective Date, the Company’s Board of Directors (the “Board”) approved the following compensation for each non-employee director:

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an annual retainer of $30,000 per year;

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an annual grant of restricted stock having a value equal to $30,000;

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a fee of $1,500 per day for each meeting of the Board attended in person and $750 per day for each such meeting attended by phone; and

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a fee of $1,500 per day for each Board committee meeting attended in person on a date other than a date on which a meeting of the Board is held and $750 per day for each such meeting attended by phone.

In addition, the Lead Independent Director receives an additional annual retainer of $10,000, the Chairman of the Audit Committee of the Board receives an additional annual retainer of $10,000, the Chairman of the Compensation Committee of the Board (the “Compensation Committee”) receives an additional annual retainer of $5,000 and the Chairman of the Nominating and Corporate Governance Committee of the Board (the “Nominating and Corporate Governance Committee”) receives an additional annual retainer of $5,000, with all such amounts payable at the same time as the annual retainer. Each non-employee director may elect to receive shares of common stock, par value $0.01 per share, of the Company (“Common Stock”) in lieu of any or all of his or her annual retainer, including any additional annual retainer for service as the Lead Independent Director or the Chairman of a committee.

The first payment of annual retainers and the first grant of restricted stock pursuant to the compensation arrangements described above will occur on August 1, 2006. The number of shares of Common Stock to be received in the first grant of restricted stock, as well as the number of shares of Common Stock to be received by any non-employee director electing to receive shares of Common Stock in lieu of any or all of his or her first payment of the annual retainer (including any additional annual retainer), will be based on the average of the closing price per share of Common Stock on each of the 10 consecutive trading days immediately preceding August 1, 2006. See “— 2006 Equity and Performance Incentive Plan” below.

The Company reimburses all directors for reasonable and customary travel and other disbursements relating to meetings of the Board and committees thereof, and non-employee directors will be provided accident insurance with respect to Company-related business travel.

2006 Base Compensation

On the Effective Date, the Compensation Committee approved the annual base compensation rates, payable during continued employment, of the Company’s executive officers. The following table sets forth the annual base compensation of the executive officers of the Company identified below (the “Named Executive Officers”) for 2006 and 2005.


Name and Position	Year	Base Compensation

Jack A. Hockema	2006	$730,000
President, Chief Executive Officer and Director	2005	$730,000

Joseph P. Bellino	2006	$350,000
Executive Vice President and Chief Financial Officer	2005	n/a

John Barneson	2006	$280,000
Senior Vice President and Chief Administrative Officer	2005	$275,000

John M. Donnan	2006	$260,000
Vice President, Secretary and General Counsel	2005	$260,000

Daniel D. Maddox	2006	$225,000
Vice President and Controller	2005	$200,000

2006 Short-Term Incentive Programs and Targets

On the Effective Date, the Compensation Committee approved a short-term incentive plan (the “STI Program”) for 2006. Awards under the STI Program are based upon (a) the Fabricated Products business unit’s operating income plus depreciation and amortization, as adjusted for extraordinary items, which may be spread over a period of years based upon the recommendation of the Chief Executive Officer and approval of the Compensation Committee, (b) the Fabricated Products business unit’s safety performance as measured by total case incident rate, (c) performance of the business to which a participant is assigned, and (d) individual performance objectives. Under the STI Program, a participant may receive between zero to three times the individual’s target amount. Set forth below are the minimum, target and maximum award amounts for each of the Named Executive Officers for 2006.


Name	Minimum		Target		Maximum
	Award Amount		Award Amount		Award Amount
Jack A. Hockema	$	0	$	500,050	$	1,500,150
Joseph P. Bellino	$	0	$	175,000	$	525,000
John Barneson	$	0	$	126,000	$	378,000
John M. Donnan	$	0	$	117,000	$	351,000
Daniel D. Maddox	$	0	$	75,000	$	225,000

A pro rata incentive award is earned based on actual eligibility during the performance period if a participant in the STI Program (a) dies, (b) retires under “normal” retirement (age 62) or in connection with full early retirement (position elimination), (c) is involuntarily terminated due to position elimination, or (d) becomes disabled prior to December 31. Incentive awards are forfeited for all voluntary terminations prior to the end of the performance period (December 31).

The preceding description of the STI Program is a summary and is qualified in its entirety by the Kaiser Aluminum 2006 Short Term Incentive Plan for Key Managers, which is filed as Exhibit 10.4 hereto and incorporated herein by reference.

Employment Agreement with Jack A. Hockema

On the Effective Date, the Company and Jack A. Hockema entered into an employment agreement (the “Hockema Employment Agreement”), pursuant to which Mr. Hockema will continue his duties as President and Chief Executive Officer of the Company and certain of the Company’s subsidiaries. Under the terms of the Hockema Employment Agreement, Mr. Hockema will receive an initial base salary of $730,000 and have an annual short-term incentive target equal to 68.5% of his base salary. The short-term incentive is (a) payable in cash, (b) subject to the Company meeting the applicable underlying performance thresholds, and (c) subject to an annual cap of three times the target. The Hockema Employment Agreement also provides that Mr. Hockema will receive an initial long-term incentive grant of 185,000 restricted shares of Common Stock on the Effective Date and, starting in 2007, annual equity awards (such as restricted stock, stock options and performance shares) with an economic value of 165% of his base salary. See “—Restricted Stock Grants” below. The terms of all equity grants to Mr. Hockema will be similar to the terms of equity grants made to other senior executives at the time they are made, except that, in any event, the grants will provide for full vesting at retirement. Mr. Hockema is also entitled to severance and change-in-control benefits under the terms of the Hockema Employment Agreement. In the event Mr. Hockema’s employment is terminated without cause or terminated by Mr. Hockema with good reason, Mr. Hockema will be entitled to receive a lump-sum payment of two times the sum of his base salary and short-term incentive target, plus the continuation of benefits for two years, and all of Mr. Hockema’s equity awards outstanding at that time will immediately vest. In the event Mr. Hockema’s employment is terminated without cause or terminated by Mr. Hockema with good reason within two years following a change in control, Mr. Hockema will be entitled to receive a lump sum payment of three times the sum of his base salary and short-term incentive target, plus the continuation of benefits for three years, and all of Mr. Hockema’s equity awards outstanding at that time will immediately vest. The initial term of the Hockema Employment Agreement is five years and it will be automatically renewed and extended for one-year periods unless either party provides notice one year prior to the end of the initial term or any extension period. Mr. Hockema will also participate in the various retirement and benefit plans for salaried employees.

The preceding description of the Hockema Employment Agreement is a summary and is qualified in its entirety by the Hockema Employment Agreement, which is filed as Exhibit 10.5 hereto and incorporated herein by reference.

Employment Agreement with Joseph P. Bellino

On the Effective Date, the Company and Joseph P. Bellino entered into an employment agreement (the “Bellino Employment Agreement”), pursuant to which Mr. Bellino will continue his duties as Executive Vice President and Chief Financial Officer of the Company and certain of the Company’s subsidiaries. The Bellino Employment Agreement replaced Mr. Bellino’s previously disclosed employment agreement with KACC on substantially identical terms. Under the terms of the Bellino Employment Agreement, Mr. Bellino will receive an initial base salary of $350,000 and have an annual short-term incentive target equal to 50% of his base salary. The short-term incentive is (i) payable in cash, (ii) subject to the Company meeting the applicable underlying performance thresholds, and (iii) subject to an annual cap of three times the target. For 2006, Mr. Bellino’s short-term incentive award will not be prorated. The Bellino Employment Agreement also provides that Mr. Bellino will receive an initial long-term incentive grant of 15,000 restricted shares of Common Stock on the Effective Date and, starting in 2007, annual equity awards (such as restricted stock, stock options and performance shares) with an economic value of $450,000. The terms of all equity grants will be similar to the terms of equity grants made to other senior executives at the time they are made. Mr. Bellino is also entitled to severance and change-in-control benefits under the terms of the Bellino Employment Agreement. In the event Mr. Bellino’s employment is terminated without cause or terminated by Mr. Bellino with good reason, Mr. Bellino will be entitled to receive a lump-sum payment of two times his base salary plus the continuation of benefits for two years, and all of Mr. Bellino’s equity awards outstanding at that time will immediately vest. In the event Mr. Bellino’s employment is terminated without cause or terminated by Mr. Bellino with good reason within two years following a change in control, Mr. Bellino will be entitled to receive a lump-sum payment of three times the sum of his base salary and

short-term incentive target, plus the continuation of benefits for three years, and all of Mr. Bellino’s equity awards outstanding at that time will immediately vest. The initial term of the Bellino Employment Agreement is through May 15, 2009 and will be automatically renewed and extended for one-year periods unless either party provides notice one year prior to the end of the initial term or any extension period. Mr. Bellino will also participate in the various retirement and benefit plans for salaried employees and be reimbursed for the cost of relocation and certain temporary living expenses.

The preceding description of the Bellino Employment Agreement is a summary and is qualified in its entirety by the Bellino Employment Agreement, which is filed as Exhibit 10.6 hereto and incorporated herein by reference.

Employment Agreement with Daniel D. Maddox

On the Effective Date, the Company and Daniel D. Maddox entered into an employment agreement (the “Maddox Employment Agreement”), pursuant to which Mr. Maddox will continue his duties as Vice President and Controller of the Company and certain of the Company’s subsidiaries. Under the terms of the Maddox Employment Agreement, Mr. Maddox will receive an initial base salary of $225,000 and have an annual short-term incentive target equal to $75,000, pro-rated for partial years. The short-term incentive is (i) payable in cash and (ii) subject to the Company meeting the applicable underlying performance thresholds. The Maddox Employment Agreement also provides that Mr. Maddox will receive an initial long-term incentive grant of 11,334 restricted shares of Common Stock on the Effective Date. See “—Restricted Stock Grants” below. The terms of the equity grant to Mr. Maddox are similar to the terms of equity grants made to other senior executives on the Effective Date, except that, in any event, the grants will provide for full vesting upon the termination of Mr. Maddox’s employment for any reason other than termination by the Company for cause. Mr. Maddox is also entitled to payments and benefits (including any payments or benefits due because of a change in control) under certain previously existing agreements and plans upon such termination of his employment. The term of the Maddox Employment Agreement continues until the earlier of (a) a mutually agreed upon termination date and (b) March 31, 2007. Mr. Maddox will also participate in the various retirement and benefit plans for salaried employees.

The preceding description of the Maddox Employment Agreement is a summary and is qualified in its entirety by the Maddox Employment Agreement, which is filed as Exhibit 10.7 hereto and incorporated herein by reference.

Indemnification Agreements

As contemplated by the Plan, on the Effective Date the Company entered into indemnification agreements with each of its directors and executive officers containing provisions that obligate the Company to, among other things:

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indemnify, defend and hold harmless the director or officer to the fullest extent permitted or required by Delaware law, except that, subject to certain exceptions, the director or officer will be indemnified with respect to a claim initiated by such director or officer against the Company or any other director or officer of the Company only if the Company has joined in or consented to the initiation of such claim;

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advance prior to the final disposition of any indemnifiable claim any and all expenses relating to, arising out of or resulting from any indemnifiable claim paid or incurred by the director or officer or which the director or officer determines is reasonably likely to be paid or incurred by him or her; and

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utilize commercially reasonable efforts to cause to be maintained in effect policies of directors’ and officers’ liability insurance providing coverage that is at least substantially comparable in scope and amount to that provided by the Company’s policies of directors’ and officers’ liability insurance at the time the parties enter into such indemnification agreement.

Such agreements are intended to provide rights to indemnification broader than the rights available under Section 145 of the General Corporation Law of the State of Delaware (the “DGCL”) and the Company’s Amended

and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and to provide all such protection in a manner enforceable by the Company’s directors and executive officers irrespective of, among other things, any amendment to the Certificate of Incorporation or the Amended and Restated Bylaws (the “Bylaws”). See Item 5.03 “Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year — Amendment and Restatement of the Certificate of Incorporation and Bylaws” below.

The preceding description of the indemnification agreements is a summary and is qualified in its entirety by the Form of Director Indemnification Agreement, which is filed as Exhibit 10.8 hereto and incorporated herein by reference, the Form of Officer Indemnification Agreement, which is filed as Exhibit 10.9 hereto and incorporated herein by reference, and the Form of Director and Officer Indemnification Agreement, which is filed as Exhibit 10.10 hereto and incorporated herein by reference.

2006 Equity and Performance Incentive Plan

As contemplated by the Plan, the 2006 Equity and Performance Incentive Plan (the “Equity Incentive Plan”) became effective on the Effective Date. The following description of the Equity Incentive Plan is a summary and is qualified in its entirety by the Equity Incentive Plan, which is filed as Exhibit 10.11 hereto and incorporated herein by reference.

Shares Available Under the Equity Incentive Plan

Subject to certain adjustments that may be required from time to time to prevent dilution or enlargement of the rights of participants under the Equity Incentive Plan, a maximum of 2,222,222 shares of Common Stock are available for issuance pursuant to the Equity Incentive Plan. Shares of Common Stock issued pursuant to the Equity Incentive Plan may be shares of original issuance or treasury shares or a combination of both.

Administration of the Equity Incentive Plan

The Equity Incentive Plan will be administered by a committee of non-employee directors of the Board; as of the Effective Date, the Compensation Committee administers the Equity Incentive Plan. The Compensation Committee may from time to time delegate all or any part of its authority under the Equity Incentive Plan to a subcommittee of the Compensation Committee, as constituted from time to time.

Persons Who May Participate in the Equity Incentive Plan

Officers of the Company and other key employees of the Company or one or more of its subsidiaries, as well as the Company’s non-employee directors, are eligible to participate in the Equity Incentive Plan. As of the Effective Date, approximately 40 officers and other key employees had been selected by the Compensation Committee to receive awards under the Equity Incentive Plan.

Form of Awards Available Under the Equity Incentive Plan

The forms of awards authorized under the Equity Incentive Plan are described below.

Option Rights

The Compensation Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting to participants of options to purchase shares of Common Stock.

The exercise price of each stock option granted may not be less than the market value per share on the date of the grant, and in the case of incentive stock options granted to an employee owning more than 10% of the total combined voting power of all classes of shares of the Company or one of its subsidiaries ( i.e. , a 10% shareholder), the option price per share may not be less than 110% of the market value per share on the date of the grant.

Generally, no option right will be exercisable more than 10 years from the date of the grant, and, in the case of incentive stock options granted to 10% shareholders, no such option right will be exercisable more than five years from the date of the grant.

Vesting of stock options will be based on the required period or periods of continuous service by the optionee, and may also be contingent upon the optionee’s achievement of certain management objectives. In addition, a grant of option rights may provide for earlier exercise in the event of termination of employment of the optionee, whether by retirement, death, disability or otherwise, or a change in control.

Each option grant will specify the manner of payment for shares of Common Stock purchased upon the exercise of an option.

The Compensation Committee may determine, at or after the date of the grant, that payment of the option price of any option right (other than an incentive stock option) may be made in whole or in part in the form of restricted stock or other shares of Common Stock that are forfeitable or subject to restrictions on transfer, or in the form of restricted stock units.

Appreciation Rights

The Compensation Committee may authorize the granting (a) to any optionee, of tandem appreciation rights in respect of option rights granted and (b) to any participant, of free-standing appreciation rights.

A tandem appreciation right will be a right of the optionee, exercisable by surrender of the related option right, to receive from the Company an amount determined by the Compensation Committee, which will be expressed as a percentage of the spread (not exceeding 100 percent) of the market value per share over the base price established for the appreciation right at the time of exercise. The base price of a tandem appreciation right will be the option price of the related option right. Tandem appreciation rights may be granted at any time prior to the exercise or termination of the related option rights, except that a tandem appreciation right awarded in relation to an incentive stock option must be granted concurrently with such incentive stock option. A tandem appreciation right may be exercised only (a) at a time when the related option right is exercisable and the spread is positive and (b) by surrender of the related option right for cancellation. Similarly, the exercise of an option right will result in the cancellation on a share-for-share basis of a tandem appreciation right in respect of such option right.

A free-standing appreciation right will be a right of the participant to receive from the Company an amount determined by the Compensation Committee, which will be expressed as a percentage of the spread (not exceeding 100 percent) of the market value per share over the base price established for the appreciation right at the time of exercise. The base price of a free-standing appreciation right may not be less than the market value per share on the date of grant. No free-standing appreciation right will be exercisable more than 10 years from the date of grant.

The amount payable to a participant receiving a grant of appreciation rights under the Equity Incentive Plan may be paid in cash, in shares of Common Stock or in any combination thereof and may either grant to the participant or retain in the Compensation Committee the right to elect among those alternatives. A grant may specify that the amount payable on exercise of the appreciation right may not exceed a specified amount.

Vesting of appreciation rights will be based on waiting periods before exercise and permissible exercise dates and may also be contingent upon the participant’s achievement of certain management objectives. In addition, a grant of appreciation right may specify that such appreciation right may be exercised in the event of, or earlier in the event of, termination of employment of the participant, whether by retirement, death, disability or otherwise, or a change in control.

Restricted Stock

The Compensation Committee may authorize the granting or sale of restricted stock to participants. Restricted stock is shares of Common Stock that are issued to a participant subject to such restrictions on transfer and vesting requirements as may be determined by the Compensation Committee in accordance with the Equity

Incentive Plan. Each grant or sale will constitute an immediate transfer of the ownership of shares of Common Stock to the participant in consideration of the performance of services, entitling such participant to voting, dividend and other ownership rights, but subject to the substantial risk of forfeiture and restrictions on transfer in accordance with the Equity Incentive Plan.

Except as provided below with respect to non-employee directors, each grant of restricted stock will provide that the restricted stock covered by the grant will be subject to a substantial risk of forfeiture for a period of not less than one year and may provide for earlier lapse of such substantial risk of forfeiture in the event of termination of employment of the participant, whether by retirement, death, disability or otherwise, or a change in control. Subject to the foregoing, any grant of restricted stock may specify management objectives that, if achieved, will result in the termination or early termination of the restriction(s) applicable to such restricted stock.

Restricted Stock Units

The Compensation Committee may authorize the granting or sale of restricted stock units to participants. Each grant or sale of restricted stock units will constitute an agreement by the Company to deliver shares of Common Stock or cash to the participant in the future in consideration of the performance of services, but subject to the fulfillment of such conditions (which may include the achievement of management objectives) during the restriction period as the Compensation Committee may specify.

Each grant or sale will be subject to a restriction period of not less than one year, as determined by the Compensation Committee at the date of the grant, and may provide for the earlier lapse or other modification of such restriction period in the event of termination of employment of the participant, whether by retirement, death, disability or otherwise, or a change in control. During the applicable restriction period, the participant will have no right to transfer any rights under his or her award, will have no rights of ownership in the Common Stock underlying restricted stock units and will have no right to vote such Common Stock.

Performance Shares and Performance Units

The Compensation Committee may authorize the granting of performance shares and performance units that will become payable to participants upon achievement of specified management objectives during the performance period.

The payment of performance shares or performance units which become payable to a participant may be made in cash, in shares of Common Stock or in any combination thereof and may either grant to the participant or retain in the Compensation Committee the right to elect among those alternatives. A grant of performance shares may specify that the amount payable with respect thereto may not exceed a specified amount.

The performance period with respect to each performance share or performance unit will be a period of time that is not less than one year from the date of grant, and may be subject to earlier lapse or other modification in the event of termination of employment of the participant, whether by retirement, death, disability or otherwise, or a change in control.

Awards to Non-Employee Directors

The Board may, from time to time and upon such terms and conditions as it may determine, authorize the granting to non-employee directors of option rights, appreciation rights or other awards and may also authorize the grant or sale of Common Stock, restricted stock or restricted stock units to non-employee directors.

Each grant of option rights to a non-employee director will specify an option price per share of not less than the market value per share on the date of the grant. No such award will be exercisable more than 10 years from the date of the grant. The payment to the Company upon exercise of the option rights may be made in cash or in shares of Common Stock then owned by the optionee for at least six months or in a combination of cash and such Common Stock.

Each grant of restricted stock to non-employee directors will be as described above except that the period for which the restricted stock will be subject to substantial risk of forfeiture may be less than one year.

Each grant of appreciation rights to non-employee directors will be as described above.

Each grant of restricted stock units to non-employee director will be as described above except that the restricted period for the restricted stock units may be less than one year.

Non-employee directors may be awarded, or may be permitted to elect to receive pursuant to procedures established by the Board, all or any portion of their annual retainer, meeting fees or other fees in shares of Common Stock in lieu of cash.

Other Awards

Subject to certain limitations under applicable law, the Compensation Committee may grant participants such other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Common Stock or factors that may influence the value of such shares. The Compensation Committee will determine the terms and conditions of such awards. The payment of awards may be made in such forms including, without limitation, cash, shares of Common Stock, other awards, notes or other property, as the Compensation Committee may determine. The Compensation Committee may also grant cash awards as an element of or supplement to any other award. Additionally, the Compensation Committee may grant Common Stock as a bonus, or may grant other awards in lieu of the Company’s other obligations under the Equity Incentive Plan.

Withholding Taxes

To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by a participant or other person under the Equity Incentive Plan, and the amounts available to the Company for such withholding are insufficient, it will be a condition to the receipt of the payment or the realization of the benefit that the participant or such other person make arrangements satisfactory to the Company for payment of the balance of the taxes required to be withheld. In the discretion of the Compensation Committee, such arrangements may include relinquishment of a portion of such benefit.

Detrimental Activity by Participants

If a participant, either during employment or within a specified period after termination of such employment, engages in specified conduct or activities determined by the Compensation Committee to be detrimental to any significant interest of the Company, and the Compensation Committee so finds, the participant must return to the Company, in exchange for payment by the Company of any cash amount actually paid therefor by the participant (unless such payment is prohibited by law), all shares of Common Stock that the participant has not disposed of that were offered pursuant to the Equity Incentive Plan within a specified period prior to the date of the commencement of such detrimental activity. With respect to any shares of Common Stock so acquired that the participant has disposed of, the participant must pay to the Company in cash the difference between any cash amount actually paid by the participant pursuant to the Equity Incentive Plan and the market value per share of the Common Stock on the date of such acquisition. To the extent that such amounts are not paid to the Company, the Company may, to the extent permitted by applicable law, set off the amounts so payable to it against any amounts that may be owing from time to time by the Company to the participant, whether as wages, deferred compensation or vacation pay or in the form of any other benefit or for any other reason.

Transferability

Generally, no option right, appreciation right or other derivative security or award will be transferable by the participant except by will or the laws of descent and distribution. An option right (excluding incentive stock options), appreciation right or other derivative security or award may be transferable upon the death of the participant to any one or more family members of the participant, as designated in writing by the participant by means of a form of beneficiary designation approved by the Company. An option right (excluding incentive stock

options), appreciation right or other derivative security or award may also be transferable by the participant to any one or more family members of the participant, except that such transfer will not be effective until notice of such transfer is delivered to the Company and any such transferee will be subject to the same terms and conditions as the participant. Except as otherwise determined by the Compensation Committee, option rights and appreciation rights will be exercisable during the participant’s lifetime only by him or her or, in the event of the participant’s legal incapacity to do so, by his or her guardian or legal representative acting on behalf of the participant in a fiduciary capacity under state law and/or court supervision.

Term

The Equity Incentive Plan will expire on July 6, 2016. No grants will be made under the Equity Incentive Plan after that date, but all grants made on or prior to such date will continue in effect thereafter subject to the terms thereof and of the Equity Incentive Plan.

Termination and Amendment of the Equity Incentive Plan

The Board may, in its discretion, terminate the Equity Incentive Plan at any time. The termination of the Equity Incentive Plan will not affect the rights of participants or their successors under any awards outstanding and not exercised in full on the date of termination.

The Compensation Committee may at any time and from time to time amend the Equity Incentive Plan in whole or in part. Any amendment which must be approved by the shareholders in order to comply with applicable law or the rules of the principal securities exchange, association or quotation system on which the common shares are then traded or quoted will not be effective unless and until such approval has been obtained. The Compensation Committee will not, without the further approval of the shareholders, authorize the amendment of any outstanding option right or appreciation right to reduce the option price or base price. Furthermore, no option right will be cancelled and replaced with awards having a lower option price without further approval of the shareholders.

Restricted Stock Grants

On the Effective Date, grants of restricted stock were made to the Company’s Named Executive Officers as follows:


Name	Number of Shares of Restricted Stock

Jack A. Hockema		185,000	(1)
Joseph P. Bellino		15,000	(1)
John Barneson		48,000	(1)
John M. Donnan		45,000	(1)
Daniel D. Maddox.		11,334	(1)

(1)

The restrictions on 100% of such shares will lapse on the third anniversary of the Effective Date or earlier in the event that the participant ceases to be an employee because of death, disability, termination by the Company for any other reason other than for cause or detrimental activity, or termination by the participant for good reason or in the event of a change in control of the Company.

The restricted stock grants were made pursuant to the Equity Incentive Plan. See “— 2006 Equity and Performance Incentive Plan” above. The form of Restricted Stock Award Agreement used to evidence the grants made to the Company’s executive officers is attached hereto as Exhibit 10.12 and incorporated herein by reference.

As contemplated by the director compensation arrangements described above, on August 1, 2006, each non-employee director will receive a grant of restricted stock having a value equal to $30,000, based on the average of the closing price per share of Common Stock on each of the 10 consecutive trading days immediately preceding such date. The restrictions on 100% of such restricted stock will lapse on August 1, 2007 or earlier in the event that

the participant ceases to be a non-employee director due to death or disability or in the event of a change in control of the Company. The form of Restricted Stock Award Agreement that will be used to evidence grants made to the Company’s non-employee directors is attached hereto as Exhibit 10.13 and incorporated herein by reference.

Restoration Plan

The Kaiser Aluminum Fabricated Products Restoration Plan (the “Restoration Plan”) became operative as of the Effective Date, but is effective retroactively as of May 1, 2005. The purpose of the Restoration Plan is to restore benefits that would have otherwise been payable to participant’s under the Company’s benefit plans but for the limitations on benefit accruals and payments imposed by the Internal Revenue Code of 1986, as amended (the “IRC”). It is the intention of the Company that the Restoration Plan meet all requirements necessary to qualify as a nonqualified, unfunded, unsecured plan of deferred compensation within the meanings of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended. The following description of the Restoration Plan is a summary and is qualified in its entirety by the Restoration Plan, which is filed as Exhibit 10.14 hereto and is incorporated herein by reference.

Participation in the Restoration Plan is limited to those employees selected by the Compensation Committee, which administers the Restoration Plan. Participation in the Restoration Plan is limited to members of a select group of management or employees who in the sole and exclusive judgment of the Compensation Committee, because of their position and responsibilities, contributes materially to the continued growth, development and future business success of the Company.

If, during any year, a participant’s matching employer contributions under the Kaiser Aluminum Savings and Investment Plan (the “Qualified Plan”) are limited by IRC Section 401(a)(17), 402(g), 401(k), 401(m) or 415 (the “Applicable IRC Provisions”), an amount equal to the difference between (i) the matching employer contributions that could have been made to the Qualified Plan but for the Applicable IRC Provisions and (ii) the maximum matching employer contributions that could have been made to a participant’s matching contribution account under the Qualified Plan taking into account all Applicable IRC Provisions will be credited or contributed to such participant’s account (the “Matching Contribution Amount”). In order to be eligible for these amounts, the participant must have made salary deferral contributions to the Qualified Plan as of the date the participant first becomes a participant in the Restoration Plan and as of the first day of each year thereafter. The Company will also contribute or credit to the participant’s account an amount equal to a percentage of the participant’s compensation, which percentage will be determined in accordance with a participant’s years of service and age (the “Fixed-Rate Contribution Amount”). The Matching Contribution Amount will be 100% vested at all times, and the Fixed-Rate Contribution Amounts will vest 100% after five years of service or upon a change in control, death, disability or reaching retirement age prior to a separation from service. All current participants have at least five years of service and, accordingly, are 100% vested. If the participant is terminated for cause, the participant will forfeit the Matching Contribution Amounts and the Fixed-Rate Contribution Amounts. Additionally, the lump-sum actuarial equivalent amount of the benefit accrued to a participant under the Kaiser Aluminum Supplemental Benefits Plan as of May 1, 2005 (the “Prior SERP Benefit Amount”) are to be transferred to the Restoration Plan as soon as administratively feasible after the Effective Date. The Prior SERP Benefit Amount, and all accretions thereon, will be fully vested at all times.

Extension of Consulting Agreement with Edward F. Houff

Effective as of June 30, 2006, KACC and Edward F. Houff, the Chief Restructuring Officer of the Company and KACC as of such date, entered into an amendment (the “Houff Amendment”) to the Amended and Restated Non-Exclusive Consulting Agreement, which was effective as of August 16, 2005 (the “Houff Consulting Agreement”). The Houff Amendment had the effect of extending the term of Mr. Houff’s engagement, which would otherwise have ended June 30, 2006, through July 6, 2006 and securing Mr. Houff’s services as Chief Restructuring Officer through the earlier of emergence from chapter 11 and July 6, 2006. Pursuant to the Houff Consulting Agreement, as modified by the Houff Amendment, Mr. Houff will be compensated at an hourly rate of $450 for services to the Company and KACC during the period from July 1, 2006 through July 6, 2006. In addition, KACC will reimburse Mr. Houff for reasonable and customary expenses incurred while providing such services. In accordance with the Houff Consulting Agreement, as modified by the Houff Amendment, on the Effective Date,

Mr. Houff ceased to serve as the Chief Restructuring Officer, whereupon such position was eliminated. A copy of the Houff Amendment is attached hereto as Exhibit 10.15 and is herein incorporated by reference.

Agreements Relating to the Company’s Securities

Stock Transfer Restriction Agreement

Pursuant to the Plan, on the Effective Date the Company, the trustee of the trust that provides benefits for certain eligible retirees of KACC represented by the United Steelworkers of America, AFL-CIO, CLC, the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America and its Local 1186, the International Association of Machinists and Aerospace Workers, the International Chemical Workers Union Council of the United Food & Commercial Workers, and the Paper, Allied-Industrial, Chemical and Energy Workers International Union, AFL-CIO, CLC and their surviving spouses and eligible dependents (the “Union VEBA Trust”) entered into a stock transfer restriction agreement (the “Stock Transfer Restriction Agreement”) with respect to shares of Common Stock received, or to be received, by the Union VEBA Trust pursuant to the Plan. The following description of the Stock Transfer Restriction Agreement is a summary and is qualified in its entirety by the Stock Transfer Restriction Agreement, which is filed as Exhibit 10.15 hereto and is incorporated herein by reference.

Pursuant to the Stock Transfer Restriction Agreement, until the share transfer restrictions provided for in the Certificate of Incorporation are released, except as described below the trustee of the Union VEBA Trust will be prohibited from transferring or otherwise disposing of more than 15% of the total number of shares of Common Stock issued pursuant to the Plan to the Union VEBA Trust in any 12-month period without the prior written approval of the Board in accordance with the Certificate of Incorporation. Pursuant to the Stock Transfer Restriction Agreement, the trustee of the Union VEBA Trust also expressly acknowledged and agreed to comply with the restrictions on the transfer of the securities of the Company contained in the Certificate of Incorporation. See Item 5.03 “Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year — Amendment and Restatement of the Certificate of Incorporation and Bylaws” below.

Simultaneously with the execution and delivery of the Stock Transfer Restriction Agreement, the Company and the trustee of the Union VEBA Trust entered into a registration rights agreement (the “Registration Rights Agreement”) with respect to shares of Common Stock received, or to be received, by the Union VEBA Trust pursuant to the Plan. (See “— Registration Rights Agreement” below for a description of the Registration Rights Agreement.) The Stock Transfer Restriction Agreement provides that notwithstanding the general restriction on transfer described above:

(a)

the transfer of shares of Common Stock by the Union VEBA Trust in an underwritten offering contemplated by Section 2.1 of the Registration Rights Agreement may include up to a number of shares of Common Stock equal to 30% of the total number of shares of Common Stock received by the Union VEBA Trust pursuant to the Plan, so long as (i) such number of shares of Common Stock is not more than (A) 45% of the total number of shares of Common Stock received by the Union VEBA Trust pursuant to the Plan less (B) the number of shares included in all other transfers previously effected by the Union VEBA Trust during the 36 months immediately preceding such transfer or the period commencing on the Effective Date and ending immediately prior to such transfer, whichever period is shorter, and (ii) the shares of Common Stock requested to be included in such underwritten offering by the Union VEBA Trust have a market value of not less than $60.0 million on the date such request is made;

(b)

in the event no underwritten offering contemplated by Section 2.1 of the Registration Rights Agreement has been effected, the transfer of shares of Common Stock by the Union VEBA Trust in an underwritten offering contemplated by Section 3.5 of the Registration Rights Agreement may include up to a number of shares of Common Stock equal to (x) 45% of the total of shares of Common Stock received by the Union VEBA Trust pursuant to the Plan less (y) the number of shares included in all other transfers previously effected by the Union VEBA Trust during the 36 months immediately preceding such transfer or the period commencing on the Effective Date and ending immediately prior to such transfer, whichever period is shorter, so long as (i) no

underwritten offering contemplated by Section 3.5 of such Registration Right Agreement has been previously effected, (ii) the demand for such underwritten offering is made by the Union VEBA Trust between March 31, 2007 and April 1, 2008, and (iii) the shares of Common Stock requested to be included in such underwritten offering by the Union VEBA Trust have a market value of not less than $60.0 million on the date such request is made; and

(c)

in the event that the transfer by the Union VEBA Trust of shares of Common Stock in such an offering includes a number of such shares greater than the number of such shares that the Union VEBA Trust could so include under the general restriction on transfer described above absent this exception, then for purposes of determining whether any future transfer of shares of Common Stock by such person is permissible under the general restriction, the Union VEBA Trust will be deemed to have effected the transfer of such excess shares at the earliest possible date or dates the Union VEBA Trust would have been permitted to effect such transfer under the general restriction absent this exception.

The Plan states that on the Effective Date, 11,439,900 shares of Common Stock will be contributed to the Union VEBA Trust on the Effective Date. By order dated April 29, 2006, the Bankruptcy Court permitted sales by the Union VEBA Trust and certain other parties prior to the Effective Date so long as such sales were authorized by a Protocol for Pre-Effective Date Sales attached to the order, which Protocol for Pre-Effective Date Sales was amended and restated by an order of the Bankruptcy Court on June 5, 2006 (the “Pre-Effective Date Sales Protocol”). Prior to the Effective Date, in accordance with the Pre-Effective Date Sales Protocol the Union VEBA Trust sold interests entitling the purchasers thereof to receive 2,630,000 shares of Common Stock that otherwise would have been issuable to the Union VEBA Trust on the Effective Date. Accordingly, on the Effective Date, 8,809,900 shares of Common Stock were issued to the Union VEBA Trust. Pursuant to the terms of the Pre-Effective Date Sale Protocol, unless the Company otherwise agrees or it is determined in a ruling by the Internal Revenue Service that any such sale does not constitute a sale of shares on or following the Effective Date of the Plan for purposes of the applicable limitations of section 382 of the Internal Revenue Code, the shares attributable to a sale of all or part of the interest of the Union VEBA Trust will be deemed to have been sold on or after the Effective Date out of the permitted sale allocation under the Stock Transfer Restriction Agreement as if sold at the earliest possible date or dates such sales would have been permitted thereunder for purposes of determining the permissibility of future sales of shares under the Stock Transfer Restriction Agreement. The Company has been informed that the Union VEBA Trust intends to seek such a ruling from the Internal Revenue Service.

Registration Rights Agreement

General

On the Effective Date, the Company, the trustee of the Union VEBA Trust and certain parties that, in accordance with the Pre-Effective Date Protocol, purchased from the Union VEBA Trust interests entitling them to receive shares that otherwise would have been issuable to the Union VEBA Trust on the Effective Date (the “Other Parties”) entered into the Registration Rights Agreement. The following description of the Registration Rights Agreement is a summary and is qualified in its entirety by the Registration Rights Agreement, which is filed as Exhibit 10.16 hereto and is incorporated herein by reference.

The Registration Rights Agreement provides the Union VEBA Trust and the Other Parties with certain rights to require that the Company register the resale of the shares of Common Stock issued to them pursuant to the Plan unless such securities (a) are disposed of pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), (b) are distributed to the public pursuant to Rule 144 under the Securities Act, (c) may be freely sold publicly without either registration under the Securities Act or compliance with any restrictions under Rule 144 under the Securities Act, (d) have been transferred to any person, or (e) have ceased to be outstanding (prior to the occurrence of any such event, such securities (together with any shares of Common Stock issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, such securities) constitute “Registrable Securities”).

Demand Registration

Pursuant to Section 2.1 of the Registration Rights Agreement, during the period commencing on the Effective Date and ending March 31, 2007, the Union VEBA Trust may (and, if so directed by its independent fiduciary, will) demand that the Company prepare and file with the SEC a registration statement (the “Underwritten Registration”) covering the resale of its Registrable Securities in an underwritten offering. Following receipt of such a request, the Company will prepare and file the Underwritten Registration and will use commercially reasonable efforts to cause the Underwritten Registration to be declared effective under the Securities Act as soon as practicable after the filing.

Each of the Other Parties will be provided the opportunity to include its Registrable Securities in the underwritten offering covered by the Underwritten Registration. If any of the Other Parties elects to participate in such underwritten offering and the managing underwriter or underwriters of such underwritten offering advise the Company, the Union VEBA Trust and the Other Parties that have elected to participate that, in its or their good faith judgment, the total amount of Registrable Securities requested to be included in the Underwritten Registration exceeds the amount of Registrable Securities that can be sold in the offering without being materially detrimental to the success of the offering, then the Registrable Securities included in the Underwritten Registration will be allocated among the Union VEBA Trust and the Other Parties that have elected to participate on a pro rata basis based on the relationship of the number of Registrable Securities requested to be included by each of them to the total number of Registrable Securities requested to be included by all of them. The Company will use commercially reasonable efforts to keep the Underwritten Registration continuously effective under the Securities Act during the period commencing on the effectiveness thereof and ending on the day that is 60 calendar days thereafter or such earlier date on which all Registrable Securities covered by the Underwritten Registration have been sold pursuant thereto. The Company will not be required to take any such action in response to a request for the Underwritten Registration if the Registrable Securities requested by the Union VEBA Trust to be registered in the Underwritten Registration have a market value of less than $60.0 million on the date the request is made. The Company will be required to effect only one registration pursuant to Section 2.1 of the Registration Rights Agreement. Except as described below, a registration requested as described above will not be deemed to be effected if it has not been declared effective and kept effective as described above. At any time prior to the effective date of such a registration, the Union VEBA Trust may (and, if so directed by its independent fiduciary, will) revoke its request for registration; in such event, either the Union VEBA Trust will reimburse the Company for all its out-of-pocket expenses incurred in the preparation, filing or processing of such registration or the requested registration that has been revoked will be deemed to have been effected. The managing underwriter or underwriters of any underwritten offering contemplated by an Underwritten Registration will be selected by the Union VEBA Trust subject to the approval of the Company, which approval will not be unreasonably withheld. The Company will have customary rights to impose blackout periods with respect to any demand for registration described above.

Shelf Registration

Commencing April 1, 2007, the Union VEBA Trust may (and, if so directed by its independent fiduciary, will) demand that the Company prepare and file with the SEC a “shelf” registration statement (the “Initial Shelf Registration”) covering the resale of all Registrable Securities held by the Union VEBA Trust on a continuous basis under and in accordance with Rule 415 under the Securities Act. Following receipt of such a request, the Company will prepare and file the Initial Shelf Registration covering all Registrable Securities held by the Union VEBA Trust and will use commercially reasonable efforts to cause the Initial Shelf Registration to be declared effective under the Securities Act as soon as practicable after such filing. However, the Company will not be required to take such action: (a) if the Company has effected a “demand” registration as described above within the 180-day period preceding a “shelf” registration request; (b) if, at the time of a “shelf” registration request, a “demand” registration request was made as described above and has not been revoked and such registration has not yet been effected; or (c) if, at the time of a “shelf” registration request, the Stock Transfer Restriction Agreement (see below “Stock Transfer Restriction Agreement”) would prohibit the Union VEBA Trust from immediately selling a number of shares of Common Stock greater than the number of shares of Common Stock it would then be permitted to sell in compliance with the restrictions of Rule 144 under the Securities Act.

The Company will use commercially reasonable efforts to keep the Initial Shelf Registration continuously effective under the Securities Act during the period (the “Shelf Effectiveness Period”) commencing on the

effectiveness thereof and ending on the first date on which there ceases to be any Registrable Securities held by the Union VEBA Trust. If the Initial Shelf Registration or any substitute shelf registration statement (as described below) ceases to be effective for any reason at any time during the Shelf Effectiveness Period, the Company will use commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof. In the event that any such order is not withdrawn within 45 days following the date thereof, the Company will (a) file an amendment to such registration and use commercially reasonable efforts to cause such registration, as so amended, to again become effective under the Securities Act as soon as practicable after such filing or (b) file a separate “shelf” registration statement covering the resale of all Registrable Securities for an offering on a continuous basis under and in accordance with Rule 415 under the Securities Act (each, a “Substitute Shelf Registration”) and use commercially reasonable efforts to cause such Substitute Shelf Registration to be declared effective under the Securities Act as soon as practicable after such filing and to keep such Substitute Shelf Registration continuously effective under the Securities Act for the remainder of the Shelf Effectiveness Period.

The Initial Shelf Registration and any Substitute Shelf Registration will be effected on Form S-3 (except that, if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, such registration will be on another appropriate form). The Initial Shelf Registration and any Substitute Shelf Registration will cover the disposition of all Registrable Securities in one or more underwritten offerings (subject to the provisions regarding underwritten offerings as described below), block transactions, broker transactions, at-market transactions and in such other manner or manners as may be reasonably specified by the Union VEBA Trust. The Company will have customary rights to impose blackout periods with respect to any demand for the Initial Shelf Registration, the filing of any amendment or Substitute Shelf Registration or the continued use of the Initial Shelf Registration or any Substitute Shelf Registration.

Pursuant to Section 3.5 of the Registration Rights Agreement, if the Union VEBA Trust so requests, the Company will effect pursuant to the Initial Shelf Registration or such Substitute Shelf Registration, as applicable, an underwritten offering if (a) the Company has not so effected an underwritten offering within the 180-day period next preceding such request and (b) the Registrable Securities requested to be included in the underwritten offering have a then-current market value of at least $10.0 million. The managing underwriter or underwriters of any underwritten offering will be selected by the Union VEBA Trust, subject to the approval of the Company, which approval will not be unreasonably withheld.

Piggyback Registration

If the Company registers equity securities for its own account or the account of any other person (other than a registration statement in connection with a merger or reorganization or relating to an employee benefit plan or in connection with an offering made solely to the then-existing stockholders or employees of the Company), the Union VEBA Trust will be offered the opportunity to include its Registrable Securities in such registration. Customary priority provisions will apply in the context of an underwritten offering.

Expenses

Subject to provisions for reimbursement of the Company upon revocation of a request for registration or an underwritten offering, the Company will bear all out-of-pocket registration expenses in connection with the demand registration and the shelf registration, including in each case up to $50,000 for one counsel to represent selling holder or holders of Registrable Securities. All underwriting fees, discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities will be borne by the applicable selling holder.

Rule 144

The Company will file all required SEC reports, and cooperate with the Union VEBA Trust, to the extent required to permit the Union VEBA Trust to sell its Registrable Securities without registration under Rule 144.

Director Designation Agreement with the USW

In accordance with the Plan, on the Effective Date, the Company and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC (formerly known as the United Steelworkers of America, AFL-CIO, CLC) (the “USW”) entered into an agreement (the “Director Designation Agreement”) in order to effectuate certain previously agreed upon rights of the USW to nominate individuals to serve on the Board and specified committees thereof. The Director Designation Agreement provides that the USW has the rights described below until December 31, 2012. The following description of the Director Designation Agreement is a summary and is qualified in its entirety by the Director Designation Agreement, which is filed as Exhibit 10.17 hereto and is incorporated herein by reference.

The Director Designation Agreement provides that the USW has the right, in connection with each annual meeting of the Company’s stockholders, to nominate as candidates to be submitted to stockholders of the Company for election at such annual meeting the minimum number of candidates necessary to ensure that, assuming (a) such candidates are included in the slate of director candidates recommended by the Board in the proxy statement relating to such annual meeting and (b) the stockholders of the Company elect each candidate so included, at least 40% of the members of the Board immediately following such election are directors who were either designated by the USW pursuant to the Plan or have been nominated by the USW in accordance with the Director Designation Agreement. The Director Designation Agreement contains requirements as to the timeliness, form and substance of the notice the USW must give to the Nominating and Corporate Governance Committee in order to nominate such candidates. The Nominating and Corporate Governance Committee will determine in good faith whether each candidate properly submitted by the USW satisfies the qualifications set forth in the Director Designation Agreement, and, if the Nominating and Corporate Governance Committee so determines that such candidate satisfies such qualifications, will, unless otherwise required by its fiduciary duties, recommend such candidate to the Board for inclusion in the slate of directors recommended by the Board in the proxy statement relating to such annual meeting, and the Board will, unless otherwise required by its fiduciary duties, accept such recommendation and direct that such director candidate be included in such slate of directors.

The Director Designation Agreement also provides that the USW has the right to nominate an individual to fill a vacancy on the Board resulting from the death, resignation, disqualification or removal of a director who was either designated by the USW to serve on the Board pursuant to the Plan or has been nominated by the USW in accordance with the Director Designation Agreement. The Director Designation Agreement further provides that, in the event of newly created directorships resulting from an increase in the number of directors of the Company, the USW has the right to nominate the minimum number of individuals to fill such newly created directorships necessary to ensure that at least 40% of the members of the Board immediately following the filling of such newly created directorships are directors who were either designated by the USW pursuant to the Plan or have been nominated by the USW in accordance with the Director Designation Agreement. In each such case, the USW will be required to deliver proper notice to the Nominating and Corporate Governance Committee in accordance with the Director Designation Agreement, and the Nominating and Corporate Governance Committee will determine in good faith whether each candidate properly submitted by the USW satisfies the qualifications set forth in the Director Designation Agreement, and, if the Nominating and Corporate Governance Committee so determines that such candidate satisfies such qualifications, will, unless otherwise required by its fiduciary duties, recommend to the Board that it fill the vacancy or newly created directorship, as the case may be, with such candidate, and the Board will, unless otherwise required by its fiduciary duties, accept such recommendation and fill the vacancy or newly created directorship, as the case may be, with such candidate.

Each candidate nominated by the USW must satisfy (a) the applicable independence criteria of the national securities exchange or association on which the Company’s securities are then principally traded or quoted, (b) the qualifications to serve as a director of the Company as set forth in any applicable corporate governance guidelines adopted by the Board and policies adopted by the Nominating and Corporate Governance Committee establishing criteria to be utilized by it in assessing whether a director candidate has appropriate skills and experience, and (c) any other qualifications to serve as director imposed by applicable law. A candidate nominated by the USW may not be an officer, employee, director or member of the USW or any of its locals or affiliated organizations as of the date of his or her designation as a candidate or election as a director.

Finally, the Director Designation Agreement provides that, so long as the Board maintains an audit committee, executive committee or nominating and corporate governance committee, each such committee will, unless otherwise required by the fiduciary duties of the Board, include at least one director who was either designated by the USW to serve on the Board pursuant to the Plan or has been nominated by the USW in accordance with the Director Designation Agreement (provided at least one such director is qualified to serve on such committee as determined in good faith by the Board).

Item 1.02 Termination of a Material Definitive Agreement

Termination of DIP Financing Facility

Pursuant to the Plan, on the Effective Date the Company entered into the Revolving Credit Facility and the Term Loan Facility (see Item 1.01 “Entry into a Material Definitive Agreement — Exit Financing Facilities” above), whereupon the Company’s Secured Super-Priority Debtor-In-Possession Revolving Credit and Guaranty Agreement was terminated.

Termination of Certain Other Material Agreements

Pursuant to the Plan, on the Effective Date all of the obligations of the Company and its affiliates with respect to the following material agreements were terminated:

•		9-7/8% senior notes of KACC and the related indenture;

•		10-7/8% senior notes of KACC and the related indenture;

•		12-3/4% senior subordinated notes of KACC and the related indenture;

•		6-1/2% Jackson County, West Virginia, Refunding Pollution Control Revenue Bonds, Series 1978 (Kaiser Aluminum & Chemical Project) and the related indenture;

•		7-3/4% Parish of St. James, State of Louisiana, Solid Waste Disposal Revenue Bonds (Kaiser Aluminum Project) Series 1992 and the related indenture; and

•		The Industrial Development Corporation of Spokane County, Washington, 7.60% Solid Waste Disposal Revenue Bonds (Kaiser Aluminum & Chemical Corporation Project) Series 1997 and the related indenture.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

Exit Financing Facilities

The information set forth above under Item 1.01 “Entry into a Material Definitive Agreement — Exit Financing Facilities” is incorporated herein by reference.

VEBA Profit Sharing

As previously disclosed, pursuant to agreements reached with salaried and hourly retirees in early 2004, in consideration for the agreed cancellation of the retiree medical plan, from and after the Effective Date the Company will be obligated to make certain variable annual contributions to the Union VEBA Trust and another trust that provides benefits for certain eligible retirees of KACC and their surviving spouses and eligible dependents depending on its operating results and liquidity. For information regarding the Company’s obligations with respect to such variable annual contributions, see Item 1.03 of the Plan Confirmation Form 8-K and Note 9 of Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2005.

Item 3.03 Material Modification to Rights of Security Holders

Pursuant to the Plan, on the Effective Date, (a) all shares of the Company’s common stock issued and outstanding immediately prior to the Effective Date were cancelled without consideration; (b) the Company’s certificate of incorporation in effect immediately prior to the Effective Date was amended and restated in its entirety (see Item 5.03 “Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year — Amendment and Restatement of the Certificate of Incorporation and Bylaws” below); and (c) 20.0 million new shares of Common Stock were issued for distribution in accordance with the terms of the Plan. See Item 8.01 “Other Events” below.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

Members of the Board of Directors

As previously disclosed, as of the Effective Date all of the then existing members of the Board (other than Jack A. Hockema, the President and Chief Executive Officer of the Company) resigned and, pursuant to the Plan, George Becker, Carl B. Frankel, Teresa A. Hopp, William F. Murdy, Alfred E. Osborne, Jr., Georganne C. Proctor, Jack Quinn, Thomas M. Van Leeuwen and Brett E. Wilcox became directors of the Company. Mr. Hockema serves as Chairman of the Board. For additional information regarding the new directors, see Item 5.02 of the Plan Confirmation Form 8-K.

Position of Chief Restructuring Officer Eliminated

On the Effective Date, Edward F. Houff ceased to serve as the Chief Restructuring Officer of the Company, whereupon such position was eliminated. See Item 1.01 “Entry into a Material Definitive Agreement — Plans, Contracts or Arrangements in Which Directors or Executive Officers Participate Agreement — Extension of Agreement with Edward F. Houff” above.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

Amendment and Restatement of the Certificate of Incorporation and Bylaws

Pursuant to the Plan, on the Effective Date, the Company’s certificate of incorporation and bylaws were amended and restated in their entirety. The following description of the Certificate of Incorporation and Bylaws is a summary and is qualified in its entirety by the Certificate of Incorporation and Bylaws, which are filed as Exhibit 3.1 and Exhibit 3.2, respectively, hereto and are incorporated herein by reference.

Authorized Capital Stock

Pursuant to the Certificate of Incorporation, the Company is authorized to issue 50.0 million shares of capital stock, consisting of 45.0 million shares of Common Stock and 5.0 million shares of preferred stock, par value $0.01 per share (“Preferred Stock”). As required by the Bankruptcy Code, the Certificate of Incorporation provides that the Company will not issue nonvoting equity securities; however, under the Certificate of Incorporation such restriction will (a) have no further force and effect beyond that required under Section 1123 of the Bankruptcy Code, (b) only have such force and effect for so long as Section 1123 of the Bankruptcy Code is in effect and applicable to the Company, and (c) in all events may be amended or eliminated in accordance with applicable law as from time to time may be in effect.

Holders of Common Stock are entitled to one vote for each share of Common Stock held of record on each matter submitted to a vote of stockholders and do not have cumulative voting rights. Holders of Common Stock are entitled to receive ratably dividends as may be declared by the Board out of funds legally available for payment of dividends. In the event of a liquidation, dissolution or winding up of the Company, holders of the Common Stock will be entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preference of any Preferred Stock. Holders of Common Stock do not have preemptive, subscription, redemption or conversion rights.

Preferred Stock may be issued in one or more series. The Board is authorized to issue the shares of Preferred Stock in such series and to fix from time to time before issuance the number of shares to be included in any such series and the designation, relative powers, preferences, rights and qualifications, limitations or restrictions of such series. The authority of the Board with respect to each such series includes, without limiting the generality of the foregoing, the determination of any or all of the following:

•		the number of shares of such series and the designation to distinguish the shares of such series from the shares of all other series;

•		subject to the provisions of the Certificate of Incorporation regarding the issuance of non-voting equity securities described above, the voting powers, if any, of the holders of such series and whether such voting powers are full or limited in such series;

•		the redemption provisions, if any, applicable to such series, including without limitation the redemption price or prices to be paid;

•		whether dividends on such series, if any, will be cumulative or noncumulative, the dividend rate of such series and the dates and preferences of dividends on such series;

•		the rights of the holders of such series upon the voluntary or involuntary dissolution of, or upon any distribution of the assets of, the Company;

•		the provisions, if any, pursuant to which the shares of such series are convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock, or any other security, of the Company or any other corporation or other entity, and the rates or other determinants of conversion or exchange applicable;

•		the right, if any, of holders of such series to subscribe for or to purchase any securities of the Company or any other corporation or other entity;

•		the provisions, if any, of a sinking fund applicable to such series; and

•		any other relative, participating, optional or other special powers, preferences or rights of such series and qualifications, limitations or restrictions.

Restrictions on Transfer

In order to reduce the risk that any change in the ownership of the Company would jeopardize the preservation of federal income tax attributes of the Company, including net operating loss carryovers, for purposes of Sections 382 and 383 of the IRC, the Certificate of Incorporation prohibits certain transfers of equity securities of the Company, including Common Stock, until the earliest of (a) the 10th anniversary of the Effective Date, (b) the repeal, amendment or modification of Section 382 of the IRC in such a way as to render the Company and all of its direct or indirect subsidiaries no longer subject to the restrictions imposed by such section, (c) the beginning of a taxable year of the Company in which no income tax benefits of the Company or any direct or indirect subsidiary thereof in existence as of the Effective Date are currently available or will be available, (d) the determination by the Board that the restrictions will no longer apply, (e) a determination by the Board or the Internal Revenue Service of the Department of Treasury of the United States of America that the Company is ineligible to use Section 382(l)(5) of the IRC permitting full use of the income tax benefits of the Company or any direct or indirect subsidiary thereof existing as of the Effective Date, and (f) an election by the Company for Section 382(l)(5) of the IRC not to apply (the earliest being the “Restriction Release Date”). Generally, the Certificate of Incorporation prohibits a transfer of equity securities, including Common Stock, if either (a) the transferor holds 5% or more of the total fair market value of all issued and outstanding equity securities (such person, a “5% Shareholder”) or (b) as a result of such transfer, either (i) any person or group of persons would become a 5% Shareholder or (ii) the percentage stock ownership in the Company of any 5% Shareholder would be increased (any such transfer, a “5% Transaction”).

The restrictions on transfer will not apply if:

	(a)		the transferor or transferee obtains the prior approval of the Board;

	(b)		in the case of a 5% Transaction by any holder of equity securities (other than the Union VEBA Trust), prior to such transaction, the Board determines in good faith, upon request of the transferor or transferee, that such transfer is a 5% Transaction (x) which, together with any 5% Transactions consummated during the period ending on the date of consummation of such 5% Transaction and beginning on the later of (i) the date three years prior thereto and (ii) the first day after the Effective Date (the “Testing Period”), represent aggregate 5% Transactions involving transfers of less than 45% of the equity securities of the Company issued and outstanding at the time of transfer and (y) which, together with any 5% Transactions consummated during the Testing Period and all 5% Transactions that the Union VEBA Trust may consummate without breach of the Stock Transfer Restriction Agreement during the three years following the time of transfer, represent, during any period of three consecutive years during the period consisting of the Testing Period and the three years thereafter, aggregate 5% Transactions involving transfers of less than 45% of the equity securities issued and outstanding at the time of transfer; or

	(c)		in the case of a 5% Transaction by the Union VEBA Trust, such 5% Transaction does not result in a breach of the Stock Transfer Restriction Agreement, so long as, contemporaneously with such 5% Transaction, the Union VEBA Trust delivers to the Board a written notice addressed to the Company setting forth the number and type of equity securities involved in, and the date of, such 5% Transaction. See Item 1.01 “Entry into a Material Definitive Agreement — Agreements Relating to the Company’s Securities — Stock Transfer Restriction Agreement” above.

Any such approval or determination by the Board requires the affirmative vote of a majority of the directors (assuming no vacancies). As a condition to granting any such approval or in connection with making any such determination, the Board may, in its discretion, require (at the expense of the transferor and/or transferee) an opinion of counsel selected by the transferor or the transferee, which counsel must be reasonably acceptable to the Board, that the consummation of the proposed transfer will not result in the application of any limitation under Section 382 of the IRC on the use of the tax benefits described above taking into account any and all other transfers that have been consummated prior to receipt of the request relating to the proposed transfer, any and all other proposed transfers that have been approved by the Board prior to receipt of the request relating to the proposed transfer and any and all other proposed transfers for which the requests relating thereto have been received prior to receipt of the request relating to the proposed transfer.

Each certificate representing equity securities issued prior to the Restriction Release Date, including Common Stock, will contain a legend referring to these restrictions on transfer and any purported transfer of equity securities of the Company, including Common Stock, in violation of such restrictions will be null and void. The purported transferor will remain the owner of such transferred securities and the purported transferee will be required to turn over the transferred securities, together with any distributions received by the purported transferee with respect to the transferred securities after the purported transfer, to an agent authorized to sell such securities, if it can do so, in arm’s-length transactions that do not violate such restrictions. If the purported transferee resold such securities prior to receipt of the Company’s demand that they be so surrendered, the purported transferee will generally be required to transfer the proceeds from such distribution, together with any distributions received by the purported transferee with respect to the transferred securities after the purported transfer, to such agent. Any amounts so held by the agent will be applied first to reimburse the agent for its expenses, then to reimburse the transferee for any payments made by the purported transferee to the transferor, and finally, if any amount remains, to pay the purported transferor. Any resale by the purported transferee will itself be subject to these restrictions on transfer.

Certain Provisions Having Anti-Takeover Effects

Introduction

Certain provisions of the Certificate of Incorporation and the Bylaws, together with certain of the Company’s contractual arrangements and applicable Delaware state law, may discourage or make more difficult the acquisition of control of the Company by means of a tender offer, open market purchase, proxy fight or otherwise. These provisions are intended to discourage, or may have the effect of discouraging, certain types of coercive takeover practices and inadequate takeover bids and are also intended to encourage a person seeking to acquire control of the Company to first negotiate with the Company. Management believes that these measures, many of which are substantially similar to the anti-takeover related measures in effect for numerous other publicly-held companies, enhance the Company’s potential ability to negotiate with the proponent of an unsolicited proposal to acquire or restructure the Company, providing benefits that outweigh the disadvantages of discouraging such proposals because, among other things, such negotiation could improve the terms of such a proposal and protect the stockholders from takeover bids that the directors of the Company have determined to be inadequate. A description of these provisions is set forth below.

Classified Board of Directors

The Certificate of Incorporation divides the Board into three classes of directors serving staggered three-year terms. The existence of a classified board will make it more difficult for a third party to gain control of the Board by preventing such third party from replacing a majority of the directors at any given meeting of stockholders.

Removal of Directors and Filling Vacancies in Directorships

The Certificate of Incorporation and Bylaws provide that directors may be removed by the stockholders, with or without cause, only at a meeting of stockholders and by the affirmative vote of the holders of at least 67% of the stock of the Company generally entitled to vote in the election of directors. The Certificate of Incorporation and Bylaws provide that any vacancy on the Board or newly created directorship may be filled solely by the affirmative vote of a majority of the directors then in office or by a sole remaining director, and that any director so elected will hold office for the remainder of the full term of the class of directors in which the vacancy occurred or the new directorship was created and until such director’s successor has been elected and qualified. The limitations on the removal of directors and the filling of vacancies may deter a third party from seeking to remove incumbent directors and simultaneously gaining control of the Board by filling the vacancies created by such removal with its own nominees.

Stockholder Action and Meetings of Stockholders

The Certificate of Incorporation and Bylaws provide that special meetings of the stockholders may only be called by the Chairman of the Board, the Chief Executive Officer or the President, or by the Secretary of the Company within 10 calendar days after the receipt of the written request of a majority of the total number of directors (assuming no vacancies), and further provide that, at any special meeting of stockholders, the only business that may be considered or conducted is business that is specified in the notice of such meeting or is otherwise properly brought before the meeting by the presiding officer or by or at the direction of a majority of the directors (assuming no vacancies), effectively precluding the right of the stockholders to raise any business at any special meeting. The Certificate of Incorporation also provides that the stockholders may not act by written consent in lieu of a meeting.

Advance Notice Requirements for Stockholder Proposals

The Bylaws provide that a stockholder seeking to bring business before an annual meeting of stockholders provide timely notice in writing to the Secretary of the Company. To be timely, a stockholder’s notice must be received by the Company not less than 60, nor more than 90, calendar days prior to the first anniversary date of the date on which the Company first mailed proxy materials for the prior year’s annual meeting of stockholders, except

that, if there was no annual meeting in the prior year or if the annual meeting is called for a date that is not within 30 calendar days before or after that anniversary, notice must be so delivered not later than the close of business on the later of the 90th calendar day prior to such annual meeting and the 10th calendar day following the date on which public disclosure of the date of the annual meeting is first made. The Bylaws also specify requirements as to the form and substance of notice. These provisions may preclude stockholders from bringing matters before an annual meeting of stockholders.

Director Nomination Procedures

The Bylaws provide that the nominations for election of directors by the stockholders will be made either by or at the direction of the Board or a committee thereof, or by any stockholder entitled to vote for the election of directors at the annual meeting at which such nomination is made. The Bylaws require that stockholders intending to nominate candidates for election as directors provide timely notice in writing. To be timely, a stockholder’s notice must be delivered to or mailed and received at the Company’s principal executive offices not less than 60, nor more than 90, calendar days prior to the first anniversary of the date on which the Company first mailed its proxy materials for the prior year’s annual meeting of stockholders, except that, if there was no annual meeting during the prior year or if the annual meeting is called for a date that is not within 30 calendar days before or after that anniversary, notice by stockholders to be timely must be delivered not later than the close of business on the later of the 90th calendar day prior to the annual meeting and the 10th calendar day following the day on which public disclosure of the date of such meeting is first made. The Bylaws also specify requirements as to the form and substance of notice. These provisions of the Bylaws may preclude stockholders from making nominations of directors.

Authorized But Unissued Shares

As indicated above, the Certificate of Incorporation provides that the Company is authorized to issue 50.0 million shares of capital stock, consisting of 45.0 million shares of Common Stock and 5.0 million shares of Preferred Stock, and that the Board will have the authority, within the limitations and restrictions stated in the Certificate of Incorporation, to issue the shares of Preferred Stock in one or more series, and to fix the number of shares to be included in any such series and the designation, relative powers, preferences, rights and qualifications, limitations or restrictions of such series, including but not limited to any voting powers, redemption provisions, dividend rights, liquidation preferences, conversion rights and preemptive rights.

Authorized but unissued shares of Common Stock and Preferred Stock under the Certificate of Incorporation will be available for future issuance without stockholder approval, unless otherwise required pursuant to the rules of any national securities exchange or association on which the Company’s securities are traded from time to time. These additional shares will give the Board the flexibility to issue shares for a variety of proper corporate purposes, including in connection with future public offerings to raise additional capital or corporate acquisitions, without incurring the time and expense of soliciting a stockholder vote. The existence of authorized but unissued shares of Common Stock and Preferred Stock could render more difficult or discourage an attempt to obtain control of the Company by means of a proxy contest, tender offer or merger or otherwise. In addition, any future issuance of shares of Common Stock or Preferred Stock, whether or not in connection with an anti-takeover measure, could have the effect of diluting the earnings per share, book value per share and voting power of shares held by the stockholders of the Company.

Limitation of Liability and Indemnification

The Certificate of Incorporation limits the liability of the Company’s directors to the fullest extent permitted by the DGCL. The DGCL provides that a corporation may limit the personal liability of its directors for monetary damages for breach of that individual’s fiduciary duties as a director except for liability for any of the following: (a) a breach of the director’s duty of loyalty to the corporation or its stockholders; (b) any act or omission not in good faith or that involves intentional misconduct or a knowing violation of the law; (c) certain unlawful payments of dividends or unlawful stock repurchases or redemptions; or (d) any transaction from which the director derived an improper personal benefit. This limitation of liability does not apply to liabilities arising under federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission.

Section 145 of the DGCL generally provides that a corporation may indemnify directors and officers, as well as other employees and individuals, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened, pending or completed action, suit or proceeding in which such person was or is a party or is threatened to be made a party by reason of such person being or having been a director, officer, employee or agent of the corporation. The DGCL provides that Section 145 is not exclusive of other rights to which those seeking indemnification may otherwise be entitled under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. See Item 1.01 “Entry into a Material Definitive Contract — Plans, Contracts or Arrangements in Which Directors or Executive Officers Participate — Indemnification Agreements.”

The Certificate of Incorporation provides that the Company is required to indemnify its directors and officers to the fullest extent permitted or required by the DGCL, although, except with respect to certain actions, suits or proceedings to enforce rights to indemnification, a director or officer will only be indemnified with respect to any action, suit or proceeding such person initiated to the extent such action, suit or proceeding was authorized by the Board. The Certificate of Incorporation also requires the Company to advance expenses incurred by a director or officer in connection with the defense of any action, suit or proceeding arising out of that person’s status or service as director or officer of the Company or as director, officer, employee or agent of another enterprise, if serving at the Company’s request. In addition, the Certificate of Incorporation permits the Company to secure insurance to protect itself and any director, officer, employee or agent of the Company or any other corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss.

Item 5.05 Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics

On the Effective Date, the Board adopted the Kaiser Aluminum Corporation Code of Business Conduct and Ethics (the “Ethics Code”). The Ethics Code constitutes a “code of ethics” as such term is defined in Item 406(b) of Regulation S-K and is intended to satisfy the corporate governance rules of the Nasdaq Stock Market, Inc. regarding a company’s code of conduct. A copy of the Ethics Code is attached hereto as Exhibit 14.1 and is incorporated herein by reference.

Item 8.01 Other Events

Exchange Act Registration/Termination of Registration

As indicated above (see Item 3.03 “Material Modifications to Rights of Security Holders”), pursuant to the Plan, on the Effective Date: (a) all shares of the Company’s common stock issued and outstanding immediately prior to the Effective Date (“Old Common Stock”) were cancelled without consideration; (b) the Company’s certificate of incorporation in effect immediately prior to the Effective Date was amended and restated in its entirety (see Item 5.03 “Amendments to Articles of Incorporation or Bylaws, Change in Fiscal Year — Amendment and Restatement of the Certificate of Incorporation and Bylaws” above); and (c) 20.0 million new shares of Common Stock were issued for distribution in accordance with the terms of the Plan. As a result of the amendment and restatement of the Company’s certificate of incorporation, the rights of holders of Common Stock will be substantially different than the rights of holders of Old Common Stock and, consequently, the Common Stock may be deemed to be a different class of securities than the Old Common Stock. Accordingly, on the Effective Date the Company filed a Form 8-A with the SEC registering the Common Stock pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and thereafter filed a Form 15 with the SEC to terminate the registration of the Old Common Stock under Section 12(g) of the Exchange Act and suspend its duty to file reports under Section 13 and Section 15(d) of the Exchange Act in connection with the Old Common Stock.

Listing on NASDAQ

As of the Effective Date, the Common Stock has been designated as a NASDAQ Global Market Security by The Nasdaq Stock Market, Inc. The trading symbol for the Common Stock is “KALU.”

Restructuring Transactions

In connection with the Effective Date, in accordance with the Plan, the following transactions (the “Restructuring Transactions”) were consummated:

	•		Prior to the Effective Date, the following new entities were formed: (a) Kaiser Aluminum Investments Company, a new Delaware corporation (“KAIC”), owned by the Company to function as an intermediate holding company; (b) Kaiser Aluminum Fabricated Products, LLC, a new Delaware limited liability company (i.e., KAFP), initially owned by KACC, to hold the domestic assets associated with the Company’s flat rolled products and engineered products units; and (c) Kaiser Aluminum & Chemical Corporation, LLC, a new Delaware limited liability company (“KACC, LLC”), owned by KAIC, to succeed to the remaining assets and liabilities of KACC;

	•		On the Effective Date, Texada Mines Ltd., Kaiser Aluminum & Chemical Canada Investment Limited, Kaiser Aluminum & Chemical of Canada Limited and Refractories Engineering & Supplies Limited were amalgamated to form Kaiser Aluminum Canada Limited, a new Ontario corporation (“KACL”), 100% of the issued and outstanding shares of capital stock of which was initially held by KACC;

	•		On the Effective Date, (a) KACC transferred the assets associated with the flat rolled products and engineered products units and all ownership interest in Kaiser Bellwood Corporation to KAFP, and (b) Kaiser Bellwood Corporation was merged with and into KAFP;

	•		On the Effective Date following the transactions described above, KACC transferred all its ownership interests in Anglesey Aluminium Limited, Trochus Insurance Co., Ltd., Kaiser Aluminium International, Inc., Kaiser Bauxite Company, KACL and KAFP to KAIC; and

	•		On the Effective Date following the transactions described above, KACC merged with and into KACC, LLC, with KACC, LLC as the surviving entity.

Following the Restructuring Transactions described above, the Company owns directly 100% of the issued and outstanding shares of capital stock of KAIC, and KAIC owns 49% of the ownership interests of Anglesey Aluminium Limited, 100% of the ownership interests of each of Trochus Insurance Co., Ltd., Kaiser Aluminium International, Inc., Kaiser Bauxite Company and KACL, and 100% of the issued and outstanding membership interests of each of KAFP and KACC, LLC. KACL holds the London, Ontario production facility and KAFP holds all other production facilities used by the Fabricated Products business unit. KACC, LLC, as the successor by merger to KACC, holds various non-operating properties.

Press Release Announcing Effective Date

A copy of the press release announcing the effectiveness of the Plan is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits


(c)		Exhibits.

3.1		Amended and Restated Certificate of Incorporation of Kaiser Aluminum Corporation (the “Company”) (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 8-A filed by the Company with the SEC on July 6, 2006).

3.2		Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form 8-A filed by the Company with the SEC on July 6, 2006).


10.1		Senior Secured Revolving Credit Agreement, dated as of July 6, 2006, among the Company, Kaiser Aluminum Investments Company, Kaiser Aluminum Fabricated Products, LLC, Kaiser Aluminium International, Inc., certain financial institutions from time to time party thereto, as lenders, J.P.Morgan Securities Inc., The CIT Group/Business Credit, Inc. and JPMorgan Chase Bank, N.A., as administrative agent.

10.2		Term Loan and Guaranty Agreement, dated as of July 6, 2006, among Kaiser Aluminum Fabricated Products, LLC, the Company and certain indirect subsidiaries of the Company listed as “Guarantors” thereto, certain financial institutions from time to time party thereto, as lenders, J.P.Morgan Securities Inc., JPMorgan Chase Bank, N.A., as administrative agent, and Wilmington Trust Company, as collateral agent.

10.3		Description of Compensation of Directors.

10.4		2006 Short Term Incentive Plan for Key Managers.

10.5		Employment Agreement, dated as of July 6, 2006, between the Company and Jack A. Hockema.

10.6		Employment Agreement, dated as of July 6, 2006, between the Company and Joseph P. Bellino.

10.7		Employment Agreement, dated as of July 6, 2006, between the Company and Daniel D. Maddox.

10.8		Form of Director Indemnification Agreement.

10.9		Form of Officer Indemnification Agreement.

10.10		Form of Director and Officer Indemnification Agreement.

10.11		Kaiser Aluminum Corporation 2006 Equity and Performance Incentive Plan (incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 filed by the Company with the SEC on July 6, 2006).

10.12		Form of Executive Officer Restricted Stock Award.

10.13		Form of Non-Employee Director Restricted Stock Award.

10.14		Kaiser Aluminum Fabricated Products Restoration Plan.

10.15		Amendment to Amended and Restated Non-Exclusive Consulting Agreement, dated as of June 30, 2006, between Kaiser Aluminum & Chemical Corporation and Edward F. Houff.

10.16		Stock Transfer Restriction Agreement, dated as of July 6, 2006, between the Company and National City Bank, in its capacity as the trustee for the trust that provides benefits for certain eligible retirees of Kaiser Aluminum & Chemical Corporation represented by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC (formerly known as the United Steelworkers of America, AFL-CIO, CLC) (the “USW”), the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America and its Local 1186, the International Association of Machinists and Aerospace Workers, the International Chemical Workers Union Council of the United Food & Commercial Workers, and the Paper, Allied-Industrial, Chemical and Energy Workers International Union, AFL-CIO, CLC and their surviving spouses and eligible dependents (the “Union VEBA Trust”) (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form 8-A filed by the Company with the SEC on July 6, 2006).

10.17		Registration Rights Agreement, dated as of July 6, 2006, among the Company, the Union VEBA Trust and the other parties thereto (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form 8-A filed by the Company with the SEC on July 6, 2006).


10.18		Director Designation Agreement, dated as of July 6, 2006, between the Company and the USW (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form 8-A filed by the Company with the SEC on July 6, 2006).

14.1		Kaiser Aluminum Corporation Code of Business Conduct and Ethics.

99.1		Press Release announcing Effective Date, dated July 6, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	KAISER ALUMINUM CORPORATION (Registrant)
	By:	/s/ John M. Donnan
		John M. Donnan
		Vice President, Secretary and General Counsel

Date: July 6, 2006

INDEX TO EXHIBITS


Exhibit
Number		Description

3.1		Amended and Restated Certificate of Incorporation of Kaiser Aluminum Corporation (the “Company”) (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 8-A filed by the Company with the SEC on July 6, 2006).

3.2		Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form 8-A filed by the Company with the SEC on July 6, 2006).

10.1		Senior Secured Revolving Credit Agreement, dated as of July 6, 2006, among the Company, Kaiser Aluminum Investments Company, Kaiser Aluminum Fabricated Products, LLC, Kaiser Aluminium International, Inc., certain financial institutions from time to time party thereto, as lenders, J.P.Morgan Securities Inc., The CIT Group/Business Credit, Inc. and JPMorgan Chase Bank, N.A., as administrative agent.

10.2		Term Loan and Guaranty Agreement, dated as of July 6, 2006, among Kaiser Aluminum Fabricated Products, LLC, the Company and certain indirect subsidiaries of the Company listed as “Guarantors” thereto, certain financial institutions from time to time party thereto, as lenders, J.P.Morgan Securities Inc., JPMorgan Chase Bank, N.A., as administrative agent, and Wilmington Trust Company, as collateral agent.

10.3		Description of Compensation of Directors.

10.4		2006 Short Term Incentive Plan for Key Managers.

10.5		Employment Agreement, dated as of July 6, 2006, between the Company and Jack A. Hockema.

10.6		Employment Agreement, dated as of July 6, 2006, between the Company and Joseph P. Bellino

10.7		Employment Agreement, dated as of July 6, 2006, between the Company and Daniel D. Maddox.

10.8		Form of Director Indemnification Agreement.

10.9		Form of Officer Indemnification Agreement.

10.10		Form of Director and Officer Indemnification Agreement.

10.11		Kaiser Aluminum Corporation 2006 Equity and Performance Incentive Plan (incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 filed by the Company with the SEC on July 6, 2006).

10.12		Form of Executive Officer Restricted Stock Award.

10.13		Form of Non-Employee Director Restricted Stock Award.

10.14		Kaiser Aluminum Fabricated Products Restoration Plan.

10.15		Amendment to Amended and Restated Non-Exclusive Consulting Agreement, dated as of June 30, 2006, between Kaiser Aluminum & Chemical Corporation and Edward F. Houff.

10.16		Stock Transfer Restriction Agreement, dated as of July 6, 2006, between the Company and National City Bank, in its capacity as the trustee for the trust that provides benefits for certain


Exhibit
Number		Description

		eligible retirees of Kaiser Aluminum & Chemical Corporation represented by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC (formerly known as the United Steelworkers of America, AFL-CIO, CLC) (the “USW”), the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America and its Local 1186, the International Association of Machinists and Aerospace Workers, the International Chemical Workers Union Council of the United Food & Commercial Workers, and the Paper, Allied-Industrial, Chemical and Energy Workers International Union, AFL-CIO, CLC and their surviving spouses and eligible dependents (the “Union VEBA Trust”) (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form 8-A filed by the Company with the SEC on July 6, 2006).

10.17		Registration Rights Agreement, dated as of July 6, 2006, among the Company, the Union VEBA Trust and the other parties thereto (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form 8-A filed by the Company with the SEC on July 6, 2006).

10.18		Director Designation Agreement, dated as of July 6, 2006, between the Company and the USW (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form 8-A filed by the Company with the SEC on July 6, 2006).

14.1		Kaiser Aluminum Corporation Code of Business Conduct and Ethics.

99.1		Press Release announcing Effective Date, dated July 6, 2006.

Exhibit 10.1

SENIOR SECURED REVOLVING CREDIT AGREEMENT

Among

KAISER ALUMINUM CORPORATION,
KAISER ALUMINUM INVESTMENTS COMPANY,
KAISER ALUMINUM FABRICATED PRODUCTS, LLC AND
KAISER ALUMINIUM INTERNATIONAL, INC.,
as Borrowers

and

THE LENDERS PARTY HERETO

and

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

J.P. MORGAN SECURITIES, INC.
as Sole Bookrunner

J.P. MORGAN SECURITIES, INC.
and
THE CIT GROUP/BUSINESS CREDIT, INC.
as Co-Lead Arrangers

THE CIT GROUP/BUSINESS CREDIT, INC.
and
BANK OF AMERICA
as Co-Syndication Agents

and

WACHOVIA BANK
and
WELLS FARGO FOOTHILL
as Co-Documentation Agents

Dated as of July 6, 2006

TABLE OF CONTENTS


			Page
ARTICLE 1. DEFINITIONS				1
	SECTION 1.01	Defined Terms		1
	SECTION 1.02	Classifications of Loans and Borrowings; Terms Generally		37
	SECTION 1.03	The Parent As Agent For Borrowers		38
	SECTION 1.04	The Term “Borrower” or “Borrowers”		38
	SECTION 1.05	Secured Obligations Not Affected		38

ARTICLE 2. AMOUNT AND TERMS OF CREDIT				39
	SECTION 2.01	The Facility		39
	SECTION 2.02	Revolving Loans		39
	SECTION 2.03	Loans and Borrowings		39
	SECTION 2.04	Requests for Borrowings		39
	SECTION 2.05	Protective Advances		40
	SECTION 2.06	Swingline Loans		41
	SECTION 2.07	Letters of Credit		42
	SECTION 2.08	Funding of Borrowings		47
	SECTION 2.09	Interest Elections		48
	SECTION 2.10	Termination of Commitments		50
	SECTION 2.11	Repayment of Loans; Evidence of Debt		50
	SECTION 2.12	Prepayment of Loans		51
	SECTION 2.13	Fees		53
	SECTION 2.14	Interest		54
	SECTION 2.15	Alternate Rate of Interest		54
	SECTION 2.16	Increased Costs		55
	SECTION 2.17	Breakfunding Payments		56
	SECTION 2.18	Taxes		57
	SECTION 2.19	Payments Generally; Allocation of Proceeds; Sharing of Set-offs		58
	SECTION 2.20	Mitigation Obligations; Replacement of Lenders		61
	SECTION 2.21	Indemnity for Returned Payments		61
	SECTION 2.22	Facility Increase		62

ARTICLE 3. REPRESENTATIONS AND WARRANTIES				63
	SECTION 3.01	Organization and Authority		63
	SECTION 3.02	Due Execution		63
	SECTION 3.03	Statements Made		64
	SECTION 3.04	Financial Statements		64
	SECTION 3.05	Real Property		64
	SECTION 3.06	Liens		65
	SECTION 3.07	Compliance with Law		65
	SECTION 3.08	Insurance		65
	SECTION 3.09	Use of Proceeds		65
	SECTION 3.10	Litigation.		65


			Page
	SECTION 3.11	Investment and Holding Company Status		65
	SECTION 3.12	Taxes		65
	SECTION 3.13	ERISA		66
	SECTION 3.14	Disclosure		66
	SECTION 3.15	Material Agreements		66
	SECTION 3.16	Reportable Transaction		66
	SECTION 3.17	Capitalization and Subsidiaries		66
	SECTION 3.18	Common Enterprise		67
	SECTION 3.19	Location of Bank Accounts		67
	SECTION 3.20	Labor Disputes		67
	SECTION 3.21	Environmental Matters		67
	SECTION 3.22	Confirmation Order; District Court Order		69
	SECTION 3.23	Consummation Date		69
	SECTION 3.24	Solvency		69
	SECTION 3.25	Security Interest in Collateral		70

ARTICLE 4. CONDITIONS OF LENDING				70
	SECTION 4.01	Conditions Precedent to Initial Loans and Initial Letters of Credit		70
	SECTION 4.02	Conditions Precedent to Each Loan and Each Letter of Credit		74

ARTICLE 5. AFFIRMATIVE COVENANTS				75
	SECTION 5.01	Financial Statements, Reports, etc.		75
	SECTION 5.02	Corporate Existence		79
	SECTION 5.03	Insurance		79
	SECTION 5.04	Obligations and Taxes		80
	SECTION 5.05	Notice of Event of Default, etc.		80
	SECTION 5.06	Access to Books and Records		80
	SECTION 5.07	Borrowing Base Certificate		81
	SECTION 5.08	Collateral Monitoring and Review		81
	SECTION 5.09	Projections		81
	SECTION 5.10	Maintenance of Properties and Intellectual Property Rights		81
	SECTION 5.11	Compliance with Laws		81
	SECTION 5.12	Use of Proceeds and Letters of Credit		82
	SECTION 5.13	Additional Collateral; Further Assurances		82
	SECTION 5.14	Environmental Covenant		83

ARTICLE 6. NEGATIVE COVENANTS				83
	SECTION 6.01	Liens		84
	SECTION 6.02	Merger, etc.		84
	SECTION 6.03	Indebtedness		84
	SECTION 6.04	Guarantees and Other Liabilities		86
	SECTION 6.05	Dividends; Capital Stock		86
	SECTION 6.06	Transactions with Affiliates		86
	SECTION 6.07	Investments, Loans, Advances, Guaranties and Acquisitions		87
	SECTION 6.08	Creation of Subsidiaries		88
	SECTION 6.09	Disposition of Assets		88


			Page
	SECTION 6.10	Nature of Business		88
	SECTION 6.11	Restrictive Agreements		88
	SECTION 6.12	Prepayment of Indebtedness; Subordinated Indebtedness		89
	SECTION 6.13	Fixed Charge Coverage		89
	SECTION 6.14	Amendments to Orders		90

ARTICLE 7. EVENTS OF DEFAULT				90
	SECTION 7.01	Events of Default		90

ARTICLE 8. THE ADMINISTRATIVE AGENT				93

ARTICLE 9. MISCELLANEOUS				96
	SECTION 9.01	Notices		96
	SECTION 9.02	Waivers; Amendments		97
	SECTION 9.03	Expenses; Indemnity; Damage Waiver		99
	SECTION 9.04	Successors and Assigns		101
	SECTION 9.05	Survival		105
	SECTION 9.06	Counterparts; Integration; Effectiveness		105
	SECTION 9.07	Severability		105
	SECTION 9.08	Right of Setoff		105
	SECTION 9.09	Governing Law; Jurisdiction; Consent to Service of Process		106
	SECTION 9.10	WAIVER OF JURY TRIAL		107
	SECTION 9.11	Headings		107
	SECTION 9.12	Confidentiality		107
	SECTION 9.13	Several Obligations; Nonreliance; Violation of Law		108
	SECTION 9.14	USA PATRIOT Act		108
	SECTION 9.15	Disclosure		108
	SECTION 9.16	Appointment for Perfection		108
	SECTION 9.17	Interest Rate Limitation		108

ARTICLE 10. CASH MANAGEMENT				109
	SECTION 10.01	Cash Management		109
	SECTION 10.02	Cash Dominion		109

iii


ANNEX A	-	Commitment Schedule
EXHIBIT A-1	-	Form of Reorganization Plan
EXHIBIT A-2	-	Form of Confirmation Order
EXHIBIT A-3	-	Form of District Court Order
EXHIBIT B	-	Form of Security and Pledge Agreement
EXHIBIT C	-	Form of Opinion of Counsel
EXHIBIT D	-	Form of Assignment and Assumption
EXHIBIT E	-	Form of Borrowing Base Certificate
EXHIBIT F	-	Form of Joinder Agreement
EXHIBIT G	-	Form of Borrowing Request
EXHIBIT H	-	Form of Mortgage
EXHIBIT I	-	Form of Intercompany Subordination Agreement
EXHIBIT J	-	Form of Second Amended and Restated Fee Letter

SCHEDULE 1.01(a)	-	Designated Asset Sales
SCHEDULE 1.01(b)	-	Specified Account Debtors
SCHEDULE 1.01(c)	-	Restructuring Transactions
SCHEDULE 1.01(d)	-	Reliance Account Debtors
SCHEDULE 2.07	-	Existing Letters of Credit
SCHEDULE 3.05	-	Real Property
SCHEDULE 3.06	-	Liens
SCHEDULE 3.07	-	Compliance with Laws
SCHEDULE 3.10	-	Litigation
SCHEDULE 3.12	-	Taxes
SCHEDULE 3.15	-	Material Agreements
SCHEDULE 3.17	-	Capitalization and Subsidiaries
SCHEDULE 3.19	-	Location of Bank Accounts
SCHEDULE 3.20	-	Labor Disputes
SCHEDULE 3.21	-	Environmental Matters
SCHEDULE 4.01(e)	-	Mortgaged Properties
SCHEDULE 4.01(n)	-	Material Consents
SCHEDULE 6.03	-	Existing Indebtedness
SCHEDULE 6.07	-	Existing Investments
SCHEDULE 6.09	-	Disposition of Assets
SCHEDULE 6.11	-	Restrictive Agreements
SCHEDULE 10.01	-	Bank Accounts

SENIOR SECURED REVOLVING CREDIT AGREEMENT

SENIOR SECURED REVOLVING CREDIT AGREEMENT, dated as of July 6, 2006, among KAISER ALUMINUM CORPORATION, a Delaware corporation (the “ Parent ”), KAISER ALUMINUM INVESTMENTS COMPANY, a Delaware corporation (“ KAIC ”), KAISER ALUMINUM FABRICATED PRODUCTS, LLC, a Delaware limited liability company (“ KAFP ”), and KAISER ALUMINIUM INTERNATIONAL, INC., a Delaware corporation (“ KAII ”, and together with the Parent, KAIC, KAFP and each other Subsidiary that becomes a Borrower pursuant to Section 5.13 , each a “ Borrower ” and collectively, the “ Borrowers ”), JPMORGAN CHASE BANK, N.A., a national banking association organized under the laws of the United States (“ JPMorgan Chase ”), THE CIT GROUP/BUSINESS CREDIT, INC., a New York corporation (“ CIT ”), and each of the other financial institutions from time to time party hereto (together with JPMorgan Chase and CIT, the “ Lenders ”) and JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity, the “ Administrative Agent ”) for the Lenders.

INTRODUCTORY STATEMENT

The Borrowers have requested that the Lenders make available to the Borrowers loans and other extensions of revolving credit in an aggregate principal amount not to exceed $200,000,000 (subject to an increase of up to $75,000,000 pursuant to Section 2.22 ), which extensions of credit will be used by the Borrowers for the purposes set forth in Section 3.09 .

The Borrowers have agreed to secure all of the Secured Obligations by granting to the Administrative Agent, on behalf of the Lenders, a security interest in and lien upon the Collateral as set forth in the Security and Pledge Agreement and any Mortgages.

Accordingly, the parties hereto hereby agree as follows:

ARTICLE 1. DEFINITIONS

SECTION 1.01 Defined Terms . As used in this Agreement, the following terms have the meanings specified below:

“ ABR Borrowing ” shall mean a Borrowing comprised of ABR Loans.

“ ABR Loan ” shall mean any Loan bearing interest at a rate determined by reference to the Alternate Base Rate in accordance with the provisions of Article 2 .

“ Account ” shall mean “account” as defined in Article 9 of the Uniform Commercial Code as in effect from time to time in the State of New York, or when the context implies, the Uniform Commercial Code as in effect from time to time in any other applicable jurisdiction.

“ Account Debtor ” shall mean any Person obligated on an Account.

“ Act ” shall have the meaning given such term in Section 9.14 .

“ Adjusted LIBO Rate ” shall mean, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the LIBO Rate for such interest period multiplied by the Statutory Reserve Rate.

“ Administrative Agent ” shall have the meaning set forth in the first paragraph of this Agreement and together with its successors appointed pursuant to Article 8 .

“ Administrative Questionnaire ” shall mean an Administrative Questionnaire in a form supplied by the Administrative Agent.

“ Affiliate ” shall mean, as to any Person, any other Person which, directly or indirectly, is in Control of, is Controlled by, or is under common Control with, such Person.

“ Aggregate Credit Exposure ” shall mean, at any time, the sum of the Revolving Credit Exposure of each of the Lenders.

“ Agreement ” shall mean this Senior Secured Revolving Credit Agreement, as the same may be amended, restated, modified or supplemented from time to time.

“ Alternate Base Rate ” shall mean, for any day, a rate per annum (rounded, if necessary, to the nearest 1/100 of 1%) equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 0.50%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

“ Anglesey ” shall mean Anglesey Aluminium Limited, a United Kingdom corporation, in which KAIC holds a 49% interest.

“ Applicable Commitment Fee Rate ” shall mean, at any time, with respect to the Commitment Fees payable hereunder, a rate equal to 0.20% per annum.

“ Applicable Equipment Value ” shall mean, with respect to Eligible Equipment that is Class 2 Equipment, Class 3 Equipment, Class 4 Equipment, Class 5 Equipment or Class 6 Equipment, (x) from the date of purchase of such Eligible Equipment to the date such Eligible Equipment is appraised in accordance with the terms hereof, an amount equal to 80% of the cash purchase price of such Eligible Equipment (excluding any portion thereof attributable to engineering, design and other soft costs or to taxes, shipping, handling, storage, delivery or similar charges) paid by the acquiring Borrower to purchase such Eligible Equipment and (y) at all times thereafter, the lesser of (i) the amount determined in accordance with clause (x) and (ii) 80% of the appraised Net Orderly Liquidation Value of such Eligible Equipment.

“ Applicable Margin ” shall mean, for any day, with respect to any ABR Loan or Eurodollar Loan, the applicable rate per annum set forth below under the caption “ABR Spread” or “Eurodollar Spread”, as the case may be, based on Quarterly Available Credit, provided that , until the end of the Fiscal Quarter ending September 30, 2006, the “Applicable Margin” shall be the applicable rate per annum set forth below in Category 2.


	Revolver			Revolver
Quarterly Available Credit	ABR Spread			Eurodollar Spread
Category 1 > 125,000,000		0.00	%		1.50	%
Category 2 < 125,000,000 and > 75,000,000		0.00	%		1.75	%
Category 3 < 75,000,000		0.25	%		2.00	%

For purposes of the foregoing, (a) the Applicable Margin shall be determined as of the end of each Fiscal Quarter of the Borrowers on a prospective basis for the immediately succeeding Fiscal Quarter based upon the Quarterly Available Credit for such ending Fiscal Quarter determined (absent manifest error) by the Administrative Agent using (i) the lesser of the Total Commitment and the Borrowing Base reported on each of the Borrowing Base Certificates delivered by the Borrowers’ Agent to the Administrative Agent pursuant to Section 5.07 during such Fiscal Quarter and (ii) the Aggregate Credit Exposure for each date of such Fiscal Quarter and (b) each change in the Applicable Rate resulting from a change in Quarterly Available Credit shall be effective as of the first date of such succeeding Fiscal Quarter following the quarter with respect to which the Quarterly Available Credit is calculated and ending on the date immediately preceding the effective date of the next such change, provided that Quarterly Available Credit shall be deemed to be in Category 3 (A) at any time that an Event of Default has occurred and is continuing or (B) at the option of the Administrative Agent if the Borrowers’ Agent fails to deliver the Borrowing Base Certificate required to be delivered by it pursuant to clause (a) above, during the period from the expiration of the time for delivery thereof until the date that such Borrowing Base Certificate is delivered. The Administrative Agent shall provide the Borrowers’ Agent with a statement of each calculation of Quarterly Available Credit promptly following the end of each Fiscal Quarter.

“ Approved Fund ” shall have the meaning given such term in Section 9.04(b) .

“ Assignment and Assumption ” shall mean an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04) , and accepted by the Administrative Agent, substantially in the form of Exhibit D or any other form approved by the Administrative Agent.

“ Availability ” shall mean, at any time, an amount equal to (a) the lesser of (i) the Total Commitment and (ii) the Borrowing Base, minus (b) the Aggregate Credit Exposure.

“ Availability Period ” shall mean the period from and including the Closing Date to but excluding the Termination Date.

“ Banking Services ” shall mean each and any of the following bank services provided to any Borrower by any Lender or any of its Affiliates: (a) commercial credit cards, (b) stored value cards, (c) purchasing cards and (d) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

“ Banking Services Obligation s” shall mean, with respect to any Borrower, any and all obligations of such Borrower, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

“ Banking Services Reserves ” shall mean all Reserves which the Administrative Agent from time to time establishes in its Permitted Discretion for Banking Services then provided or outstanding.

“ Bankruptcy Code ” shall mean The Bankruptcy Reform Act of 1978, as heretofore and hereafter amended, and codified as 11 U.S.C. Section 101 et seq.

“ Bankruptcy Court ” shall mean the United States Bankruptcy Court for the District of Delaware or any other court having jurisdiction over the Cases from time to time.

“ Board ” shall mean the Board of Governors of the Federal Reserve System of the United States.

“ Borrowers ” shall have the meaning as set forth in the first paragraph of this Agreement.

“ Borrowers’ Agent ” shall mean the Parent, in its capacity as agent for the Borrowers, as more fully described in Section 1.03 .

“ Borrowing ” shall mean (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect, (b) a Swingline Loan or (c) a Protective Advance.

“ Borrowing Base ” shall mean, at any time, an amount that is equal to the sum of:

(i) 85% of Eligible Accounts Receivable; plus

(ii) the lesser of (a) 65% of Eligible Inventory (valued at the lower of cost or market value, determined on a first-in, first-out basis), and (b) 85% of the Net Recovery Percentage (based upon the most recent Inventory appraisal delivered to the Administrative Agent in accordance with the terms hereof) of Eligible Inventory (valued at the lower of cost or market value, determined on a first-in, first-out basis); plus

(iii) the Real Property Percentage multiplied by 65% of the appraised Fair Market Value of Eligible Real Estate; plus

(iv) the sum of (A) the Class 1 Equipment Percentage multiplied by 80% of the appraised Net Orderly Liquidation Value of the Class 1 Equipment, plus (B) the Class 2 Equipment Percentage multiplied by the Applicable Equipment Value of the Class 2 Equipment, plus (C) the Class 3 Equipment Percentage multiplied by the Applicable Equipment Value of the Class 3 Equipment, plus (D) the Class 4 Equipment Percentage multiplied by the

Applicable Equipment Value of the Class 4 Equipment, plus (E) the Class 5 Equipment Percentage multiplied by the Applicable Equipment Value of the Class 5 Equipment, plus (F) the Class 6 Equipment Percentage multiplied by the Applicable Equipment Value of the Class 6 Equipment; minus

(v) Reserves.

The maximum amount that may be included in the Borrowing Base pursuant to clauses (iii) and (iv) above is $50,000,000, plus an amount equal to that portion of any Facility Increase allocated to the Fixed Asset Sublimit in accordance with Section 2.22 (the aggregate amount set forth in this sentence, the “ Fixed Asset Sublimit ”). The Administrative Agent retains the right to, from time to time, in its Permitted Discretion, establish additional standards of eligibility and reserves against eligibility and to reduce advance rates, with any changes in such standards to be effective upon delivery of notice thereof to the Borrowers’ Agent.

“ Borrowing Base Certificate ” shall mean a certificate substantially in the form of Exhibit E together with all supporting documentation required to be delivered as specified in Schedule 1 to Exhibit E (with such changes therein from time to time as may be required by the Administrative Agent in its Permitted Discretion to reflect the components of and reserves against the Borrowing Base as provided for hereunder from time to time), executed and certified by a Financial Officer of the Borrowers’ Agent.

“ Borrowing Request ” shall mean a borrowing request substantially in the form of Exhibit G or any other form approved by the Administrative Agent.

“ Business Day ” shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that , when used in connection with a Eurodollar Loan, the term “ Business Day ” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

“ Capital Expenditures ” shall mean, without duplication, any actual cash expenditure for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Parent and its Subsidiaries prepared in accordance with GAAP.

“ Capital Lease ” shall mean, with respect to any Person, any agreement pursuant to which such Person obtains the right to use any real or personal Property which is required to be classified and accounted for as a capital lease on the balance sheet of such Person under GAAP.

“ Capital Lease Obligations ” shall mean, with respect to any Person, the obligations of such Person to pay rent or other amounts under any Capital Lease and, for purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

“ Cases ” shall mean, collectively, the jointly administered cases filed by the Parent and certain of its Subsidiaries under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.

“ Cash Collateralization ” shall have the meaning given such term in Section 2.07(j) .

“ Cash Management Accounts ” shall mean those bank accounts of the Borrowers and their Significant Subsidiaries (excluding any foreign Subsidiary) listed on Schedule 3.19 that are maintained at one or more Cash Management Banks listed on Schedule 3.19 .

“ Cash Management Bank ” shall have the meaning given such term in Section 10.01(a) .

“ CERCLA ” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended or otherwise modified from time to time.

“ CERCLIS ” shall mean the Comprehensive Environmental Response Compensation Liability Information System List.

“ Change in Law ” shall mean (a) the adoption of any law, rule or regulation after the date of this Agreement; (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement; or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.16(b) , by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

“ Change of Control ” shall mean (a) the acquisition after the date hereof of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) (other than the VEBA Trusts), of shares representing more than 45% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of the Parent; (b) the occupation of a majority of the seats (other than vacant seats) on the Board of Directors of the Parent by Persons who were neither (1) nominated by the Board of Directors of the Parent nor (2) appointed by directors so nominated or (c) the acquisition of direct or indirect Control of any of the Borrowers by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) other than the Parent.

“ Claims ” shall have the meaning set forth in Section 101(5) of the Bankruptcy Code.

“ Class ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Swingline Loans or Protective Advances.

“ Class 1 Equipment ” shall mean, collectively, any and all Eligible Equipment in existence on the Closing Date and for which the Administrative Agent has received an appraisal report with respect to such Eligible Equipment from an independent appraiser reasonably satisfactory to the Administrative Agent setting forth the Net Orderly Liquidation Value of such Eligible Equipment.

“ Class 1 Equipment Percentage ” shall mean, as of any date, the percentage equal to one hundred percent (100%) minus the percentage obtained by dividing the number of full calendar months elapsed since the Closing Date by eighty-four (84).

“ Class 2 Equipment ” shall mean, collectively, any and all Eligible Equipment acquired by any Borrower after the Closing Date and on or before December 31, 2006.

“ Class 2 Equipment Percentage ” shall mean, as of any date after December 31, 2006, the percentage equal to one hundred percent (100%) minus the percentage obtained by dividing the number of full calendar months elapsed since December 31, 2006 by eighty-four (84).

“ Class 3 Equipment ” shall mean, collectively, any and all Eligible Equipment acquired by any Borrower during the period beginning January 1, 2007 and ending December 31, 2007.

“ Class 3 Equipment Percentage ” shall mean, as of any date after December 31, 2007, the percentage equal to one hundred percent (100%) minus the percentage obtained by dividing the number of full calendar months elapsed since December 31, 2007 by eighty-four (84).

“ Class 4 Equipment ” shall mean, collectively, any and all Eligible Equipment acquired by any Borrower during the period beginning January 1, 2008 and ending December 31, 2008.

“ Class 4 Equipment Percentage ” shall mean, as of any date after December 31, 2008, the percentage equal to one hundred percent (100%) minus the percentage obtained by dividing the number of full calendar months elapsed since December 31, 2008 by eighty-four (84).

“ Class 5 Equipment ” shall mean, collectively, any and all Eligible Equipment acquired by any Borrower during the period beginning January 1, 2009 and ending December 31, 2009.

“ Class 5 Equipment Percentage ” shall mean, as of any date after December 31, 2009, the percentage equal to one hundred percent (100%) minus the percentage obtained by dividing the number of full calendar months elapsed since December 31, 2009 by eighty-four (84).

“ Class 6 Equipment ” shall mean, collectively, any and all Eligible Equipment acquired by any Borrower during the period beginning January 1, 2010 and ending December 31, 2010.

“ Class 6 Equipment Percentage ” shall mean, as of any date after December 31, 2010, the percentage equal to one hundred percent (100%) minus the percentage obtained by dividing the number of full calendar months elapsed since December 31, 2010 by eighty-four (84).

“ Closing Date ” shall mean the date on which this Agreement has been executed and the conditions precedent to the making of the initial Loans set forth in Section 4.01 have been satisfied or waived, which date shall occur on the date requested by the Borrowers’ Agent following the date of entry of the Confirmation Order and the District Court Order but in no event later than August 31, 2006.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“ Collateral ” shall mean any and all property owned, leased or operated by a Person granted as security for the Secured Obligations pursuant to any other Loan Document and any and all other property of any Borrower, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of the Administrative Agent, on behalf of itself and the Lenders, to secure the Secured Obligations.

“ Collateral Access Agreement ” shall mean any landlord waiver or other agreement, in form and substance reasonably satisfactory to the Administrative Agent, between the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, and any third party (including any bailee, consignee, customs broker, or other similar Person) in possession of any Collateral or any landlord of any Borrower for any real Property where any Collateral is located and pursuant to which such third party, among other things, waives or subordinates any Lien such third party may have in respect of the Collateral, as such landlord waiver or other agreement may be amended, restated, supplemented or otherwise modified from time to time.

“ Collateral Documents ” shall mean, collectively, the Security and Pledge Agreement, the Mortgages and any other documents granting a Lien upon the Collateral as security for payment of the Secured Obligations.

“ Collateral Monitoring Fees ” shall have the meaning set forth in Section 5.08 .

“ Commitment ” shall mean, with respect to any Lender, the commitment of such Lender to make Revolving Loans and to acquire participations in Letters of Credit, Swingline Loans and Protective Advances hereunder, as such commitment may be (a) reduced from time to time pursuant to the terms hereof and (b) reduced or increased from time to time pursuant to assignments by or to Lender pursuant to Section 9.04(b) or pursuant to a Facility Increase in accordance with Section 2.22 . The initial amount of each Lender’s Commitment is set forth on Annex A – Commitment Schedule or, if applicable, in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment. The initial aggregate amount of all of the Lenders’ Commitments is $200,000,000.

“ Commitment Fee ” shall have the meaning set forth in Section 2.13 .

“ Commitment Letter ” shall mean that certain Commitment Letter, dated January 14, 2005, among the Administrative Agent, JPMSI, CIT, the Parent and KACC, as amended by Amendment No. 1 thereto, dated January 10, 2006, Amendment No. 2 thereto, dated April 26, 2006, and Amendment No. 3 thereto, dated April 26, 2006.

“ Commitment Percentage ” shall mean, with respect to any Lender, (a) with respect to Revolving Loans, Letter of Credit Exposure or Swingline Loans, a portion thereof equal to a fraction the numerator of which is such Lender’s Commitment and the denominator of which is the Total Commitment (if the Commitments have terminated or expired, the Commitment Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments), (b) with respect to Protective Advances or with respect to the Aggregate Credit Exposure prior to the Termination Date, a portion thereof equal to a fraction the numerator of which is such Lender’s Commitment and the denominator of which is the Total Commitment, and (c) with respect to Protective Advances or with respect to the Aggregate Credit Exposure after the Termination Date, a portion thereof equal to a fraction the numerator of which is such Lender’s Revolving Credit Exposure and the denominator of which is the Aggregate Credit Exposure.

“ Commitment Schedule ” shall mean the Schedule attached as Annex A hereto and identified as the Commitment Schedule.

“ Commodity Swap Agreement ” shall mean any Swap Agreement involving or settled by reference to one or more commodities.

“ Confirmation Order ” shall mean the order confirming the Reorganization Plan, attached as Exhibit A-2 , entered by the Bankruptcy Court on February 6, 2006.

“ Consummation Date ” shall mean the date of the substantial consummation (as defined in Section 1101 of the Bankruptcy Code and which for purposes of this Agreement shall be no later than the effective date of a Reorganization Plan) of a Reorganization Plan that is confirmed pursuant to the Confirmation Order and affirmed by the District Court Order.

“ Control ” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.

“ Covenant Release Event ” shall mean, as of any date following the occurrence of a Covenant Trigger Event, the first date upon which both of the following conditions have been satisfied: (i) Availability has exceeded $50,000,000 for each day during the ninety (90) consecutive calendar day period ending on such date after the immediately preceding Covenant Trigger Event and (ii) at least 365 days have elapsed since the date of the last Covenant Release Event, if any.

“ Covenant Trigger Event ” shall mean any date on which Availability has been less than $35,000,000 for any period of five (5) consecutive Business Days ending on such date. A Covenant Trigger Event shall be deemed to have occurred and be continuing from the occurrence of such Covenant Trigger Event up to but not including the first date upon which a Covenant Release Event occurs following such Covenant Trigger Event.

“ Default ” shall mean any event or condition which constitutes an Event of Default or which upon notice, lapse of time, or both would, unless cured or waived, constitute an Event of Default.

“ Defaulting Lender ” shall have the meaning given to such term in Section 2.08(b) .

“ Departing Lender ” shall have the meaning given to such term in Section 2.20(b) .

“ Designated Asset Sale ” shall mean each asset sale that is described on Schedule 1.01(a) hereto.

“ Disqualified Indebtedness ” shall mean any Indebtedness for borrowed money and any bond, note, indenture or similar instrument issued, assumed or acquired in connection with an acquisition if the instrument governing such Indebtedness or other obligation (i) has a scheduled maturity date earlier than ninety (90) days after the Maturity Date or (ii) requires any Borrower to make any scheduled or mandatory payments of principal or to otherwise purchase or redeem, or make sinking fund or other similar payments with respect to, such Indebtedness earlier than ninety (90) days after the Maturity Date; provided that the amount of such Indebtedness under this clause (ii) shall be the aggregate principal amount of all such scheduled or mandatory payments, purchases, redemptions, or sinking fund or other similar payments required to be made earlier than ninety (90) days after the Maturity Date.

“ District Court ” shall mean the United States District Court for the District of Delaware.

“ District Court Order ” shall mean the order affirming the Confirmation Order, attached as Exhibit A-3 , entered by the District Court on May 11, 2006.

“ Dollars ” and “ $ ” shall mean lawful money of the United States of America.

“ Dominion Release Event ” shall mean, as of any date following the occurrence of a Dominion Trigger Event, the first date upon which both of the following conditions have been satisfied: (i) Availability has exceeded $65,000,000 for each day during the ninety (90) consecutive calendar day period ending on such date after the immediately preceding Dominion Trigger Event and (ii) at least 365 days have elapsed since the date of the last Dominion Release Event, if any.

“ Dominion Trigger Event ” shall mean any date on which Availability has been less than $50,000,000 for any period of five (5) consecutive Business Days ending on such date. A Dominion Trigger Event shall be deemed to have occurred and be continuing from the occurrence of such Dominion Trigger Event up to but not including the first date upon which a Dominion Release Event occurs following such Dominion Trigger Event.

“ EBITDA ” shall mean, for the Borrowers and their Subsidiaries on a consolidated basis, for any period, in each case as determined in accordance with GAAP, Net Income for such period plus, (a) to the extent deducted in determining Net Income for such period, (i) Interest Expense, (ii) expense or benefit for income taxes, (iii) depreciation, (iv) amortization, (v) extraordinary losses incurred, and (vi) any other non-cash charges except to the extent that any such non-cash charge (x) could reasonably be expected to result in a cash payment during the term of this Agreement or (y) represents amortization of a prepaid cash item paid in a prior period, minus (b) to the extent included in determining Net Income, extraordinary gains realized.

“ EDGAR ” shall mean the SEC’s Electronic Data Gathering Analysis and Retrieval System (or any successor system).

“ Eligible Accounts Receivable ” shall mean, at any time, all Accounts of the Borrowers unless such Account is excluded from “Eligible Accounts Receivable” in accordance with the following provisions of this definition. Without limiting the Administrative Agent’s Permitted Discretion provided herein, Eligible Accounts Receivable shall not include any Account: (i) which is not subject to a perfected first-priority security interest in favor of the Administrative Agent; (ii) which is subject to any Lien other than (a) a Lien in favor of the Administrative Agent and (b) a Permitted Lien or other Lien permitted under this Agreement in each case, which does not have priority over the Lien in favor of the Administrative Agent; (iii) with respect to which more than ninety (90) days have elapsed since the date of the original invoice therefor; (iv) owing by an Account Debtor as to which 25% or more of the dollar amount of all accounts owing by such Account Debtor are more than ninety (90) days past the date of the original invoice for such accounts; (v) to any one Account Debtor or group of affiliated Account Debtors that are in excess of 15% of total Eligible Accounts Receivable (or, solely in the case of the Reliance Account Debtors, that are in excess of 25% of total Eligible Accounts Receivable); provided that in each such case only those Accounts Receivable owing to such Account Debtor or group of affiliated Account Debtors that are in excess of 15% (or 25% in the case of the Reliance Account Debtors) of the total Eligible Accounts Receivable as set forth on the most recent Borrowing Base Certificate delivered hereunder shall be deemed ineligible as a result of this clause (v) ; (vi) with respect to which any covenant, representation, or warranty contained in this Agreement or in the Security Agreement has been breached in any material respect or is not true in all material respects; (vii) which does not arise from the sale of goods or performance of services in the ordinary course of the applicable Borrower’s business; (viii) which is not evidenced by an invoice or other documentation reasonably satisfactory to the Administrative Agent which has been sent to the Account Debtor; (ix) which is contingent upon the completion of any further performance by any Borrower or Affiliate of any Borrower (other than alumina purchase or sales agreements and product returns in the ordinary course of business); (x) owing by a director, officer, employee or Affiliate of any Borrower; (xi) for which the goods giving rise to such Account have not been shipped to the Account Debtor or for which the services giving rise to such Account have not been performed by the applicable Borrower (other than bill and hold Accounts which satisfy the requirements set forth in clause (xxiii) below); (xii) which is owed by an Account Debtor which has (a) applied for, suffered, or consented to the appointment of any receiver, custodian, trustee, or liquidator of its assets, (b) had possession of all or a material part of its property taken by any receiver, custodian, trustee or liquidator, (c) filed, or had filed against it, any request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or voluntary or involuntary case under any state or federal bankruptcy laws, (d) admitted in writing its inability, or is generally unable to, pay its debts as they become due, (e) become insolvent, or (f) ceased operation of its business; provided , however , that in each case of clauses (a) through (f) above the Administrative Agent may determine, in its Permitted Discretion, that post-petition Accounts owning by a debtor-in-possession under Chapter 11 of the Bankruptcy Code shall not be deemed ineligible; (xiii) which is owed by any Account Debtor which has sold all or substantially all of its assets; (xiv) which is owed by (a) the government (or any department, agency, public corporation, or instrumentality thereof) of any country other than the U.S. unless such Account is backed by a Letter of Credit acceptable to the Administrative Agent which is in the possession of

the Administrative Agent, or (b) the government of the United States of America, or any department, agency, public corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other steps necessary to perfect the Lien of the Administrative Agent in such Account have been complied with to the Administrative Agent’s satisfaction; (xv) which is owed by an Account Debtor which (a) does not maintain its chief executive office in the U.S., the United Kingdom or Canada (other than the Canadian province of Quebec) or (b) is not organized under applicable law of the U.S., any state of the U.S., the United Kingdom, Canada, or any province of Canada (other than the Canadian province of Quebec) unless such Account is either (x) backed by a Letter of Credit acceptable to the Administrative Agent which is in the possession of the Administrative Agent or (y) owed by an Account Debtor specified by the Administrative Agent in its Permitted Discretion; provided , however , such Accounts of Account Debtors under this clause (y) shall not exceed 20% of the total Eligible Accounts Receivable, or (z) owed by an Account Debtor listed on Schedule 1.01(b) , as such schedule may be amended from time to time by the Borrowers’ Agent with the consent of the Required Lenders; (xvi) which is or is reasonably likely to be subject to any counterclaim, deduction, defense, setoff or dispute and then only to the extent of such counterclaim, deduction, defense, setoff or dispute; (xvii) which is evidenced by any promissory note, chattel paper or instrument; (xviii) which is owed by an Account Debtor located in any jurisdiction which requires filing of a “Notice of Business Activities Report” or other similar report in order to permit the applicable Borrower to seek judicial enforcement in such jurisdiction of payment of such Account, unless such Borrower has filed such report or is qualified to do business in such jurisdiction; (xix) with respect to which any Borrower or Affiliate of any Borrower has made any agreement with the Account Debtor for any reduction thereof, other than discounts and adjustments given in the ordinary course of business; (xx) which the Administrative Agent determines in its Permitted Discretion may not be paid by reason of the Account Debtor’s inability to pay or which the Administrative Agent otherwise determines in its Permitted Discretion is unacceptable for any reason whatsoever; (xxi) that is payable in any currency other than Dollars, other than Accounts (a) payable in Euros, Pounds Sterling, or Canadian Dollars and (b) specified by the Administrative Agent in its Permitted Discretion; provided, however, that the amount of all such Accounts payables in Euros, Pounds Sterling and Canadian Dollars shall not exceed in the aggregate $4,000,000; provided , further , that, with respect to Accounts owed in any currency other than Dollars, the value of such Accounts for purposes of calculating the Borrowing Base shall be expressed in Dollars as of the date of the applicable Borrowing Base Certificate, each such value to be calculated on a basis acceptable to the Administrative Agent in its Permitted Discretion; (xxii) which is a guaranteed sale, sale and return, sale on approval, consignment, cash-on-delivery or other repurchase or return basis (excluding Accounts that are subject to returns in the ordinary course of business); (xxiii) that is the subject of a bill and hold or for which the goods have not been shipped ( provided that such Account will be deemed eligible if the Account Debtor with respect to such Account has delivered an agreement (in form and substance acceptable to the Agent) between the Account Debtor, the applicable Borrower and the Administrative Agent pursuant to which such Account Debtor unconditionally agrees to accept delivery of such goods and waives any rights of off-set with respect to such Account or such Account Debtor unconditionally agrees to pay in cash for such Account in the event such Account Debtor elects not to take delivery); (xxiv) which represents a progress billing; and (xxv) such other categories as may be established by the Administrative Agent in its Permitted

Discretion. Notwithstanding the foregoing, any domestic Account which would otherwise be deemed ineligible may be deemed eligible by the Administrative Agent in its Permitted Discretion if such Account is supported by a letter of credit in form and substance acceptable to the Administrative Agent.

“ Eligible Equipment ” shall mean machinery, equipment and rolling stock (solely for purposes of this definition and any definition used in the calculation of the Borrowing Base, “ Equipment ”) owned by a Borrower and located in the United States, which satisfies each of the following requirements: (i) the applicable Borrower has good and marketable title to the Equipment; (ii) the full purchase price for the Equipment has been paid by the applicable Borrower; (iii) the Equipment is located on premises owned or leased by the applicable Borrower ( provided that with respect to Equipment that is located at a leased facility, the Administrative Agent shall have received a Collateral Access Agreement in form and substance acceptable to the Administrative Agent or the Administrative Agent shall have implemented Reserves in an amount equal to three (3) months rent for such leased facility, but without duplication of any Reserves for rent pursuant to any other provision of this Agreement); (iv) the Equipment is in good repair and working order; (v) the Equipment is not subject to any agreement which restricts the ability of the applicable Borrower to use, sell, transport or dispose of the Equipment or which restricts the Administrative Agent’s ability to take possession of, sell or otherwise dispose of the Equipment; (vi) the Equipment does not constitute “fixtures” under the applicable laws of the jurisdiction in which the Equipment is located; (vii) solely in the case of Class 1 Equipment, the Administrative Agent has received an appraisal report with respect to the Equipment from an independent appraiser reasonably satisfactory to the Administrative Agent setting forth the Net Orderly Liquidation Value of the Equipment; (viii) the Administrative Agent has a perfected first-priority Lien on the Equipment subject to no other Liens, except Liens permitted under Section 6.01 hereof that are subordinate and junior to the Lien in favor of the Administrative Agent; and (ix) the Administrative Agent has not determined, in its Permitted Discretion that such Equipment is ineligible.

“ Eligible Inventory ” shall mean, at any time, the Inventory of a Borrower unless such Inventory is excluded from the definition of Eligible Inventory in accordance with the following provisions of this definition. Without limiting the Administrative Agent’s Permitted Discretion provided herein, Eligible Inventory shall not include any Inventory: (i) which is not subject to a first-priority perfected security interest in favor of the Administrative Agent; (ii) which is subject to any Lien other than (a) a Lien in favor of the Administrative Agent and (b) a Lien permitted under Section 6.01 hereof which Lien is subordinate and junior to the Lien in favor of the Administrative Agent; (iii) which is, in the Administrative Agent’s opinion, applying its Permitted Discretion, slow moving, obsolete, unmerchantable, defective, unfit for sale, not salable at prices approximating at least the cost of such Inventory in the ordinary course of business or unacceptable due to age, type, category and/or quantity; (iv) with respect to which any covenant, representation, or warranty contained in this Agreement or the Security Agreement has been breached in any material respect or is not true in all material respects; (v) which does not conform in all material respects to all standards imposed by any governmental authority; (vi) located outside of the United States and Canada or located in the Canadian province of Quebec; (vii) that is in transit except for Inventory in transit between locations controlled by a Borrower; (viii) which is located in any location not owned or operated by a Borrower or is in the possession of a bailee unless the owner of such property, the bailee, and any other applicable

party has delivered to the Administrative Agent a Collateral Access Agreement and such other documentation as the Administrative Agent may in its Permitted Discretion require ( provided , however , that $4,000,000 of such Inventory may be included in the Borrowing Base even if Collateral Access Agreements and such other documentation as the Administrative Agent may require have not been obtained for such Inventory); (ix) which is located in any location not owned by a Borrower but is operated by such Borrower, unless the owner of such property and any other applicable party has delivered to the Administrative Agent a Collateral Access Agreement and such other documentation as the Administrative Agent may in its Permitted Discretion require or the Administrative Agent shall have implemented Reserves equal to three months rent for such facility, but without duplication of any Reserves for rent pursuant to any other provision of this Agreement; (x) which contains or bears any intellectual property rights licensed from any party other than a Borrower unless the Administrative Agent is satisfied, in its Permitted Discretion, that it may sell or otherwise dispose of such Inventory without (a) infringing the rights of such licensor, (b) violating any contract with such licensor, or (c) incurring any liability with respect to payment of royalties other than royalties incurred pursuant to sale of such Inventory under the current licensing agreement; (xi) which is not reflected in the books and records of the applicable Borrower; (xii) that is held by any Borrower on consignment or which any Borrower has placed on consignment with another Person (other than a Person that is a third party processor of such Inventory (in which case such Inventory shall be included as Eligible Inventory to the extent provided in clause (viii) above)); (xiii) that consists of display items or packing or shipping materials or stores; provided that such stores may be deemed eligible in the Administrative Agent’s Permitted Discretion upon receipt of an inventory appraisal with respect to such stores, which appraisal shall be done in a manner acceptable to the Administrative Agent by an appraiser acceptable to the Administrative Agent; (xiv) which is bill-and-hold goods, returned or repossessed goods, or goods which are not of a type held for sale in the ordinary course of the applicable Borrower’s business; (xv) which is perishable; and (xvi) such other categories as may be established by the Administrative Agent in its Permitted Discretion.

“ Eligible Real Estate ” shall mean any real Property which meets all of the following specifications:

(a) one of the Borrowers is the record owner of and has good fee title to such real Property;

(b) such Borrower has the right to subject such real Property to a Lien in favor of the Administrative Agent for the ratable benefit of the Lenders;

(c) the Administrative Agent shall have received a Mortgage with respect to such real Property, duly executed by such Borrower, together with evidence that (i) counterparts of the Mortgage have been duly delivered for filing or recording in all filing or recording offices that the Administrative Agent may reasonably deem necessary or desirable in order to create a first priority perfected Lien in favor of the Administrative Agent for the benefit of the Lenders on such real Property, free and clear of all Liens of any nature whatsoever (except for Permitted Liens acceptable to the Administrative Agent in its Permitted Discretion) and (ii) all filing and recording taxes and fees necessary to properly record the Mortgage in such offices have been paid;

(d) such real Property is not subject to any contractual restriction on the Administrative Agent’s ability to sell or otherwise dispose of such real Property;

(e) the Administrative Agent shall have received Phase I (and, if necessary, Phase II) environmental reports delivered with respect to such real Property together with letters from the environmental engineering firms reasonably satisfactory to the Administrative Agent providing that the Administrative Agent and the Lenders may rely upon such reports, each in form and substance reasonably acceptable to the Administrative Agent;

(f) with respect to such real Property, such surveys or surveyor certificates as the Administrative Agent may reasonably require, each of which shall be in form and substance reasonably satisfactory to the Administrative Agent;

(g) the Administrative Agent shall have received evidence reasonably acceptable to the Administrative Agent as to whether such real Property is located in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards and requiring either the applicable Borrower that is the owner of the real Property or the Administrative Agent to purchase special flood insurance and, if so required, evidence that the applicable Borrower that owns such real Property has obtained flood hazard insurance as required by law;

(h) with respect to such real Property, the Administrative Agent shall have received an ALTA loan title insurance policy or an unconditional commitment therefor with extended coverage, including insurance over matters that would be disclosed by an accurate survey, issued by a title company reasonably satisfactory to Administrative Agent insuring the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, that the applicable Mortgage insured thereby creates a valid first lien on such real Property, in an amount not less than the appraised fair market value of such real Property and insuring that fee simple title to such Property is vested in the applicable Borrower, subject only to any exceptions as may be reasonably acceptable to the Administrative Agent and which appear as exceptions on Schedule B to the applicable title insurance loan policy, which policy shall include endorsements, including a comprehensive lender’s endorsement and any other legally available endorsements, assurances or affirmative coverage reasonably requested by the Administrative Agent;

(i) the Administrative Agent shall have received copies of all recorded documents listed as exceptions to title or otherwise referred to in such title insurance loan policy and any other such documents as Administrative Agent shall reasonably request;

(j) the Administrative Agent shall have received appraisals, together with reliance letters where applicable, concerning such real Property from one or more independent real estate appraisers reasonably satisfactory to the Administrative Agent, which appraisals shall set forth the Fair Market Value of such real Property and be in form, scope and substance reasonably satisfactory to the Administrative Agent and shall satisfy the requirements of any applicable laws and regulation;

(k) if requested by the Administrative Agent, the Administrative Agent shall have received an opinion of local counsel for the Borrowers in the State in which the

real Property is located with respect to the enforceability and perfection of the Mortgage and any related fixture filings in form and substance reasonably satisfactory to the Administrative Agent;

(l) in the event that the Mortgage with respect to such real Property is not sufficient, pursuant to local law, to perfect the Lien of the Administrative Agent in the Fixtures located on such real Property, a UCC fixture financing statement shall have been duly delivered for filing or recording in all filing or recording offices that the Administrative Agent may reasonably deem necessary or desirable in order to create a first priority perfected Lien in favor of the Administrative Agent for the benefit of the Lenders on such Fixtures; and

(m) the Administrative Agent has not determined, in its Permitted Discretion, that such real Property is ineligible.

“ Environmental Compliance Reserve ” shall mean any reserve which the Administrative Agent establishes in its Permitted Discretion from time to time for amounts that are reasonably likely to be expended by the Borrowers and their Subsidiaries in order for the Borrowers and their Subsidiaries and their respective operations and property (a) to comply with Environmental Laws in all material respects, (b) to correct in all material respects any such non-compliance with Environmental Laws or (c) to satisfy any Environmental Liability.

“ Environmental Laws ” shall mean all applicable federal, state, local or foreign statutes, laws, regulations, ordinances, codes, rules, requirements and guidelines (including consent decrees and administrative orders to which any Borrower or any of its Subsidiaries is subject) relating to protection of human health or the environment or imposing liability or standards of conduct concerning any Hazardous Material, as any of the foregoing may be from time to time amended or supplemented.

“ Environmental Liability ” shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrowers or any of their Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law; (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials; (c) exposure to any Hazardous Materials; (d) the release or threatened release of any Hazardous Materials into the environment; or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ Environmental Lien ” shall mean a Lien in favor of any Governmental Authority for (a) any liability under Environmental Laws; or (b) damages arising from or costs incurred by such Governmental Authority in response to a release or threatened release of a hazardous or toxic waste, substance or constituent, or other substance into the environment.

“ Equipment ” shall mean (a) any machinery or equipment and (b) any other Property classified as “equipment” under the UCC.

“ Equity Interests ” shall mean shares of capital stock in a corporation, partnership interests in a partnership, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing.

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“ ERISA Affiliate ” shall mean each person (as defined in Section 3(9) of ERISA) which together with any Borrower or any Subsidiary of any Borrower would be deemed to be a single employer within the meaning of Section 414(b) , (c) , (m) , or (o) of the Code.

“ Eurodollar Borrowing ” shall mean a Borrowing comprised of Eurodollar Loans.

“ Eurodollar Loan ” shall mean any Loan bearing interest at a rate determined by reference to the Adjusted LIBO Rate in accordance with the provisions of Section 2 .

“ Event of Default ” shall have the meaning given such term in Section 7 .

“ Excluded Asset Disposition ” shall mean (i) any Designated Asset Sale, (ii) any sale of inventory in the ordinary course of business and (iii) any sale, transfer or other disposition of one or more assets in a single transaction or series of related transactions if the aggregate proceeds received in connection with such transaction or series of related transactions is less than $500,000.

“ Excluded Subsidiaries ” shall mean Reorganized KACC, Kaiser Bauxite and Trochus and any of their Subsidiaries. Under no circumstances will an Excluded Subsidiary be, or be deemed to be, a Significant Subsidiary or a Subsidiary hereunder.

“ Excluded Taxes ” shall mean, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrowers hereunder, (a) Taxes imposed on or measured by its overall net income or its overall gross income (other than withholding Taxes) and franchise Taxes imposed in lieu thereof by the United States of America or by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its lending office or principal executive office is located, (b) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction in which such lending office or principal executive office is located and (c) in the case of a Lender, any withholding Tax that is imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Lender’s failure to comply with Section 2.18(e) , provided however , that an assignee of a Lender or a newly designated lending office shall not be subject to this clause (c) to the extent of any additional amounts which at the time of designation or assignment the designating or assigning Lender was entitled to receive that were not subject to this clause (c) .

“ Existing Credit Agreement ” shall mean that certain Secured Super-Priority Debtor-in-Possession Revolving Credit and Guaranty Agreement dated as of February 11, 2005, as amended, among the “Borrowers” (as defined therein), the “Guarantors” (as defined therein), the Existing Lenders and JPMorgan Chase, as administrative agent.

“ Existing Lenders ” shall mean the financial institutions from time to time party to the Existing Credit Agreement.

“ Existing Letters of Credit ” shall mean the letters of credit described on Schedule 2.07 .

“ Extraordinary Receipts ” shall mean any Net Proceeds received by any Borrower not in the ordinary course of business, including, without limitation, (i) foreign, United States, state or local tax refunds, (ii) pension plan reversions, (iii) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, (iv) indemnity payments, (v) any purchase price adjustment received in connection with any purchase agreement, and (vi) any proceeds from any escrow; provided , however , that such indemnity payments or proceeds shall not include proceeds from any insurance for asbestos claims and demands, silica claims and demands, coal tar pitch volatile claims and demands and noise induced hearing loss claims in escrow as of the date hereof or later received.

“ Facility Increase ” shall have the meaning specified in Section 2.22 .

“ Facility Increase Amount ” shall have the meaning specified in Section 2.22 .

“ Facility Increase Effective Date ” shall have the meaning specified in Section 2.22 .

“ Fair Market Value ” shall mean, with respect to real Property of any Person, the fair market value thereof as determined in the most recent appraisal received by the Administrative Agent in accordance with the terms hereof, which appraisal shall be done in a manner acceptable to the Administrative Agent by an appraiser acceptable to the Administrative Agent.

“ Federal Funds Effective Rate ” shall mean, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“ Fee Letter ” shall mean, collectively (i) that certain Second Amended and Restated Fee Letter, dated July 6, 2006, among JPMorgan Chase, JPMSI, the Parent and KACC, (ii) that certain Amendment Fee Letter, dated December 23, 2005, among JPMorgan Chase, the Parent and KACC, and (iii) that certain Second Amendment Fee Letter, dated April 26, 2006, among JPMorgan Chase, the Parent and KACC.

“ Fees ” shall collectively mean the Commitment Fee, the Letter of Credit Fees, the Collateral Monitoring Fees, other fees referred to in Section 2.13 , and all other fees referred to in any Loan Document.

“ Financial Officer ” shall mean, with respect to any Person, the chief financial officer, principal accounting officer, treasurer, assistant treasurer or controller of such Person or

any other Person who performs a function similar to any of the foregoing and has been identified in writing to the Administrative Agent as a “Financial Officer” hereunder.

“ Fiscal Month ” shall mean any of the monthly accounting periods of the Borrowers and their Subsidiaries.

“ Fiscal Quarter ” shall mean any of the quarterly accounting periods of the Borrowers and their Subsidiaries, ending on March 31, June 30, September 30 and December 31 of each year.

“ Fiscal Year ” shall mean any of the annual accounting periods of the Borrowers and their Subsidiaries ending on December 31 of each year.

“ Fixed Asset Sublimit ” shall have the meaning specified in the definition of Borrowing Base.

“ Fixed Charge Coverage Ratio ” shall mean the ratio, determined as of the end of any period, of (a) EBITDA for the period of determination minus Net Capital Expenditures for such period of determination to (b) Fixed Charges for such period of determination, all calculated for the Borrowers and their Subsidiaries on a consolidated basis in accordance with GAAP; provided that for periods ending prior to the end of the fourth full Fiscal Quarter following the Closing Date, the Borrowers may submit a written request to the Administrative Agent proposing adjustments to EBITDA and Fixed Charges for purposes of calculating the Fixed Charge Coverage Ratio for the applicable period to more accurately reflect the allocation or exclusion of one-time charges over two or more Fiscal Quarters and, if the Required Lenders consent to such adjustments, such adjustment shall be made for calculating Fixed Charge Coverage Ratio for the applicable period.

“ Fixed Charges ” shall mean, for the Borrowers and their Subsidiaries on a consolidated basis, with reference to any period, without duplication, cash Interest Expense paid during such period, plus scheduled principal payments on Indebtedness (including rent or other payments on Capital Lease Obligations other than imputed interest components thereof) made during such period, plus , if and to the extent Availability at the time of measurement is less than the amount of the Borrowing Base attributable at such time to Equipment and real estate, the reduction in Availability during such period resulting from the amortization of the components of the Borrowing Base consisting of Equipment and real estate, plus , expense for income taxes paid in cash during such period, plus dividends or other distributions paid in cash to holders of Equity Interests in the Parent in respect thereof during such period (excluding distributions paid to holders of Equity Interests in the Parent pursuant to the Reorganization Plan on account of Claims in the Cases).

“ Fixtures ” shall mean any Property classified as “fixtures” under the UCC.

“ Foreign Lender ” shall mean any Lender that is organized under the laws of a jurisdiction other than that in which the Borrowers’ Agent is located. For purposes of this definition, the United States of America, each State thereof, and the District of Columbia shall be deemed to constitute a single jurisdiction.

“ Funding Account ” shall have the meaning set forth in Section 4.01(u) .

“ GAAP ” shall mean generally accepted accounting principles in the United States of America as in effect from time to time applied in accordance with Section 1.02 .

“ Governmental Authority ” shall mean the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“ Guarantee ” shall mean, with respect to any Person (such Person, a “ guarantor ”), any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof; (ii) to purchase or lease property, securities or services for the primary purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof; (iii) to advance funds to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation; or (iv) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided , that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee of any guarantor shall be deemed to be the lower of (x) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made and (y) the maximum amount for which such guarantor may be liable pursuant to the terms of the instrument embodying such Guarantee.

“ Hazardous Materials ” shall mean any “hazardous substance,” as defined by CERCLA; any “hazardous waste,” as defined by the Resource Conservation and Recovery Act, as amended; any petroleum product; or any pollutant or contaminant or hazardous, dangerous, or toxic chemical, material, or substance regulated under or within the meaning of any other Environmental Law.

or similar facilities; (viii) all Swap Obligations of such Person (and the amount of Indebtedness attributable to all Swap Obligations of such Person shall be deemed to be the Net Mark-to-Market Exposure with respect thereto); (ix) all Guarantees by such Person of Indebtedness of others; (x) all Indebtedness referred to in clauses (i) through (ix) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness, provided that , if such Person has not assumed such obligations, then the amount of Indebtedness of such Person for purposes of this clause (x) shall be equal to the lesser of the amount of the obligations of the holder of such obligations and the fair market value of the assets of such Person which secure such obligations; (xi) obligations under any liquidated earn-out; and (xii) obligations of such Person to purchase securities or other property prior to the date that is six months after the Maturity Date arising out of or in connection with the sale of the same or substantially similar securities or property or any other Off-Balance Sheet Liability. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“ Indemnified Taxes ” shall mean Taxes other than Excluded Taxes.

“ Indemnitee ” shall have the meaning given to such term in Section 9.03 .

“ Insufficiency ” shall mean, with respect to any Plan, its “amount of unfunded benefit liabilities” within the meaning of Section 4001(a)(18) of ERISA, if any.

“ Insurer Appeals ” shall mean the appeals of the District Court Order filed by (i) Columbia Casualty Insurance Company, Transcontinental Insurance Co., Harbor Insurance Co., Continental Insurance Company, docketed in the Third Circuit Court of Appeals as case number 06-3045; (ii) Republic Indemnity Company and Transport Insurance Company, f/k/a Transport Indemnity Company, docketed in the Third Circuit Court of Appeals as case number 06-3046; and (iii) TIG Insurance Company, docketed in the Third Circuit Court of Appeals as case number 06-3047.

“ Intercompany Subordination Agreement ” shall have the meaning given to such term in Section 6.03 .

“ Intercreditor Agreement ” shall mean the Intercreditor Agreement dated the date hereof, between the Administrative Agent and Wilmington Trust Company, as collateral agent for the holders of the “Obligations” as defined in the Term Loan Agreement.

“ Interest Election Request ” shall mean a request by the Borrowers to convert or continue a Borrowing in accordance with Section 2.09 .

“ Interest Expense ” shall mean, with reference to any period, the interest expense of the Borrowers and their Subsidiaries calculated on a consolidated basis in conformity with GAAP for such period.

“ Interest Payment Date ” shall mean (i) as to any Eurodollar Loan, the last day of each applicable Interest Period, and, in the case of any Interest Period longer than three months, on each successive date three months after the first day of such Interest Period and (ii) as to all ABR Loans, the last calendar day of each month in arrears and the date on which any ABR Loans are refinanced with Eurodollar Loans pursuant to Section 2.09 .

“ Interest Period ” shall mean, as to any Borrowing of Eurodollar Loans, the period commencing on the date of such Borrowing (including as a result of a refinancing of ABR Loans) or on the last day of the preceding Interest Period applicable to such Borrowing and ending on the numerically corresponding day (or if there is no corresponding day, the last day) in the calendar month that is one, two, three or six months thereafter, as the Borrowers’ Agent may elect in the related notice delivered pursuant to Sections 2.04 or 2.09 ; provided , however , that (i) if any Interest Period would end on a day which shall not be a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the immediately preceding Business Day, and (ii) no Interest Period shall end later than the Maturity Date.

“ Inventory ” shall mean “inventory” as defined in Article 9 of the Uniform Commercial Code as in effect from time to time in the State of New York, or when the context implies, the Uniform Commercial Code as in effect from time to time in any other applicable jurisdiction.

“ Investments ” shall have the meaning given such term in Section 6.07 .

“ Issuing Bank ” shall mean JPMorgan Chase, in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.07 . The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

“ Joinder Agreement ” shall have the meaning set forth in Section 5.13 .

“ JPMorgan Chase ” shall have the meaning set forth in the first paragraph of this Agreement.

“ JPMSI ” shall mean J.P. Morgan Securities Inc.

“ KACC ” shall mean Kaiser Aluminum & Chemical Corporation, a Delaware corporation.

“ KACL ” shall mean Kaiser Aluminum Canada Limited, an Ontario corporation.

“ KAFP ” shall have the meaning set forth in the first paragraph of this Agreement.

“ KAIC ” shall have the meaning set forth in the first paragraph of this Agreement.

“ KAII ” shall have the meaning set forth in the first paragraph of this Agreement.

“ Kaiser Bauxite ” shall mean Kaiser Bauxite Company, a Nevada corporation.

“ Kaiser Bellwood ” shall mean Kaiser Bellwood Corporation, a Delaware corporation.

“ Lender Affiliate ” shall mean, (a) with respect to any Lender, (i) an Affiliate of such Lender or (ii) any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in Lender loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender and (b) with respect to any Lender that is a fund which invests in Lender loans and similar extensions of credit, any other fund that invests in Lender loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

“ Lenders ” shall mean the Persons listed on the Commitment Schedule and any other Person that shall have become a party hereto as a Lender pursuant to an Assignment and Assumption or in connection with a Facility Increase, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

“ Letter of Credit ” shall mean any irrevocable letter of credit issued or deemed issued pursuant to Section 2.07 , which letter of credit shall be (i) a letter of credit, (ii) issued for purposes that are consistent with the ordinary course of business of any Borrower, or for such other purposes as are reasonably acceptable to the Administrative Agent, (iii) denominated in Dollars and (iv) otherwise in such form as may be reasonably approved from time to time by the Administrative Agent and the applicable Issuing Bank.

“ Letter of Credit Account ” shall mean the account established by the Borrowers under the sole and exclusive control of the Administrative Agent maintained at the office of the Administrative Agent at 270 Park Avenue, New York, New York 10017 designated as the “Kaiser Letter of Credit Account” that shall be used solely for the purposes set forth in Section 2.07(j) .

“ Letter of Credit Disbursement ” shall mean a payment made by the Issuing Bank pursuant to a Letter of Credit.

“ Letter of Credit Exposure ” shall mean, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time and (b) the aggregate amount of all Letter of Credit Disbursements that have not yet been reimbursed by or on behalf of the Borrowers at such time. The Letter of Credit Exposure of any Lender at any time shall be its Commitment Percentage of the total Letter of Credit Exposure at such time.

“ Letter of Credit Fees ” shall mean the fees payable in respect of Letters of Credit pursuant to Section 2.13 .

“ Letter of Credit Shortfall Amount ” shall mean an amount equal to the difference of (x) the amount of Letter of Credit Exposure at such time, less (y) the amount on deposit in the

Letter of Credit Account at such time which is free and clear of all rights and claims of third parties and has not been applied against the Obligations.

“ LIBO Rate ” shall mean, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Page 3750 of the Dow Jones Market Service (or on any successor page or any successor to such service or any substitute page or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits (for delivery on the first day of such period) with a term equivalent to such Interest Period. In the event that such rate is not available at such time for any reason, then the “ LIBO Rate ” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of comparable size and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period.

“ Lien ” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest of any kind whatsoever in, on or of such asset; (b) the interest of a vendor or a lessor under any conditional sale agreement, Capital Lease or title retention agreement (or any financing having substantially the same economic effect as any of the foregoing) relating to such asset; and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“ Loan ” shall mean any loan or advance made by the Lenders pursuant to this Agreement including, without limitation, Revolving Loans, unreimbursed Letter of Credit Disbursements, Swingline Loans and Protective Advances.

“ Loan Documents ” shall mean this Agreement, the Letters of Credit, the Security and Pledge Agreement, the Mortgages, the Intercreditor Agreement and any other instrument or agreement executed and delivered to the Administrative Agent or any Lender in connection herewith (including, all other pledges, powers of attorney, consents, assignments, contracts, notices and letter of credit agreements, whether heretofore, now or hereafter executed by or on behalf of any Borrower, or any Responsible Officer of any Borrower, and delivered to the Administrative Agent or any Lender in connection with the Agreement or the transactions contemplated thereby). Any reference in the Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to the Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

“ Material Adverse Effect ” shall mean a material adverse effect on (a) the business, assets, operations, prospects or financial condition of the Borrowers taken as a whole, (b) the ability of the Borrowers taken as a whole to perform any obligations under the Loan Documents, (c) the Collateral, or the Administrative Agent’s Liens (on behalf of itself and the Lenders) on

the Collateral or the priority of such Liens, or (d) the rights of or benefits available to the Administrative Agent or the Lenders hereunder or under any other Loan Document.

“ Material Indebtedness ” shall mean any Indebtedness (other than the Loans and Letters of Credit) of any one or more of the Borrowers and the Subsidiaries of any Borrower in an aggregate principal amount exceeding $20,000,000. For purposes of determining Material Indebtedness, the “obligations” of any Borrower or Subsidiary of any Borrower in respect of any Swap Agreement at any time shall be the Net Mark-to-Market Exposure that such Borrower or Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

“ Maturity Date ” shall mean July 6, 2011.

“ McNeil Appeal ” shall mean the appeal of the District Court Order filed by Duncan J. McNeil and pending before the Third Circuit Court of Appeals.

“ Mortgage ” shall mean any mortgage, deed of trust or other agreement which conveys or evidences a Lien in favor of the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, on real Property of a Borrower, including any amendment, modification or supplement thereto.

“ Multiemployer Plan ” shall mean a “ multiemployer plan ” as defined in Section 4001(a)(3) of ERISA, which is maintained or contributed to by (or to which there is an obligation to contribute of) any Borrower or a Subsidiary of any Borrower or an ERISA Affiliate, and each such plan for the five-year period immediately following the latest date on which any Borrower or a Subsidiary of any Borrower or an ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan.

“ Multiple Employer Plan ” shall mean a Single Employer Plan, which (i) is maintained for employees of any Borrower or an ERISA Affiliate and at least one person (as defined in Section 3(9) of ERISA) other than any Borrower and its ERISA Affiliates or (ii) was so maintained and in respect of which any Borrower or an ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such Plan has been or were to be terminated.

“ National Priorities List ” shall mean the list established pursuant to Section 105 of CERCLA, as amended, modified, supplemented, or replaced from time to time.

“ Net Capital Expenditures ” shall mean, with respect to any period of determination, the total Capital Expenditures for such period minus that portion of such Capital Expenditures that are financed with Indebtedness described in Section 6.03(ii) or 6.03(xiv) .

“ Net Income ” shall mean, with reference to any period, the net income (or loss) of the Parent and its Subsidiaries (other than any Excluded Subsidiary and its Subsidiaries) calculated on a consolidated basis for such period.

transactions as of the date of determination (assuming the Swap Agreement transactions were to be terminated as of that date), and “unrealized profits” means the fair market value of the gain to such Person of replacing such Swap Agreement transactions as of the date of determination (assuming such Swap Agreement transactions were to be terminated as of that date).

“ Net Orderly Liquidation Value ” shall mean, with respect to Inventory or Equipment of any Person, the orderly liquidation value thereof as determined in the most recent appraisal received by the Administrative Agent in accordance with the terms hereof, which appraisal shall be done in a manner acceptable to the Administrative Agent by an appraiser acceptable to the Administrative Agent, net of all costs of liquidation thereof.

“ Net Proceeds ” shall mean, if in connection with (a) an asset disposition, cash proceeds received by any Borrower net of (i) commissions, attorneys’ fees, accountants’ fees, investment banking fees and other reasonable and customary transaction costs, fees and expenses properly attributable to such transaction and payable by such Borrower in connection therewith (in each case, paid to non-Affiliates of such Borrower); (ii) taxes actually payable in respect thereof and reasonable estimates of taxes actually payable with respect to such transaction in the tax year of such transaction or in the following tax year; (iii) amounts payable to holders of senior Liens on such asset (to the extent such Liens constitute Permitted Liens or other Liens permitted under Section 6.01 hereunder), if any; (iv) an appropriate reserve for income taxes in accordance with GAAP established in connection therewith; and (v) amounts escrowed or reserved against indemnification, obligations or purchase price adjustments; provided , however , that Net Proceeds shall not include any such amounts so received by such Borrower in respect of any asset disposition made in any Fiscal Year until the aggregate amount of cash received by all Borrowers in respect of asset dispositions during such Fiscal Year exceeds $2,500,000 (excluding cash received in connection with any Excluded Asset Disposition), in which case Net Proceeds shall constitute solely such amounts in excess thereof; or (b) the issuance or incurrence of Indebtedness, cash proceeds net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith; or (c) an equity issuance, cash proceeds net of underwriting discounts and commissions and other reasonable costs paid to non-Affiliates in connection therewith, provided , however , that Net Proceeds shall not include any cash received in connection with the exercise of stock options granted to employees or directors of any Borrower or any of its Subsidiaries; or (d) Extraordinary Receipts received by any Borrower, the amount of cash proceeds received (directly or indirectly) from time to time by or on behalf of such Borrower or any of its Subsidiaries after deducting therefrom only (i) expenses related thereto incurred by such Person or such Subsidiary in connection therewith; (ii) transfer taxes paid by such Person or such Subsidiary in connection therewith; (iii) net income taxes to be paid in connection therewith (after taking into account any tax credits or deductions and any tax sharing arrangements); and (iv) that portion of the cash proceeds received which the applicable Borrower is legally obligated pursuant to any agreement binding on the applicable Borrower entered into prior to the date hereof to pay to another Person, provided , however , that Net Proceeds shall not include any such amounts so received by such Borrower in respect of any Extraordinary Receipt in any Fiscal Year until the aggregate amount of cash received by all Borrowers in respect of Extraordinary Receipts during such Fiscal Year exceeds $2,500,000, in which case Net Proceeds shall constitute solely such amounts in excess thereof.

“ Net Recovery Percentage ” shall mean the fraction, expressed as a percentage, (a) the numerator of which is the amount estimated to be recoverable in respect of the Net Orderly Liquidation Value of Eligible Inventory and (b) the denominator of which is the aggregate original cost of the Eligible Inventory (it being understood that all purchase price and inventory and manufacturing variances are considered eligible) subject to such appraisal.

“ Non-Consenting Lender ” shall have the meaning specified in Section 9.02(e) .

“ Notice of Facility Increase ” shall have the meaning specified in Section 2.22 .

“ Obligations ” shall mean all unpaid principal of and accrued and unpaid interest on the Loans, all Letter of Credit Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Borrowers to the Lenders or to any Lender, the Administrative Agent, the Issuing Bank or any Indemnitee arising under the Loan Documents. Nothing in this definition of Obligations shall permit the Borrowers or their Significant Subsidiaries to incur or permit to exist any Indebtedness not otherwise permitted pursuant to the terms hereof. The Obligations include interest (including interest that accrues or that would accrue but for the filing of a bankruptcy case by any Borrower, whether or not such interest would be an allowable claim under any applicable bankruptcy or other similar proceeding) and other obligations accruing or arising after commencement of any case under any bankruptcy or similar laws by or against any Borrower (or that would accrue or arise but for the commencement of any such case).

“ Off-Balance Sheet Liability ” shall mean, with respect to any Person, (a) any repurchase obligation or liability for the principal amount thereof of such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation under any sale and leaseback transaction which is not a Capital Lease Obligation and under which such Person retains ownership of the Property so leased for Federal income tax purposes, other than any lease under which such Person is the lessor, or (c) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheets of such Person, but excluding from this clause (c) operating leases and Capital Lease Obligations.

“ Offerees ” shall have the meaning specified in Section 2.22 .

“ Other Taxes ” shall mean any and all present or future stamp or documentary Taxes or any other excise or property Taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document.

“ Parent ” shall have the meaning specified in the preamble to this Agreement.

“ PBGC ” shall mean the Pension Benefit Guaranty Corporation, or any successor agency or entity performing substantially the same functions.

“ Permitted Acquisition ” shall mean any acquisition by any Borrower in a transaction that satisfies each of the following requirements:

(a) such acquisition is not a hostile or contested acquisition;

(b) the business acquired in connection with such acquisition (i) is predominantly located in the U.S. and the parent company and its material subsidiaries are organized under U.S. and applicable state laws, and (ii) is not engaged, directly or indirectly, in any material line of business other than the businesses in which the Borrowers are engaged on the Closing Date and any business activities that are substantially similar, related, or incidental thereto;

(c) both before and after giving effect to such acquisition and the Loans (if any) requested to be made in connection therewith, each of the representations and warranties in the Loan Documents is true and correct in all material respects (except (i) any such representation or warranty which relates to a specified prior date and (ii) to the extent the Lenders have been notified in writing by the Borrowers’ Agent that any representation or warranty is not correct and the Required Lenders have explicitly waived in writing compliance with such representation or warranty);

(d) as soon as available, but not less than thirty (30) days prior to such acquisition, the applicable Borrower has provided the Administrative Agent (i) notice of such acquisition and (ii) a copy of all business and financial information reasonably requested by the Administrative Agent including pro forma financial statements, statements of cash flow, and Availability projections;

(e) if the Accounts and Inventory acquired in connection with such Acquisition are proposed to be included in the determination of the Borrowing Base, the Administrative Agent shall have conducted an audit and field examination of such Accounts and Inventory to its satisfaction prior to such inclusion;

(f) the sum of the cash consideration paid in connection with such acquisition plus the amount of Disqualified Indebtedness assumed, acquired or issued in connection with such acquisition does not exceed $50,000,000 in the aggregate for all acquisitions made during the term of this Agreement (excluding, however, all acquisitions to which this clause (f) does not apply by operation of the proviso below); provided that this clause (f) shall not apply if, after giving effect to the completion of such acquisition, Availability immediately after the completion of such acquisition will not be less than $150,000,000 on a pro forma basis which pro forma presentation shall treat all cash consideration given, and the amount of Disqualified Indebtedness assumed, acquired or issued, in connection with such acquisition as having been paid in cash at the time of making such acquisition; provided , further , that if a Facility Increase occurs, such $150,000,000 minimum pro forma Availability shall be increased on the Facility Increase Effective Date by 66.67% of the actual Facility Increase Amount occurring on such date, such that, in the event of a Facility Increase of $75,000,000, such minimum pro forma Availability shall be $200,000,000;

(g) if such acquisition is an acquisition of the Equity Interests of a Person or a merger or consolidation with another Person, the acquisition, merger or consolidation is structured so that the Person so acquired, merged or consolidated shall become a wholly-owned

Subsidiary of the applicable Borrower and, in accordance with Section 5.13(a) , a Borrower pursuant to the terms of this Agreement;

(h) if such acquisition is an acquisition of assets, the acquisition is structured so that a Borrower shall acquire such assets;

(i) if such acquisition is an acquisition of Equity Interests, such acquisition will not result in any violation of Regulation U;

(j) no Borrower shall, as a result of or in connection with any such acquisition, assume or incur any direct or contingent liabilities (whether relating to environmental, tax, litigation, or other matters) that at the time of such acquisition could be reasonably expected to have a Material Adverse Effect;

(k) in connection with an acquisition of the Equity Interests of any Person, all Liens on property of such Person (other than liens in favor of the Administrative Agent securing the Secured Obligations and any Liens that would constitute Liens permitted under Section 6.01 ) shall be terminated unless the Lenders in their sole discretion consent otherwise, and in connection with an acquisition of the assets of any Person, all Liens on such assets (other than liens in favor of the Administrative Agent securing the Secured Obligations and any Liens that would constitute Liens permitted under Section 6.01 ) shall be terminated;

(l) if the applicable acquisition is to be consummated during a Dominion Trigger Event, the Fixed Charge Coverage Ratio shall be greater than 1.00 to 1.00 for the most recently completed Fiscal Quarter;

(m) the Borrowers’ Agent shall certify (and provide the Lenders with a pro forma calculation in form and substance reasonably satisfactory to the Lenders) to the Lenders that, after giving effect to the completion of such acquisition, Availability immediately after the completion of such acquisition will not be less than $75,000,000 on a pro forma basis which pro forma presentation shall treat all cash consideration given, and the amount of Disqualified Indebtedness assumed, acquired or issued, in connection with such acquisition as having been paid in cash at the time of making such acquisition; provided , further , that if a Facility Increase occurs, such $75,000,000 minimum pro forma Availability shall be increased on the Facility Increase Effective Date by 33.33% of the actual Facility Increase Amount occurring on such date, such that, in the event of a Facility Increase of $75,000,000, such minimum pro forma Availability shall be $100,000,000; and

(n) no Default exists or would result therefrom.

“ Permitted Commodity Swap Agreement ” shall mean any Commodity Swap Agreement that (i) involves or is settled with respect to electricity, natural gas, alumina, bauxite or other mineral or metal used in the business of the Borrowers or their Significant Subsidiaries, and (ii) is entered into in the ordinary course of business to hedge against fluctuations in the price of electricity, natural gas, alumina, bauxite or other minerals or metals used in the business of the Borrowers or their Significant Subsidiaries and not for speculative purposes.

“ Permitted Discretion ” shall mean a determination by the Administrative Agent made in good faith and in the exercise of reasonable (from the perspective of a secured asset based lender) business judgment.

“ Permitted Investments ” shall mean:

(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within twelve months from the date of acquisition thereof;

(b) without limiting the provisions of clause (d) below, investments in commercial paper maturing within six months from the date of acquisition thereof and having, at such date of acquisition, a rating of at least “A-2” or the equivalent thereof from Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. or of at least “P-2” or the equivalent thereof from Moody’s Investors Service, Inc.;

(c) investments in certificates of deposit, bankers acceptances and time deposits (including Eurodollar time deposits) maturing within six months from the date of acquisition thereof issued or guaranteed by or placed with (i) any domestic office of the Administrative Agent or the bank with whom the Borrowers maintain their cash management system; provided that if such bank is not a Lender hereunder, such bank shall have entered into an agreement with the Administrative Agent pursuant to which such bank shall have waived all rights of setoff and confirmed that such bank does not have, nor shall it claim, a security interest therein or (ii) any domestic office of any other commercial bank of recognized standing organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $250,000,000 and is the principal Banking Subsidiary of a bank holding company having a long-term unsecured debt rating of at least “A-2” or the equivalent thereof from Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. or at least “P-2” or the equivalent thereof from Moody’s Investors Service, Inc.;

(d) investments in commercial paper issued by any Person organized under the laws of any state of the United States and rated at least “P-1” (or the then equivalent grade) by Moody’s Investors Service, Inc. or at least “A-1” (or the then equivalent grade) by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., in each case, with maturities of not more than 360 days from the date of acquisition thereof;

(e) investments in repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (a) above entered into with any office of a bank or trust company meeting the qualifications specified in clause (c) above; and

(f) investments in money market funds substantially all the assets of which are comprised of securities of the types described in clauses (a) through (e) above.

warehousemen, workmen, repairmen, vendors, consignors, mechanics, materialmen and other Liens (other than Environmental Liens and any Lien imposed under ERISA) imposed by law and created in the ordinary course of business; (iii) Liens (other than any Lien imposed under ERISA) incurred or deposits made in the ordinary course of business (including, without limitation, surety bonds and appeal bonds) in connection with workers’ compensation, unemployment insurance and other types of social security benefits or governmental insurance or to secure the performance of tenders, bids, leases, contracts (other than for the repayment of Indebtedness), statutory obligations and other similar obligations or arising as a result of progress payments under government contracts; (iv) easements (including, without limitation, reciprocal easement agreements and utility agreements), rights-of-way, covenants, consents, reservations, mineral leases, encroachments, variations and zoning laws, ordinances, other restrictions and rights reserved to or vested in any municipality or government or proper authority to control or regulate any Property of the Parent or its Subsidiaries, charges or encumbrances (whether or not recorded) and interest of ground lessors, minor defects and irregularities in the title to any Property, which do not interfere materially with the ordinary conduct of the business of the Borrowers, and which do not materially detract from the value of the property to which they attach or materially impair the use thereof to the Borrowers; (v) purchase money Liens (including capital leases) upon or in any property acquired or held in the ordinary course of business to secure the purchase price of such property solely for the purpose of financing the acquisition of such property to the extent such purchase money Liens secure Indebtedness incurred in accordance with Section 6.03(ii) ; (vi) pledges or deposits in the ordinary course to secure leases entered into in the ordinary course of business; (vii) pledges and deposits of cash and Permitted Investments with a commodity broker or dealer for the purpose of margining or securing the obligations of any Borrower or Significant Subsidiary under a Permitted Commodity Swap Agreement; (viii) any interest of a consignor in goods held by any Borrower or Significant Subsidiary on consignment provided that such goods are held on consignment in the ordinary course of business consistent with past practices; and (ix) extensions, renewals, or replacements of any Lien referred to in clauses (i) through (viii) above; provided that the principal amount of the obligation secured thereby is not increased and that any such extension, renewal or replacement is limited to the property encumbered thereby.

“ Person ” shall mean any natural person, corporation, and division of a corporation, limited liability company, partnership, trust, joint venture, association, company, estate, unincorporated organization, Governmental Authority or other entity.

“ PI Trust ” shall have the meaning given to such term in the Reorganization Plan.

“ PI Trust Assets ” shall have the meaning given to such term in the Reorganization Plan.

“ Plan ” shall mean a Single Employer Plan or a Multiple Employer Plan.

“ Prime Rate ” shall mean the rate of interest per annum publicly announced from time to time by JPMorgan Chase as its prime rate; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“ Projections ” shall have the meaning assigned such to term in Section 5.01(e) .

“ Property ” shall mean any interest in any kind of property or asset, whether real, personal or mixed, tangible or intangible.

“ Protective Advance ” shall have the meaning assigned to such term in Section 2.05 .

“ Quarterly Available Credit ” means, with respect to any Fiscal Quarter, the average daily Availability for such Fiscal Quarter, provided that with respect to the Fiscal Quarter during which the Closing Date occurs, any day prior to the Closing Date shall not be included in such calculation.

“ Real Property Percentage ” shall mean, as of any date, the percentage equal to one hundred percent (100%) minus the percentage obtained by dividing the number of full calendar months elapsed since the Closing Date by one hundred twenty (120).

“ Register ” shall have the meaning set forth in Section 9.04 .

“ Related Parties ” shall mean, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

“ Release ” shall mean any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Materials into the indoor or outdoor environment (including, without limitation, the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Materials), or into or out of any property, including the movement of any Hazardous Material through the air, soil, surface water, groundwater or property.

“ Reliance Account Debtor ” shall mean each Account Debtor that is listed on Schedule 1.01(d) hereto.

“ Reorganization Plan ” shall mean a plan of reorganization attached as Exhibit A-1 hereto.

“ Reorganized KACC ” shall mean Kaiser Aluminum & Chemical Corporation, LLC, a Delaware limited liability company.

“ Report ” shall mean any report prepared by the Administrative Agent or another Person showing the results of appraisals, field examinations or audits pertaining to the assets of any Borrower from information furnished by or on behalf of the Borrowers, which Reports may be distributed to the Lenders by the Administrative Agent.

“ Required Lenders ” shall mean, at any time, Lenders having Revolving Credit Exposure and unused Commitments representing at least 51% of the sum of the Aggregate Credit Exposure and Unused Total Commitments at such time.

“ Requirement of Law ” shall mean, as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and

any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“ Reserves ” shall mean, collectively, any and all reserves which the Administrative Agent deems necessary, in its Permitted Discretion, to maintain (including, without limitation, Banking Services Reserves, Environmental Compliance Reserves, reserves for rent at locations leased by any Borrower and for consignee’s, warehousemen’s and bailee’s charges, reserves for dilution of Accounts, reserves for Inventory shrinkage, reserves for customs charges and shipping charges related to any Inventory in transit, reserves for Swap Obligations, reserves for contingent liabilities of any Borrower, reserves for uninsured losses of any Borrower, reserves for uninsured, underinsured, unindemnified or underindemnified liabilities or potential liabilities with respect to any litigation and reserves for taxes, fees, assessments, and other governmental charges) with respect to the Collateral or any Borrower.

“ Responsible Officer ” shall mean, with respect to any Person, the president, chief executive officer, chief financial officer, treasurer or controller of such Person, or any attorney in the office of such Person’s general counsel.

“ Restructuring Transactions ” shall mean the transactions scheduled to occur on or prior to the effective date of the Reorganization Plan and which are listed on Schedule 1.01(c) .

“ Revolving Credit Exposure ” shall mean, with respect to any Lender at any time, the sum of (a) the outstanding principal amount of such Lender’s Revolving Loans and its Letter of Credit Exposure; plus (b) an amount equal to its Commitment Percentage of the aggregate principal amount of Swingline Loans at such time (without duplication of amounts transferred by such Lender in respect of a Settlement pursuant to Section 2.06(c) to the extent included in clause (a) above), plus (c) an amount equal to its Commitment Percentage of the aggregate principal amount of Protective Advances outstanding at such time.

“ Revolving Loan ” shall mean any Loan made pursuant to Section 2.02 .

“ SEC ” shall mean the Securities and Exchange Commission.

“ Secured Obligations ” shall mean all Obligations, together with all (i) Banking Services Obligations and (ii) Swap Obligations owing to one or more Lenders or their respective Affiliates; provided that prior to or within 10 Business Days (or longer if the Administrative Agent otherwise agrees) following the time that any transaction relating to such Banking Services Obligation or Swap Obligation, as applicable is executed, the Lender party thereto (other than JPMorgan Chase) shall have delivered written notice to the Administrative Agent that such a transaction has been entered into and that it constitutes a Secured Obligation entitled to the benefits of the Collateral Documents.

“ Secured Party ” shall mean the Administrative Agent, the Issuing Bank, each Lender and each other Person that is from time to time the holder of a Secured Obligation.

“ Security and Pledge Agreement ” shall have the meaning set forth in Section 4.01(d) .

“ Settlement ” shall have the meaning assigned to such term in Section 2.06(c) .

“ Settlement Agreement ” shall mean the agreement reached with the PBGC and approved by the Bankruptcy Court on January 24, 2005, as amended (such amendment approved by the Bankruptcy Court on October 26, 2005).

“ Settlement Date ” shall have the meaning assigned to such term in Section 2.06(c) .

“ Significant Subsidiary ” shall mean (other than an Excluded Subsidiary) each Subsidiary of the Parent that

(a) is listed on Schedule 3.17 ;

(b) accounted for at least 5% of consolidated revenues of the Parent and its Subsidiaries from sales to third parties for the four Fiscal Quarters of the Parent ending on the last day of the last Fiscal Quarter of the Parent immediately preceding the date as of which any such determination is made; or

(c) has assets (other than assets which are eliminated in consolidation) which represent at least 5% of the consolidated assets of the Parent and its Subsidiaries as of the last day of the last Fiscal Quarter of the Parent immediately preceding the date as of which any such determination is made,

all of which, with respect to clauses (b) and (c) , shall be as included in the consolidated financial statements of the Parent for the period, or as of the date, in question.

“ Single Employer Plan ” shall mean a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (i) is maintained for employees of any Borrower or an ERISA Affiliate or (ii) was so maintained and in respect of which any Borrower or an ERISA Affiliate could have liability under Title IV of ERISA in the event such Plan has been or were to be terminated.

“ Statutory Reserve Rate ” shall mean a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal as in effect on any date of determination and established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“ Subsidiary ” shall mean, with respect to any Person (herein referred to as the “parent”), any corporation, association or other business entity (whether now existing or

hereafter organized) of which at least a majority of the securities or other ownership interests having ordinary voting power for the election of directors is, at the time as of which any determination is being made, owned or controlled by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Under no circumstances will an Excluded Subsidiary be, or be deemed to be, a Significant Subsidiary or a Subsidiary hereunder.

“ Supporting Letter of Credit ” shall mean a standby letter of credit, in form and substance satisfactory to the Administrative Agent, issued by an issuer satisfactory to the Administrative Agent, in a stated amount equal to 105% of the Letter of Credit Shortfall Amount.

“ Swap Agreement ” shall mean any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of any Borrower or any of their Subsidiaries shall be a Swap Agreement.

“ Swap Obligations ” shall mean, with respect to any Person, any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Swap Agreements, and (b) any and all cancellations, buybacks, reversals, terminations or assignments of any Swap Agreement transaction.

“ Swingline Lender ” shall mean JPMorgan Chase, in its capacity as lender of Swingline Loans hereunder.

“ Swingline Loan ” shall have the meaning assigned to such term in Section 2.06(a) .

“ Tax ” or “ Taxes ” shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

“ Tax Related Person ” shall mean any Person (including, without limitation, a beneficial owner of an interest in a pass-through entity) whose income is realized through or determined by reference to the Administrative Agent, Issuing Bank or any Participant or any Tax Related Person of any of the foregoing.

“ Terminated Plans ” shall mean (i) the Kaiser Aluminum Salaried Employees Retirement Plan, terminated by the PBGC effective December 17, 2003; (ii) the Kaiser Aluminum Pension Plan, terminated by the PBGC effective April 30, 2004; and (iii) the Kaiser Aluminum Inactive Pension Plan, terminated by the PBGC effective June 30, 2004.

“ Termination Date ” shall mean the earlier to occur of (i) the Maturity Date and (ii) the acceleration of the Loans and the termination of the Total Commitment in accordance with the terms hereof.

“ Termination Event ” shall mean, except with respect to the Terminated Plans or Plans actually terminated in accordance with the terms of the Settlement Agreement, (i) with respect to any Plan sponsored or contributed to by the Borrowers or any ERISA Affiliate, a “reportable event”, as such term is described in Section 4043(c) of ERISA (other than a “reportable event” as to which the 30-day notice is waived) or an event described in Section 4068 of ERISA and excluding events which would not be reasonably likely (as reasonably determined by the Agent) to have a material adverse effect on the financial condition, operations, business, properties or assets of the Borrowers taken as a whole; (ii) any reportable event or other event related to the withdrawal of the Borrowers or any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it was a “substantial employer,” as such term is defined in Section 4001(a)(2) of ERISA, (iii) the incurrence of liability by the Borrowers or any ERISA Affiliate under Section 4064 of ERISA upon the termination of a Multiple Employer Plan; (iv) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (v) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (vi) the incurrence by the Borrowers or any of their ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan (other than a Terminated Plan); (vii) the receipt by the Borrowers or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan (other than a Terminated Plan); (viii) the incurrence by the Borrowers or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan (other than a Terminated Plan) or Multiemployer Plan; or (ix) the receipt by the Borrowers or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrowers or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

“ Term Loan Agreement ” shall mean that Term Loan and Guaranty Agreement dated the date hereof among KAFP, as Borrower, Parent, KAIC and KAII, as Guarantors, the “Lenders” (as defined therein) party thereto, JPMorgan Chase, as administrative agent, and Wilmington Trust Company, as collateral agent.

“ Total Commitment ” shall mean, at any time, the sum of the Commitments at such time.

“ Trochus ” shall mean Trochus Insurance Company, Ltd., a Bermuda entity.

“ Type ” when used in respect of any Loan or Borrowing shall refer to the Rate of interest by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined. For purposes hereof, “Rate” shall mean the Adjusted LIBO Rate or the Alternate Base Rate, as applicable.

“ UCC ” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.

“ United States ” and “ U.S. ” shall mean the United States of America.

“ Unliquidated Obligations ” shall mean, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (i) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (ii) any other obligation (including any guarantee) that is contingent in nature at such time; or (iii) an obligation to provide collateral to secure any of the foregoing types of obligations.

“ Unused Total Commitment ” shall mean, with respect to all Lenders, at any time, (i) the Total Commitment less (ii) the sum of (x) the aggregate outstanding principal amount of all Loans and (y) the aggregate Letter of Credit Exposure.

“ VEBA Trusts ” shall mean the Union VEBA Trust (as defined in the Reorganization Plan) and the Retired Salaried Employees VEBA Trust (as defined in the Reorganization Plan).

“ Withdrawal Liability ” shall have the meaning given such term under Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02 Classifications of Loans and Borrowings; Terms Generally . For purposes of this Agreement, Loans may be classified and referred to by Class ( e.g. , a “ Revolving Loan ”) or by Type ( e.g. , a “ Eurodollar Loan ”) or by Class and Type ( e.g. , a “ Eurodollar Revolving Loan ”). Borrowings also may be classified and referred to by Class ( e.g. , a “ Revolving Borrowing ”) or by Type ( e.g. , a “ Eurodollar Borrowing ”) or by Class and Type ( e.g. , a “ Eurodollar Revolving Borrowing ”). The definitions in Section 1.01 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” All references herein to Sections, Exhibits and Schedules shall be deemed references to Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. The words “asset” and “property” shall be construed to have the same meaning and effect and refer to any and all tangible and intangible assets and properties. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that , if the Borrowers’ Agent notifies the Administrative Agent that the Borrowers request an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrowers’ Agent that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Terms that are defined in the Uniform Commercial Code as in effect in the State of New York from time to time shall have the same meaning herein unless otherwise defined herein.

SECTION 1.03 The Parent As Agent For Borrowers . Each Borrower hereby irrevocably appoints the Parent as the borrowing agent and attorney-in-fact for all Borrowers (the “ Borrowers’ Agent ”) which appointment shall remain in full force and effect unless and until the Administrative Agent shall have received prior written notice signed by each Borrower that such appointment has been revoked and that another Borrower has been appointed the Borrowers’ Agent. Each Borrower hereby irrevocably appoints and authorizes the Borrowers’ Agent (i) to provide the Administrative Agent with all notices with respect to Borrowings and Letters of Credit obtained for the benefit of any Borrower and all other notices and instructions under this Agreement and (ii) to take such action as the Borrowers’ Agent deems appropriate on its behalf to obtain Borrowings and Letters of Credit and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement. It is understood that the handling of the Funding Account, Cash Management Account, Concentration Account and Collateral of Borrowers in a combined fashion, as more fully set forth herein, is done solely as an accommodation to Borrowers in order to utilize the collective borrowing powers of Borrowers in the most efficient and economical manner and at their request, and that no Lender shall incur any liability to any Borrower as a result hereof.

SECTION 1.04 The Term “Borrower” or “Borrowers” . Unless otherwise specifically provided herein, all references to “Borrower” or “Borrowers” herein shall refer to and include each Borrower separately and all representations contained herein shall be deemed to be separately made by each of them, and each of the covenants, agreements and obligations set forth herein shall be deemed to be the joint and several covenants, agreements and obligations of them. Any notice, request, consent, report or other information or agreement delivered to the Administrative Agent or any other Lender by any Borrower shall be deemed to be ratified by, consented to and also delivered by each other Borrower. Unless otherwise specified in this Agreement, the parties hereto anticipate that any notice, request, consent, report or other information or agreement to be delivered in connection with this Agreement by Borrowers to the Administrative Agent will be executed by the Borrowers’ Agent, on behalf of Borrowers, and that any such notice, request, consent, report or other information or agreement delivered to the Administrative Agent and executed by the Borrowers’ Agent shall be deemed to be executed by the Borrowers’ Agent on behalf of all the Borrowers. In addition, unless otherwise specified in this Agreement, the parties hereto anticipate that any advances made hereunder by any Lender to Borrowers shall be disbursed directly to the Borrowers’ Agent.

SECTION 1.05 Secured Obligations Not Affected . The Secured Obligations of the Borrowers shall not be affected by (i) the failure of the Administrative Agent or a Lender to assert any claim or demand or to enforce any right or remedy against any Borrower under the provisions of this Agreement or any other Loan Document or otherwise; (ii) any extension or renewal of any provision hereof or thereof; (iii) any rescission, waiver, compromise, acceleration, amendment or modification of any of the terms or provisions of any of the Loan Documents; (iv) the release, exchange, waiver or foreclosure of any security held by the Administrative Agent for the Secured Obligations or any of them; (v) the failure of the Administrative Agent or a Lender to exercise any right or remedy against any other Borrower; (vi) the release or substitution of any Borrower; or (vii) any other circumstance that might otherwise constitute a discharge of a surety, other than, in each case, the payment in full in cash of the Secured Obligations.

ARTICLE 2. AMOUNT AND TERMS OF CREDIT

SECTION 2.01 The Facility . Subject to the terms and conditions set forth herein, each Lender agrees to make Loans to the Borrowers from time to time during the Availability Period in an aggregate principal amount that will not result in (i) such Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment or (ii) the Aggregate Credit Exposures exceeding the Total Commitment. The Issuing Bank will issue Letters of Credit hereunder on the terms and conditions set forth below. The Facility shall be composed of Revolving Loans, Swingline Loans, Protective Advances and Letters of Credit as set forth below.

SECTION 2.02 Revolving Loans . Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving Loans to the Borrowers from time to time during the Availability Period in an aggregate principal amount that will not result in (i) such Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment or (ii) the Aggregate Credit Exposure exceeding the lesser of (x) the sum of the Total Commitments or (y) the Borrowing Base, subject to the Administrative Agent’s authority, in its sole discretion, to make Protective Advances pursuant to the terms of Section 2.05 . Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Revolving Loans.

SECTION 2.03 Loans and Borrowings .

(a) Each Revolving Loan shall be made as part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in accordance with their respective Commitments. Any Protective Advance shall be made in accordance with the procedures set forth in Section 2.05 . Subject to Section 2.04 and Section 2.15 , each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrowers’ Agent may request in accordance herewith. Each Swingline Loan shall be an ABR Loan. Subject to Section 2.15 , each Lender at its option may make a Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrowers to repay such Loan in accordance with the terms of this Agreement.

(b) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000. ABR Revolving Borrowings may be in any amount. Borrowings of more than one Type may be outstanding at the same time; provided that there shall not at any time be more than a total of ten (10) Eurodollar Borrowings outstanding.

(c) Notwithstanding any other provision of this Agreement, the Borrowers shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

SECTION 2.04 Requests for Borrowings . To request a Borrowing, the Borrowers’ Agent shall notify the Administrative Agent of such request by telephone, fax, e-mail or written Borrowing Request (a) in the case of a Eurodollar Borrowing, not later than 12:00 noon, Central time, three Business Days before the date of the proposed Borrowing or (b) in the

case of an ABR Borrowing, not later than 12:00 p.m., Central time, on the date of the proposed Borrowing. Any such Borrowing Request shall be irrevocable and shall, if made in writing, by facsimile, or by e-mail, be signed by the Borrowers’ Agent or, if made by telephone, be confirmed promptly by hand delivery, e-mail or facsimile to the Administrative Agent of a written Borrowing Request and be signed by the Borrowers’ Agent. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.03 :

(i) the aggregate amount of the requested Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period.”

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrowers shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section , the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.05 Protective Advances .

(a) Subject to the limitations set forth below, the Administrative Agent is authorized by the Borrowers and the Lenders, from time to time after the occurrence and during the continuance of an Event of Default in the Administrative Agent’s sole discretion (but shall have absolutely no obligation to), to make Loans to the Borrowers, on behalf of all Lenders, which the Administrative Agent, in its Permitted Discretion, deems necessary or desirable (i) to preserve or protect the Collateral, or any portion thereof, (ii) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and other Secured Obligations, or (iii) to pay any other amount chargeable to or required to be paid by the Borrowers pursuant to the terms of this Agreement, including payments of principal, interest, Letter of Credit Disbursements, fees, premiums, reimbursable expenses and other sums payable under the Loan Documents (any of such Loans are herein referred to as “ Protective Advances ”); provided that no Protective Advance shall cause the Aggregate Credit Exposure to exceed the Total Commitment; provided further that the aggregate amount of Protective Advances outstanding at any time, which were made pursuant to clauses (i) , (ii) and (iii) above, shall not at any time exceed $10,000,000. Protective Advances may be made even if the conditions precedent set forth in Section 4.02 have not been satisfied. The Protective Advances shall be secured by the Liens in favor of the Administrative Agent in and to the Collateral and shall constitute Obligations hereunder. All Protective Advances shall be ABR Borrowings. The Administrative Agent’s authorization to

make Protective Advances may be revoked at any time by the Required Lenders. Any such revocation must be in writing and shall become effective prospectively upon the Administrative Agent’s receipt thereof. At any time that there is sufficient Availability and the conditions precedent set forth in Section 4.02 have been satisfied, the Administrative Agent may request the Lenders to make a Revolving Loan to repay a Protective Advance. At any other time the Administrative Agent may require the Lenders to fund their risk participations described in Section 2.05(b) .

(b) Upon the making of a Protective Advance by the Administrative Agent (whether before or after the occurrence of a Default), each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Administrative Agent without recourse or warranty, an undivided interest and participation in such Protective Advance in proportion to its Commitment Percentage.

SECTION 2.06 Swingline Loans .

(a) The Administrative Agent, the Swingline Lender and the Revolving Lenders agree that in order to facilitate the administration of this Agreement and the other Loan Documents, promptly after the Borrowers request an ABR Borrowing, the Swingline Lender may elect to have the terms of this Section 2.06(a) apply to such Borrowing Request by advancing, on behalf of the Lenders and in the amount requested, same day funds to the Borrowers on the applicable Borrowing date to the Funding Account (each such Loan made solely by the Swingline Lender pursuant to this Section 2.06(a) is referred to in this Agreement as a “ Swingline Loan ”), with settlement among them as to the Swingline Loans to take place on a periodic basis as set forth in Section 2.06(c) . Each Swingline Loan shall be subject to all the terms and conditions applicable to other ABR Loans funded by the Lenders, except that all payments thereon shall be payable to the Swingline Lender solely for its own account. In addition, the Borrowers hereby authorize the Swingline Lender to, and the Swingline Lender shall, subject to the terms and conditions set forth herein (but without any further written notice required), not later than 3:00 p.m., Central time, on each Business Day, make available to the Borrowers by means of a credit to the Funding Account, the proceeds of a Swingline Loan to the extent necessary to pay items to be drawn on any Cash Management Account that day (as determined based on notice from the Agent). The aggregate amount of Swingline Loans outstanding at any time shall not exceed $17,500,000. The Swingline Lender shall not make any Swingline Loan if the requested Swingline Loan exceeds Availability either before giving effect to the Swingline Loan or immediately after giving effect to such Swingline Loan. All Swingline Loans shall be ABR Borrowings.

(b) Upon the making of a Swingline Loan (whether before or after the occurrence of a Default and regardless of whether a Settlement has been requested with respect to such Swingline Loan), each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Swingline Lender or the Administrative Agent, as the case may be, without recourse or warranty, an undivided interest and participation in such Swingline Loan in proportion to its Commitment Percentage of the Commitment. The Swingline Lender or the Administrative Agent may, at any time, require the Lenders to fund their participations. From and after the date, if any, on which any Lender is required to fund its participation in any Swingline Loan purchased hereunder, the Administrative

Agent shall promptly distribute to such Lender, such Lender’s Commitment Percentage of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Loan.

(c) The Administrative Agent, on behalf of the Swingline Lender, shall request settlement (a “ Settlement ”) with the Lenders on at least a weekly basis on any date that the Administrative Agent elects, by notifying the Lenders of such requested Settlement by facsimile, telephone, or e-mail no later than 12:00 noon, Central time on the date of such requested Settlement (the “ Settlement Date ”). Each Lender (other than the Swingline Lender, in the case of the Swingline Loans) shall transfer the amount of such Lender’s Commitment Percentage of the outstanding principal amount of the applicable Loan with respect to which Settlement is requested to the Administrative Agent, to such account of the Administrative Agent as the Administrative Agent may designate, not later than 2:00 p.m., Central time, on such Settlement Date. Settlements may occur during the existence of a Default and whether or not the applicable conditions precedent set forth in Section 4.02 have then been satisfied. Such amounts transferred to the Administrative Agent shall be applied against the amounts of the Swingline Lender’s Swingline Loans and, together with Swingline Lender’s Commitment Percentage of such Swingline Loan, shall constitute Revolving Loans of such Lenders, respectively. If any such amount is not transferred to the Administrative Agent by any Lender on such Settlement Date, the Swingline Lender shall be entitled to recover such amount on demand from such Lender together with interest thereon as specified in Section 2.08 .

SECTION 2.07 Letters of Credit .

(a) General . Subject to the terms and conditions set forth herein, the Borrowers’ Agent may request the issuance of Letters of Credit for the account of any Borrower, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrowers’ Agent or any Borrower to, or entered into by any such Person with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions . To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrowers’ Agent shall hand deliver or facsimile (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent (prior to 1:00 p.m., Central time, at least three (3) Business Days (or such shorter period as may be agreed by the Borrowers’ Agent and the Issuing Bank) prior to the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section ), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the Borrowers’ Agent also shall submit a letter of credit application on the Issuing

Bank’s standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrowers shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the Letter of Credit Exposure shall not exceed $60,000,000, (ii) the total Revolving Credit Exposures shall not exceed the lesser of (x) the Total Commitments and (y) the Borrowing Base and (iii) such requested Letter of Credit is satisfactory to the Issuing Bank and the Administrative Agent.

(c) Expiration Date . Each Letter of Credit shall expire (the “ Expiration Date ”) at or prior to the close of business on the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension); provided that if the Expiration Date is a date which is on or after the 5th Business Day prior to the Maturity Date, then on or prior to the Maturity Date, the Borrowers shall cash collateralize the Obligations with respect to such Letter of Credit in accordance with Section 2.07(j)(ii) .

(d) Participations . By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Commitment Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Commitment Percentage of each Letter of Credit Disbursement made by the Issuing Bank and not reimbursed by the Borrowers on the date due as provided in paragraph (e) of this Section , or of any reimbursement payment required to be refunded to the Borrowers for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

(e) Reimbursement . If the Issuing Bank shall make any Letter of Credit Disbursement in respect of a Letter of Credit, the Borrowers shall reimburse such Letter of Credit Disbursement by paying to the Administrative Agent an amount equal to such Letter of Credit Disbursement not later than 3:00 p.m., Central time, on the date that such Letter of Credit Disbursement is made, if the Borrowers’ Agent shall have received notice of such Letter of Credit Disbursement prior to 1:00 p.m., Central time, on such date, or, if such notice has not been received by the Borrowers’ Agent prior to such time on such date, then not later than 1:00 p.m., Central time, on (i) the Business Day that the Borrowers’ Agent receives such notice, if such notice is received prior to 10:00 a.m., Central time, on the day of receipt, or (ii) the Business Day immediately following the day that the Borrowers’ Agent receives such notice, if such notice is not received prior to such time on the day of receipt. The Borrowers may, subject to the conditions of borrowing set forth herein, request in accordance with Sections 2.04 or 2.06 that such payment be financed with an ABR Borrowing or Swingline Loan in an equivalent amount. Unless the Borrowers otherwise specify, each such payment automatically will be

financed with a Swingline Loan in an equivalent amount, subject to the satisfaction of the conditions set forth in Section 4.02 . To the extent any such payment is financed with an ABR Loan or a Swingline Loan, the Borrowers’ obligation to make such payment shall be discharged and replaced by the resulting ABR Loan or Swingline Loan. If the Borrowers are ineligible to finance such payment with an ABR Loan or a Swingline Loan due to its inability to satisfy the conditions set forth in Section 4.02 or otherwise fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable Letter of Credit Disbursement, the payment then due from the Borrowers in respect thereof and such Lender’s Commitment Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Commitment Percentage of the payment then due from the Borrowers, in the same manner as provided in Section 2.08 with respect to Loans made by such Lender (and Section 2.08 shall apply, mutatis mutandis , to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrowers pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse the Issuing Bank for any Letter of Credit Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrowers of their obligation to reimburse such Letter of Credit Disbursement.

(f) Obligations Absolute . The Borrowers’ obligation to reimburse Letter of Credit Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section , constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrowers’ obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrowers to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by applicable law) suffered by any Borrower that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of

gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and refuse to make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

(g) Disbursement Procedures . The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrowers’ Agent by telephone (confirmed by facsimile) of such demand for payment and whether the Issuing Bank has made or will make a Letter of Credit Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrowers of their obligation to reimburse the Issuing Bank and the Lenders with respect to any such Letter of Credit Disbursement.

(h) Interim Interest . If the Issuing Bank shall make any Letter of Credit Disbursement, then, unless the Borrowers shall reimburse such Letter of Credit Disbursement in full on the date such Letter of Credit Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such Letter of Credit Disbursement is made to but excluding the date that the Borrowers reimburse such Letter of Credit Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that , if the Borrowers fail to reimburse such Letter of Credit Disbursement when due pursuant to paragraph (e) of this Section , then Section 2.14(d) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.

(i) Replacement of the Issuing Bank . The Issuing Bank may be replaced at any time by written agreement among the Borrowers, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of the Issuing Bank. At the time any such replacement shall become effective, the Borrowers shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.13(b) . From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

(j) Cash Collateralization .

(i) If any Event of Default shall occur and be continuing, on the Business Day that the Borrowers’ Agent receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders with Letter of Credit Exposure representing greater than 50% of the total Letter of Credit Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrowers shall deposit in the Letter of Credit Account an amount in cash equal to 105% of the Letter of Credit Shortfall as of such date (“ Cash Collateralization ”); provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrowers described in clause (h) , (i) , (j) or (m) of Section 7.01 . Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Secured Obligations. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account and the Borrowers hereby grant the Administrative Agent a security interest in the Letter of Credit Account. Such deposits shall not bear interest other than any interest earned on the investment of such deposits, which investments shall solely be made upon the request of the Borrowers’ Agent in an interest bearing account chosen in the sole discretion of the Administrative Agent. Any such investment shall be made at the Borrower’s risk and expense. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for Letter of Credit Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrowers for the Letter of Credit Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with Letter of Credit Exposure representing greater than 50% of the total Letter of Credit Exposure), be applied to satisfy other Secured Obligations. If the Borrowers are required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrowers within three (3) Business Days after all such Events of Default have been cured or waived, unless needed to satisfy Section 2.07(j)(ii) .

(ii) If, notwithstanding the provisions of this Section 2.07 , any Letter of Credit is outstanding on the Termination Date, then on such date the Borrowers shall deposit with the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, with respect to all Letter of Credit Exposure, as the Administrative Agent in its discretion shall specify, either (i) a Supporting Letter of Credit (under which the Administrative Agent is entitled to draw amounts necessary to reimburse the Issuing Bank for Letter of Credit Disbursements for which it has not been reimbursed and any fees and expenses associated with such outstanding Letter of Credit), or (ii) cash, in immediately available funds, in an amount equal to 105% of the Letter of Credit Shortfall

Amount to be held in the Letter of Credit Collateral Account. Such Supporting Letter of Credit or deposit of cash shall be held by the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, as collateral for the payment and performance of the obligations of the Borrowers under any such Letter of Credit remaining outstanding.

(k) Existing Letters of Credit . On the Closing Date, (i) each Existing Letter of Credit, to the extent outstanding, shall be automatically and without further action by the parties thereto be deemed converted to Letters of Credit issued pursuant to this Section 2.07 for the account of the Borrowers and subject to the provisions hereof, and for this purpose the Letter of Credit Fees shall be payable (in substitution for any fees set forth in the applicable letter of credit reimbursement agreements or applications relating to such letters of credit, except to the extent that such fees are also payable pursuant to Section 2.13(b) ) as if such letters of credit had been issued on the Closing Date, (ii) JPMorgan Chase shall be deemed to be the Issuing Bank hereunder solely for the purpose of maintaining such letters of credit, (iii) such letters of credit shall be included in the calculation of Letter of Credit Exposure and (iv) all liabilities of the Borrowers with respect to such letters of credit shall constitute Obligations. No letter of credit converted in accordance with this clause (k) shall be amended, extended or renewed except in accordance with the terms hereof. Notwithstanding the foregoing, Borrowers shall not be required to pay any additional issuance fees with respect to the issuance of such Letter of Credit solely as a result of such Letter of Credit being converted to a Letter of Credit hereunder, but being understood that the fronting and participation fees set forth in Section 2.13(b) shall apply to such Letters of Credit.

SECTION 2.08 Funding of Borrowings .

(a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 3:00 p.m., Central time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders in an amount equal to such Lender’s Commitment Percentage; provided that Swingline Loans shall be made as provided in Section 2.06 . The Administrative Agent will make such Loans available to the Borrowers by promptly crediting the amounts so received, in like funds, to the Funding Account; provided that ABR Revolving Loans made to finance the reimbursement of (i) a Letter of Credit Disbursement as provided in Section 2.07(e) shall be remitted by the Administrative Agent to the Issuing Bank and (ii) a Protective Advance shall be retained by the Administrative Agent.

(b) Unless the Administrative Agent shall have received notice from a Lender (a) in the case of a Eurodollar Borrowing, prior to the proposed date of any Borrowing or (b) in the case of an ABR Borrowing, not later than 2:00 p.m., Central time, on the proposed date of any Borrowing, that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section 2.08 and may, in reliance upon such assumption, make available to the Borrowers a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent (a “ Defaulting Lender ”), then the applicable Lender and the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding

amount with interest thereon, for each day from and including the date such amount is made available to the Borrowers to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrowers, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing. The Administrative Agent shall not be obligated to transfer to a Defaulting Lender any payments made by the Borrowers to the Administrative Agent for the Defaulting Lender’s benefit, and, in the absence of such transfer to the Defaulting Lender, the Administrative Agent shall transfer any such payments to each other non-Defaulting Lender ratably in accordance with their Commitment Percentage of the Commitments (but only to the extent that such Defaulting Lender’s Borrowing was funded by the other Lenders) or, if so directed by the Borrowers’ Agent and if no Default has occurred and is continuing (and to the extent such Defaulting Lender’s Borrowing was not funded by the other Lenders), retain the same to be re-advanced to the Borrowers as if such Defaulting Lender had made Loans to the Borrowers. Subject to the foregoing, the Administrative Agent may hold and, in its Permitted Discretion, setoff such Defaulting Lender’s funding shortfall against that Defaulting Lender’s Commitment Percentage of all payments received from the Borrowers or re-lend to the Borrowers for the account of such Defaulting Lender the amount of all such payments received and retained by the Administrative Agent for the account of such Defaulting Lender. Until a Defaulting Lender cures its failure to fund its Commitment Percentage of any Borrowing (i) solely for the purposes of voting or consenting to matters with respect to the Loan Documents, such Defaulting Lender shall be deemed not to be a “Lender” and such Defaulting Lender’s Commitment shall be deemed to be zero, (ii) such Defaulting Lender shall not be entitled to any portion of the Commitment Fee and (iii) the Commitment Fee shall accrue in favor of the Lenders which have funded their respective Commitment Percentages of such requested Borrowing and shall be allocated among such non-Defaulting Lenders ratably based on their Commitment Percentage of the Commitments. This Section 2.08 shall remain effective with respect to such Defaulting Lender until (x) the Obligations under this Agreement shall have been declared or shall have become immediately due and payable, (y) the non-Defaulting Lenders, the Administrative Agent, and the Borrowers shall have waived such Defaulting Lender’s default in writing, or (z) the Defaulting Lender makes its Commitment Percentage of the applicable Borrowing and pays to Administrative Agent all amounts owing by the Defaulting Lender in respect thereof. The operation of this Section shall not be construed to increase or otherwise affect the Commitment of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse the performance by the Borrowers of their duties and obligations hereunder.

SECTION 2.09 Interest Elections .

(a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrowers may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section 2.09 . The Borrowers may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders

holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section 2.09 shall not apply to Swingline Borrowings or Protective Advances, which may not be converted or continued.

(b) To make an election pursuant to this Section 2.09 , the Borrowers’ Agent shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.04 if the Borrowers’ Agent were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower.

(c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.03 :

(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrowers shall be deemed to have selected an Interest Period of one month’s duration.

(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e) If the Borrowers’ Agent fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if a Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrowers’ Agent, then, so long as a Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar

Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.10 Termination of Commitments .

(a) Unless previously terminated, the Commitments shall terminate on the Termination Date.

(b) The Borrowers may at any time terminate the Commitments upon (i) the payment in full of all outstanding Loans, together with accrued and unpaid interest thereon, (ii) the cancellation and return of all outstanding Letters of Credit (or alternatively, with respect to each such Letter of Credit, the furnishing to the Administrative Agent of a cash deposit or Supporting Letter of Credit as required by Section 2.07(j)(ii) ) and (iii) the payment in full of all reimbursable expenses and other Obligations together with accrued and unpaid interest thereon.

(c) The Borrowers’ Agent shall notify the Administrative Agent of any election to terminate the Commitments under paragraph (b) of this Section at least two (2) Business Days prior to the closing date of such termination, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrowers’ Agent pursuant to this Section shall be irrevocable. Any termination of the Commitments shall be permanent.

SECTION 2.11 Repayment of Loans; Evidence of Debt .

(a) The Borrowers hereby unconditionally promise to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan on the Termination Date, (ii) to the Administrative Agent the then unpaid amount of each Protective Advance on the earlier of the Termination Date and demand by the Administrative Agent. All unpaid Obligations shall be paid in full in cash by the Borrowers on the Termination Date.

(b) At all times that the Dominion Trigger Event is in effect pursuant to Section 10.02 , each Business Day, at or before 12:00 noon, Central time, the Administrative Agent shall apply (subject to Section 2.19(b) hereof) all immediately available funds credited to the Cash Management Account first to prepay any Protective Advances that may be outstanding, pro rata, second , to repay the Swingline Loans and third , to prepay the Revolving Loans and, if an Event of Default has occurred and is continuing, to cash collateralize outstanding Letter of Credit Exposure in an amount equal to 105% of the Letter of Credit Shortfall Amount.

(c) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrowers to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(d) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due

and payable from the Borrowers to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(e) The entries made in the accounts maintained pursuant to paragraph (c) or (d) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that in the event of a conflict between an account maintained pursuant to paragraph (c) and an account maintained pursuant to paragraph (d) of this Section , the account maintained under paragraph (d) shall control; provided further , that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrowers to repay the Loans in accordance with the terms of this Agreement.

(f) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrowers shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered and permitted assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04 ) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns) except to the extent that any such Lender subsequently returns any such promissory note for cancellation and requests that such Loans once again be evidenced as described in paragraphs (c) and (d) above.

SECTION 2.12 Prepayment of Loans .

(a) The Borrowers shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with paragraph (c) of this Section .

(b) (i) The Borrowers shall immediately repay the Revolving Loans, Letter of Credit Exposure and/or Swingline Loans if at any time the Aggregate Credit Exposure exceeds the lesser of (A) the Total Commitments and (B) the Borrowing Base, to the extent required to eliminate such excess; provided that any such repayments shall be applied first to pay any Protective Advances that may be outstanding, second to prepay Swingline Loans that may be outstanding, third to prepay Revolving Loans that may be outstanding, fourth to pay any unreimbursed Letter of Credit Disbursements, and fifth , if an Event of Default shall have occurred and be continuing, to cash collateralize Letters of Credit.

(ii) During a Dominion Trigger Event, no later than the next Business Day after receipt by any Borrower of the Net Proceeds of any asset disposition (other than Excluded Asset Dispositions), the Borrowers shall prepay the Obligations in an amount equal to 100% of such Net Proceeds as set forth in paragraph (b)(vii) below.

(iii) During a Dominion Trigger Event, if any Borrower issues Equity Interests or Indebtedness (other than Indebtedness permitted by

Section 6.03 ), the Borrowers shall prepay the Obligations in an amount equal to 100% of the Net Proceeds of such issuance no later than the Business Day following the date of receipt of such Net Proceeds as set forth in paragraph (b)(vii) below.

(iv) During a Dominion Trigger Event, any insurance or condemnation proceeds to be applied to the Obligations in accordance with Section 5.03 shall be applied as set forth in paragraph (b)(vii) below.

(v) During a Dominion Trigger Event, promptly (and in no event, later than one (1) Business Day after the receipt thereof) upon receipt by any Borrower of the Net Proceeds of any Extraordinary Receipts, the Borrowers shall prepay the Obligations in an amount equal to 100% of such Net Proceeds as set forth in paragraph (b)(vii) below.

(vi) Without in any way limiting the foregoing, immediately upon receipt by any Borrower of proceeds of any sale of any Collateral, the Borrowers shall cause such Borrower to deliver such proceeds to the Administrative Agent, or deposit such proceeds in a deposit account subject to a control agreement acceptable to the Administrative Agent. All of such proceeds shall be applied during a Dominion Trigger Event as set forth in accordance with paragraph (b)(vii) below or otherwise as provided in Section 2.19(b) . Nothing in this Section shall be construed to constitute Administrative Agent’s or any Lender’s consent to any transaction that is not permitted by other provisions of this Agreement or the other Loan Documents.

(vii) All such amounts pursuant to Sections 2.12(b)(ii) , (iii) , (iv) (to the extent such insurance or condemnation proceeds arise from casualties or losses to Equipment, Fixtures and real Property), (v) , and (vi) , in each case, to the extent such proceeds are received during a Dominion Trigger Event, shall be applied (subject to Section 2.19(b) hereof), first to prepay any Protective Advances that may be outstanding, pro rata, second to prepay Swingline Loans that may be outstanding, and third to prepay the Revolving Loans without a corresponding reduction in the Commitment and thereafter, if an Event of Default shall have occurred and be continuing, to cash collateralize any outstanding Letter of Credit Exposure.

(c) The Borrowers’ Agent shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by facsimile) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 12:00 noon, Central time, three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than 1:00 p.m., Central time, one Business Day before the date of prepayment. Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.03 . Each prepayment of a Borrowing shall be applied ratably to the Revolving Loans included in the

prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.14 .

SECTION 2.13 Fees .

(a) The Borrowers agree to pay to the Administrative Agent for the account of each Lender a commitment fee (the “ Commitment Fee ”), which shall accrue at the Applicable Commitment Fee Rate on the average daily amount of the Unused Total Commitment of such Lender during the period from and including the Closing Date to but excluding the date on which the Lenders’ Commitments terminate. Accrued Commitment Fees shall be payable in arrears on the last day of each calendar month and on the date on which the Commitments terminate, commencing on the first such date to occur after the date hereof. All Commitment Fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(b) The Borrowers agree to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters of Credit, at a per annum rate equal to the Applicable Margin for Eurodollar Loans on the average daily amount of such Lender’s Letter of Credit Exposure (excluding any portion thereof attributable to unreimbursed Letter of Credit Disbursements) during the period from and including the Closing Date to but excluding the later of the date on which such Lender’s Commitment terminates and the date on which such Lender ceases to have any Letter of Credit Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily amount of the Letter of Credit Exposure (excluding any portion thereof attributable to unreimbursed Letter of Credit Disbursements) during the period from and including the Closing Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any Letter of Credit Exposure, as well as the Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of each calendar month shall be payable on the third Business Day following such last day, commencing on the first such date to occur after the Closing Date; provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within fourteen (14) days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(c) The Borrowers agree to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrowers and the Administrative Agent in the Commitment Letter and the Fee Letter.

(d) The Borrowers agree to pay all Collateral Monitoring Fees pursuant to Section 5.08 .

(e) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of

fees payable to it) for distribution, in the case of Commitment Fees and participation fees, to the Lenders. Fees paid shall not be refundable under any circumstances.

SECTION 2.14 Interest .

(a) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Margin.

(b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin.

(c) Each Protective Advance shall bear interest at the Alternate Base Rate plus the Applicable Margin for Revolving Loans plus 2.00%.

(d) Notwithstanding the foregoing, during the occurrence and continuance of an Event of Default, the Administrative Agent or the Required Lenders may, at their option, by notice to the Borrowers (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 9.02 requiring the consent of each Lender affected thereby for reductions in interest rates), declare that (i) all Loans shall bear interest at 2.00% plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount outstanding hereunder, such amount shall accrue at 2.00% plus the rate applicable to such fee or other obligation as provided hereunder.

(e) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments; provided that (i) interest accrued pursuant to paragraph (d) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Revolving Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

(f) All interest hereunder shall be computed on the basis of a year of 360 days, and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

SECTION 2.15 Alternate Rate of Interest . If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

(a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or

(b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrowers’ Agent and the Lenders by telephone or facsimile as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrowers’ Agent and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

SECTION 2.16 Increased Costs .

(a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or

(ii) impose on any Lender or the Issuing Bank or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrowers will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.

(b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrowers will pay to such Lender or the Issuing Bank, as the case may be, such additional

amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.

(c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrowers and shall be conclusive absent manifest error. The Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within fourteen (14) days after receipt thereof.

(d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than one hundred eighty (180) days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrowers’ Agent of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.17 Breakfunding Payments . In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrowers pursuant to Section 2.20 , then, in any such event, the Borrowers shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate (without including the Applicable Margin in such calculation) that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrowers’ Agent and shall be conclusive absent manifest error. The Borrowers shall pay such Lender the amount shown as due on any such certificate within fourteen (14) days after receipt thereof.

SECTION 2.18 Taxes .

(a) Any and all payments by or on account of any obligation of the Borrowers hereunder shall be made free and clear of and without deduction for any Indemnified Taxes; provided that if the Borrowers or the Administrative Agent shall be required by law to deduct any Indemnified Taxes from such payments, then (i) the Borrowers shall increase the sum payable as necessary so that after all required deductions and payments of Indemnified Taxes (including deductions and payments of Indemnified Taxes applicable to additional sums payable under this Section ) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made or such Indemnified Taxes been payable, (ii) the Borrowers and/or the Administrative Agent shall make such deductions of Taxes which they are required by law to deduct and (iii) the Borrowers and/or the Administrative Agent shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b) In addition, the Borrowers shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) The Borrowers shall indemnify the Administrative Agent, each Lender and the Issuing Bank for the full amount of any Indemnified Taxes paid by the Administrative Agent, such Lender or the Issuing Bank and each of their Tax Related Persons, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrowers hereunder (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section ) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority, but excluding penalties, interest and other expenses to the extent solely and directly attributable to the gross negligence or willful misconduct of the Person claiming such indemnity. Payment under this Section 2.18(c) shall be made within fourteen (14) days after the Administrative Agent, Lender or the Issuing Bank makes written demand therefor. A certificate as to the amount of such payment or liability delivered to the Borrowers by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank or their respective Tax Related Persons, shall be conclusive absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority, to the extent such Indemnified Taxes or Other Taxes are imposed with respect to any payment by or on account of any obligation of the Borrowers hereunder or with respect to any Loan Document, the Borrowers shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) Any Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which any Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrowers’ Agent and the Administrative Agent, at the time or times prescribed by applicable law, the appropriate properly completed and executed Internal Revenue Service Form

W-8 (including, without limitation, Form W-8ECI, W-8BEN or W-8IMY) or Form W-9 or any successor form thereto or such other evidence satisfactory to the Borrowers’ Agent and the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate. “United States persons” (within the meaning of Code Section 7701(a)(30)) that are “exempt recipients” (within the meaning of Treasury Regulations Section 1.6049-4(c)(1)(ii) (without regard to the third sentence thereof)) shall not be required to furnish an Internal Revenue Service Form W-9 unless (i) Borrowers’ Agent reasonably believes that such person is, in fact, not an “exempt recipient,” and (ii) Borrowers’ Agent timely and reasonably requests a Form W-9 from such Person ( provided , however , that if a United States person is not legally entitled to deliver a Form W-9 as a result of a change in law occurring after the date hereof, such Person shall not be required to deliver such Form W-9).

(f) If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of or credit against any Taxes paid by any Borrower or as to which it has been indemnified by any Borrower or with respect to which any Borrower has paid additional amounts pursuant to this Section 2.18 , it shall pay over such refund or the amount of such credit to such Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by such Borrower under this Section 2.18 with respect to the Taxes giving rise to such refund or credit), net of all out-of-pocket expenses and Taxes of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund) within thirty (30) days of the receipt of such amount; provided , that the Borrowers upon the request of the Administrative Agent or such Lender, agree to repay the amount paid over to any Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. Nothing in this Section 2.18 shall be construed to require the Administrative Agent, any Lender, the Issuing Bank (or any of their Tax Related Persons) to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to any Borrower or any other Person.

SECTION 2.19 Payments Generally; Allocation of Proceeds; Sharing of Set-offs .

(a) The Borrowers shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of Letter of Credit Disbursements, or of amounts payable under Section 2.16 , 2.17 or 2.18 , or otherwise) prior to 1:00 p.m., Central time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 120 South LaSalle Street, Chicago, Illinois, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.16 , 2.17 , 2.18 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing

interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in Dollars. Solely for purposes of determining the amount of Loans available for borrowing purposes, checks and cash or other immediately available funds from collections of items of payment and proceeds of any Collateral shall be applied in whole or in part against the Obligations, on the day of receipt, subject to actual collection.

(b) Any proceeds of Collateral received by the Administrative Agent (i) not constituting either (A) a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which shall be applied as specified by the Borrowers’ Agent), (B) a mandatory prepayment (which shall be applied in accordance with Section 2.12 ) or (C) amounts to be applied from the Cash Management Account (which shall be applied in accordance with Section 2.11(b) ) or (ii) after an Event of Default has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so direct, such funds shall be applied ratably first , to pay any fees, indemnities, or expense reimbursements including amounts then due to the Administrative Agent and the Issuing Bank from the Borrowers (other than in connection with Banking Services or Swap Obligations), second , to pay any fees or expense reimbursements then due to the Lenders from the Borrowers (other than in connection with Banking Services or Swap Obligations), third , to pay interest due in respect of the Protective Advances, fourth , to pay the principal of the Protective Advances, fifth , to pay interest then due and payable on the Swingline Loans ratably, sixth , to pay the principal on the Swingline Loans ratably, seventh , to pay interest then due and payable on the Revolving Loans ratably, eighth , to prepay principal on the Revolving Loans and unreimbursed Letter of Credit Disbursements ratably, ninth , if an Event of Default has occurred and is continuing, to pay an amount to the Administrative Agent equal to one hundred five percent (105%) of the aggregate undrawn face amount of all outstanding Letters of Credit and the aggregate amount of any unpaid Letter of Credit Disbursements, to be held as cash collateral for such Obligations, tenth , to payment of any amounts owing with respect to Banking Services and Swap Obligations (to the extent the same are Secured Obligations), and eleventh , to the payment of any other Secured Obligation due to the Administrative Agent or any Lender by the Borrowers. Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrowers’ Agent, or unless a Default is in existence, neither the Administrative Agent nor any Lender shall apply any payment which it receives to any Eurodollar Loan, except (a) on the expiration date of the Interest Period applicable to any such Eurodollar Loan or (b) in the event, and only to the extent, that there are no outstanding ABR Loans and, in such case, the Borrowers shall pay the breakfunding payment required in accordance with Section 2.17 . The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations.

(c) At the election of the Administrative Agent, all payments of principal, interest, Letter of Credit Disbursements, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees and expenses pursuant to Section 9.03 ), and other sums payable under the Loan Documents, may be paid from the proceeds of Borrowings made hereunder whether made following a request by the Borrowers’ Agent pursuant to Section 2.04 or a deemed request as provided in this Section or may be deducted from any deposit account of any Borrower maintained with the Administrative Agent. The Borrowers hereby irrevocably authorize (i) the Administrative Agent to make a Borrowing for the purpose of paying each payment of principal, interest and fees as it becomes due hereunder

or any other amount due under the Loan Documents and agrees that all such amounts charged shall constitute Loans (including Swingline Loans and Protective Advances) and that all such Borrowings shall be deemed to have been requested pursuant to Sections 2.04 , 2.05 or 2.06 , as applicable and (ii) the Administrative Agent to charge any deposit account of the Borrowers maintained with the Administrative Agent for each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents, to the extent such payment has not already been made.

(d) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in Letter of Credit Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in Letter of Credit Disbursements and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in Letter of Credit Disbursements of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in Letter of Credit Disbursements; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in Letter of Credit Disbursements to any assignee or participant, other than to the Borrowers or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrowers consent to the foregoing and agree, to the extent they may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against any Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.

(e) Unless the Administrative Agent shall have received notice from the Borrowers’ Agent prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(f) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.06 , 2.07(d) or (e) , 2.08(b) , 2.19(e) or Article 8 , then the

Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections or Articles until all such unsatisfied obligations are fully paid.

SECTION 2.20 Mitigation Obligations; Replacement of Lenders . If any Lender requests compensation under Section 2.16 , or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.18 , then:

(a) such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.16 or 2.18 , as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender (and the Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment); and

(b) the Borrowers may, at their sole expense and effort, require such Lender or any Defaulting Lender (such Lender or Defaulting Lender herein, a “ Departing Lender ”), upon notice by the Borrowers’ Agent to the Departing Lender and the Administrative Agent, to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04 ), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrowers shall have received the prior written consent of the Administrative Agent (and, if a Commitment is being assigned, the Issuing Bank), which consent shall not unreasonably be withheld, conditioned or delayed, (ii) the Departing Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in Letter of Credit Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.16 or payments required to be made pursuant to Section 2.18 , such assignment will result in a reduction in such compensation or payments. A Departing Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

SECTION 2.21 Indemnity for Returned Payments . If after receipt of any payment which is applied to the payment of all or any part of the Secured Obligations, the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the Secured Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such

Lender and the Borrowers shall be liable to pay to the Administrative Agent and the Lenders, and each Borrower hereby indemnifies the Administrative Agent and the Lenders and holds the Administrative Agent and the Lenders harmless for the amount of such payment or proceeds surrendered. The provisions of this Section 2.21 shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds, and any such contrary action so taken shall be without prejudice to the Administrative Agent’s and the Lenders’ rights under this Agreement and shall be deemed to have been conditioned upon such payment or application of proceeds having become final and irrevocable. The provisions of this Section 2.21 shall survive the termination of this Agreement.

SECTION 2.22 Facility Increase . The Borrowers may, from time to time, request an increase in the Total Commitment by an aggregate amount of up to $75,000,000 (each such increase, a “ Facility Increase ”). Each Facility Increase shall be made on notice given by the Borrowers’ Agent to the Administrative Agent not later than 1:00 p.m., (Central time), ten (10) Business Days prior to the date of the proposed Facility Increase. Each such notice (a “ Notice of Facility Increase ”) shall be in a form reasonably satisfactory to the Administrative Agent and shall specify (i) the date of such proposed Facility Increase (the “ Facility Increase Effective Date ”), (ii) the aggregate amount of such proposed Facility Increase, which shall be in an amount not less than $10,000,000 or in an integral multiple of $5,000,000 in excess thereof (the “ Facility Increase Amount ”), (iii) the portion of such Facility Increase that shall be allocated to increase the Fixed Asset Sublimit (which shall not be greater than 33.33% of any such Facility Increase), (iv) that, at the time of and after giving effect to such Facility Increase, the Borrowers shall be in compliance with the financial covenant set forth in Section 6.13 , and (v) that no Default or Event of Default has occurred and is continuing, or will result from such Facility Increase. The Administrative Agent shall give to each Lender prompt notice of the Administrative Agent’s receipt of a Notice of Facility Increase and shall offer such facility to such Lenders, other financial institutions or other Persons engaged in making, purchasing, holding or investing in bank loans or similar extensions of credit in the ordinary course of business as the Administrative Agent may determine in consultation with the Borrowers’ Agent (the “ Offerees ”). Each Offeree shall have until the second Business Day preceding the Facility Increase Effective Date to commit in writing to all or a portion of the Facility Increase. In the event that the Offerees deliver commitments with respect to such Facility Increase in an amount in excess of the Facility Increase Amount, then the Administrative Agent shall allocate the Facility Increase to the Offerees committing to the Facility Increase on any basis the Administrative Agent determines is appropriate in consultation with the Borrowers’ Agent. On the Facility Increase Effective Date, (A) each Person committing to a portion of such Facility Increase that is not a Lender shall execute an assumption agreement satisfactory to the Administrative Agent and satisfying the requirements of Section 9.04(b)(i)(C) pursuant to which such Person agrees to be bound by the terms of this Agreement as a Lender, (B) the Total Commitment will be increased by the Facility Increase Amount, (C) the Commitment of each Lender (including any Person executing an assumption agreement under clause (A) of this sentence) will be increased in accordance with the allocations determined by the Administrative Agent, and (D) each Lender (including any Person executing an assumption agreement under clause (A) of this sentence), after giving effect to such Facility Increase, shall purchase or sell the Loans and Letter of Credit Exposure held by it from or to the other Lenders, as directed by the Administrative Agent, such that, after giving effect to such purchases and sales, each Lender holds its Commitment

Percentage of the outstanding Loans and Letter of Credit Exposure. In the event the commitments of the Offerees in respect of such Facility Increase are less than the Facility Increase Amount, neither the Lenders nor the Administrative Agent shall have any obligation to commit to the uncommitted portion of such Facility Increase, and the Borrowers may elect either to reduce the Facility Increase Amount accordingly or to terminate their request for a Facility Increase; provided, however, that the Administrative Agent shall use its commercially reasonable efforts to identify, and make offers to, such additional Offerees as necessary until it shall receive commitments in an aggregate amount equal to the Facility Increase Amount. Notwithstanding the foregoing, no Facility Increase shall be effected unless the conditions set forth in Section 4.02 (other than clauses (a) and (f) thereof) are satisfied on the Facility Increase Effective Date. This Section 2.22 shall supersede any provisions in Section 9.02 to the contrary.

ARTICLE 3. REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders to make Loans and issue and/or participate in Letters of Credit hereunder, each of the Borrowers jointly and severally represent and warrant as follows:

SECTION 3.01 Organization and Authority . Each of the Borrowers (i) is duly organized and validly existing under the laws of the jurisdiction of its organization and is duly qualified as a foreign organization and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to have a Material Adverse Effect; (ii) has the requisite corporate power and authority to effect the transactions contemplated hereby, and by the other Loan Documents to which it is a party; and (iii) has all requisite organizational power and authority and the legal right to own, pledge, mortgage and operate its properties, and to conduct its business as now or currently proposed to be conducted.

SECTION 3.02 Due Execution . The execution, delivery and performance by each of the Borrowers of each of the Loan Documents to which it is a party (i) are within the respective organizational powers of each of the Borrowers, have been duly authorized by all necessary organizational action including the consent of equity holders where required, and do not (A) contravene the charter or by-laws or other constituent documents of any of the Borrowers, (B) violate any law (including, without limitation, the Securities Exchange Act of 1934) or regulation (including, without limitation, Regulations T, U or X of the Board of Governors of the Federal Reserve System), or any order or decree of any court or Governmental Authority, (C) conflict with or result in a breach of, or constitute a default under, any material indenture, mortgage or deed of trust or any material lease, agreement or other instrument binding on the Borrowers or any of their properties, or (D) result in or require the creation or imposition of any Lien upon any of the property of any of the Borrowers other than the Liens granted pursuant to this Agreement or the other Loan Documents; and (ii) do not require the consent, authorization by or approval of or notice to or filing or registration with any Governmental Authority, other than (x) any actions required outside of the United States (with respect to Collateral located outside of the United States or Collateral consisting of stock of foreign issuers) and (y) actions required under the Federal Assignment of Claims Act of 1940 in order to perfect the security interests of the Administrative Agent in the Collateral. This Agreement has been duly executed and delivered by each of the Borrowers. This Agreement is, and each of the other Loan Documents to which any of the Borrowers is or will be a party, when delivered hereunder or

thereunder, will be, a legal, valid and binding obligation of each Borrower party thereto enforceable against such Borrower, in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03 Statements Made . The information that has been delivered in writing by any of the Borrowers to the Administrative Agent in connection with any Loan Document, and any financial statement delivered pursuant hereto or thereto (other than to the extent that any such statements constitute Projections), taken as a whole and in light of the circumstances in which made, as of the date of delivery of such information or financial statement (other than Projections), contains no untrue statement of a material fact and does not omit to state a material fact necessary to make such statements not misleading (for the purpose of clarification, any financial statements that have been delivered, other than financial statements filed with the SEC and the annual financial statements delivered or to be delivered pursuant to Section 5.01(a) , do not contain notes that would otherwise be required by GAAP); and, to the extent that any such information constitutes Projections, such Projections were prepared in good faith on the basis of assumptions, methods, data, tests and information believed by such Borrower to be reasonable at the time such Projections were furnished. It is understood by the Administrative Agent and the Lenders that all the Projections may not prove to be correct, that actual future financial performance may vary from the Projections and that nothing contained in this Section 3.03 shall be construed as a warranty or guarantee of future financial performance.

SECTION 3.04 Financial Statements . The Borrowers have furnished the Administrative Agent with copies of, or have provided the Administrative Agent with an electronic link to the copies that have been made available through their website or that have been filed with the SEC via EDGAR, the unaudited consolidated financial statements of the Borrowers for the most recent Fiscal Quarter ended at least fifty (50) days prior to the Closing Date (unless such Fiscal Quarter is the fourth Fiscal Quarter, in which case the Borrowers shall have delivered such financial statements for the Fiscal Quarter ended immediately prior thereto) and the audited consolidated financial statements of the Borrowers for the most recent Fiscal Year ended at least one hundred and five (105) days prior to the Closing Date. Subject to any qualifications set forth therein, (i) such financial statements present fairly the financial condition and results of operations of the Borrowers and their Subsidiaries on a consolidated basis as of such date and for such period, (ii) such balance sheets and any notes thereto disclose all liabilities, direct or contingent, of the Borrowers as of the dates thereof required to be disclosed by GAAP and (iii) such financial statements were prepared in a manner consistent with GAAP. No event that had a Material Adverse Effect has occurred since December 31, 2005.

SECTION 3.05 Real Property . As of the Closing Date, Schedule 3.05 sets forth a correct and complete list of all material real Property owned or leased by each Borrower. No material default by any Borrower under any lease or sublease related to any leased or subleased real Property set forth on Schedule 3.05 exists and, to the knowledge of the Borrowers, no material default by any other party to any such lease or sublease exists. Except as set forth on Schedule 3.05 , each of the Borrowers has good and indefeasible title to, or valid leasehold interests in, all of its material real and personal Property, free of all Liens other than those permitted by Section 6.01 .

SECTION 3.06 Liens . Except for Liens existing on the Closing Date as reflected on Schedule 3.06 , there are no Liens of any nature whatsoever on any assets of any Borrower other than: (i) Permitted Liens; (ii) other Liens permitted pursuant to Section 6.01 ; and (iii) Liens in favor of the Administrative Agent and the Lenders. No Borrower is a party to any contract, agreement, lease or instrument the performance of which, either unconditionally or upon the happening of an event, will result in or require the creation of a Lien on any assets of any Borrower or otherwise result in a violation of this Agreement other than (x) the Liens granted to the Administrative Agent and the Lenders as provided for in this Agreement and (y) the Liens granted to the “Collateral Agent” (as defined in the Term Loan Agreement) as provided for in the Term Loan Agreement, which Liens are subject to the terms of the Intercreditor Agreement.

SECTION 3.07 Compliance with Law . Except as set forth on Schedule 3.07 , no Borrower is, to the best of its knowledge, in violation of any law (except those relating to Environmental Laws set forth on Schedule 3.21 ), rule or regulation, or in default with respect to any judgment, writ, injunction or decree of any Governmental Authority the violation of which, or a default with respect to which, would have a Material Adverse Effect.

SECTION 3.08 Insurance . All policies of insurance of any kind or nature owned by or issued to any of the Borrowers, including, without limitation, policies of life, fire, theft, product liability, public liability, property damage, other casualty, employee fidelity, workers’ compensation, employee health and welfare, title, property and liability insurance, are in full force and effect and are of a nature and provide such coverage as is customarily carried by companies of the size and character of such Borrowers.

SECTION 3.09 Use of Proceeds . The proceeds of the Loans are being used by the Borrowers in accordance with, and in a manner and subject to the limitations described in, Section 5.12 .

SECTION 3.10 Litigation. Other than as set forth on Schedule 3.10 , there are no actions, suits, proceedings or investigations pending or, to the actual knowledge of any of the Borrowers, threatened against or affecting any Borrower or any of its respective properties, before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which would be reasonably likely to have a Material Adverse Effect.

SECTION 3.11 Investment and Holding Company Status . None of the Borrowers nor any of their Subsidiaries is (a) an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940 or (b) a “holding company” as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935.

SECTION 3.12 Taxes . Except as set forth on Schedule 3.12 , each of the Borrowers has timely filed or caused to be filed all federal and all state and other material Tax returns and reports required by law to have been filed by it and has paid or caused to be paid all federal and all state and other material Taxes required by law to have been paid by it, except Taxes that are being contested in good faith by appropriate proceedings and for which such Borrower has set aside on its books adequate reserves. Except as set forth on Schedule 3.12 , no

Tax Liens have been filed, and no claims are being asserted with respect to any such Taxes except claims that are being contested in accordance with Section 5.04 .

SECTION 3.13 ERISA . No Termination Event has occurred that, when taken together with all other such Termination Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (excluding the Terminated Plans) as of December 31, 2004, or the date of the most recent audited financial statements reflecting such amounts (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87), did not exceed by more than $20,000,000 the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans did not exceed by more than $20,000,000 the fair market value of the assets of all such underfunded Plans.

SECTION 3.14 Disclosure . Except as disclosed in the Form 10-Q filed with the SEC by the Parent and KACC on May 10, 2006, or in other periodic reports filed with the SEC after May 10, 2006, and prior to July 6, 2006, the Borrowers have disclosed to the Administrative Agent all agreements, instruments and corporate or other restrictions to which the Borrowers or any of their Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No Lien has arisen with respect to any Plan.

SECTION 3.15 Material Agreements . As of the Closing Date, all material agreements and contracts to which any Borrower is a party or is bound as of the date of this Agreement and which, under applicable law would be required to be filed with the SEC are either: (a) filed as exhibits to, or incorporated by reference in, the last Form 10-K or Form 10-Q prior to the Closing Date, or any Form 10-K, Form 10-Q or 8-K thereafter, in each case filed with the SEC by the Parent and/or KACC, or (b) are listed on Schedule 3.15 . No Borrower is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (x) any material agreement to which it is a party or (y) any agreement or instrument evidencing or governing Indebtedness.

SECTION 3.16 Reportable Transaction . The Borrowers do not intend to treat the Borrowings or issuances of Letters of Credit and related transactions as being a “reportable transaction” (within the meaning of Treasury Regulation Section 1.6011-4). In the event the Borrowers determine to take any action inconsistent with such intention, the Borrowers’ Agent will promptly notify the Administrative Agent thereof.

SECTION 3.17 Capitalization and Subsidiaries . Schedule 3.17 sets forth (a) a correct and complete list of the name and relationship to each Borrower of each and all of such Borrower’s Significant Subsidiaries, (b) a true and complete listing of each class of each of the authorized Equity Interests of each Borrower, of which all of such issued shares are validly issued, outstanding, fully paid and non-assessable, and owned beneficially and of record by the Persons identified on Schedule 3.17 , and (c) the type of entity of each of the Borrowers and each of their Significant Subsidiaries. All of the issued and outstanding Equity Interests owned by any Borrower has been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and is fully paid and nonassessable. The Borrowers’ Agent

may amend from time to time Schedule 3.17 (by delivery of a revised Schedule 3.17 to the Agent) upon the sale of any Significant Subsidiary which is permitted in this Agreement.

SECTION 3.18 Common Enterprise . Each Borrower expects to derive benefit (and its board of directors or other governing body has determined that it may reasonably be expected to derive benefit), directly and indirectly, from (i) successful operations of each of the other Borrowers and (ii) the credit extended by the Lenders to the Borrowers hereunder, both in their separate capacities and as members of the group of companies. Each of the Borrowers has determined that execution, delivery, and performance of this Agreement and any other Loan Documents to be executed by such Borrower is within its purpose, will be of direct and indirect benefit to such Borrower, and is in its best interest.

SECTION 3.19 Location of Bank Accounts . Schedule 3.19 , as amended from time to time by the Borrowers’ Agent upon any change to the accounts maintained by any Borrower (by delivery of a revised Schedule 3.19 to the Agent), sets forth initially, as of the Closing Date, a complete and accurate list of all deposit, checking and other bank accounts, all securities and other accounts maintained with any broker dealer and all other similar accounts maintained by any Borrower, together with a description thereof (i.e., the bank or broker dealer at which such deposit or other account is maintained and the account number and the purpose thereof). As of the Closing Date, no Borrower maintains any other accounts other than those set forth on Schedule 3.19 .

SECTION 3.20 Labor Disputes . Except as set forth on Schedule 3.20 , as of the date of this Agreement (a) there is no collective bargaining agreement or other labor contract covering employees of the Borrowers, (b) no such collective bargaining agreement or other labor contract is scheduled to expire during the term of this Agreement, (c) to the knowledge of any of the Borrowers, no union or other labor organization is seeking to organize, or to be recognized as, a collective bargaining unit of employees of any of the Borrowers or any of their Subsidiaries or for any similar purpose, and (d) there is no pending or, to the knowledge of any of the Borrowers, threatened, strike, work stoppage, material unfair labor practice claim, or other material labor dispute against or affecting the Borrowers or their Subsidiaries or their employees.

SECTION 3.21 Environmental Matters .

(a) Except as set forth on Schedule 3.21(a) :

(i) all facilities and Property (including underlying groundwater) owned, operated, or leased by the Borrowers or any of their Subsidiaries have been, and continue to be, in material compliance with all Environmental Laws;

(ii) there are no pending or, to the knowledge of the Borrowers after due inquiry, threatened

(A) claims, complaints, notices, or requests for information received by any of the Borrowers or any of their Subsidiaries, from any Governmental Authority, or from

any Person which has commenced a legal proceeding against any of the Borrowers or any of their Subsidiaries, with respect to any alleged violation of any Environmental Law, or

(B) complaints, notices, or inquiries to any of the Borrowers or any of their Subsidiaries, from any Governmental Authority, or from

any Person which has commenced a legal proceeding against any of the Borrowers or any of their Subsidiaries, regarding potential liability under any Environmental Law;

(iii) there have been no Releases of Hazardous Materials at, on, into or under any Property now or previously owned, operated, or leased by any of the Borrowers or any of their Subsidiaries that, singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect;

(iv) the Borrowers and their Subsidiaries have been issued and are in material compliance with all permits, certificates, approvals, licenses, and other authorizations required by any applicable Environmental Law relating to any environmental matters and necessary for their businesses;

(v) no Property now or previously owned, operated, or leased by any of the Borrowers or any of their Subsidiaries is listed or, to the knowledge of any of the Borrowers, proposed for listing (with respect to owned Property only) on the National Priorities List pursuant to CERCLA or in the CERCLIS, or, to the knowledge of any of the Borrowers, on any similar state list of sites requiring investigation or clean-up;

(vi) there are no underground storage tanks (as defined in 40 C.F.R. §280.1, as the same may be amended, modified, supplemented, or replaced from time to time), active or abandoned, including petroleum storage tanks, on or under any Property now or previously owned or leased by any of the Borrowers or any of their Subsidiaries that, singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect;

(vii) none of the Borrowers nor any of their Subsidiaries has, to the knowledge of any Borrower, transported or arranged for the transportation of any Hazardous Material to any location which is listed or proposed for listing on the National Priorities List pursuant to CERCLA, on the CERCLIS or any similar state list or which is the subject of federal, state, or local enforcement actions or other investigations that could reasonably be expected to result in material claims against any of the Borrowers or any of their Subsidiaries for any remedial work, damage to natural resources, or personal injury, including claims under CERCLA; and

(viii) there are no polychlorinated biphenyls or friable asbestos present at any real Property now or previously owned or leased by any of

the Borrowers or any of their Subsidiaries that, singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(b) Schedule 3.21(b) identifies all sites at which any of the Borrowers or any of their Subsidiaries are currently conducting cleanup or remediation or an investigation as to whether such cleanup or remediation is warranted or required.

SECTION 3.22 Confirmation Order; District Court Order . The Confirmation Order has been entered by the Bankruptcy Court, is in full force and effect and has been affirmed by the District Court Order. The District Court has entered the District Court Order, such District Court Order is in full force and effect and the time to appeal such District Court Order or to seek review, rehearing or certiorari with respect to such District Court Order has expired, and no appeal or petition for review, rehearing or certiorari with respect to such order of the District Court is pending other than the Insurer Appeals and the McNeil Appeal, none of which will adversely affect the transactions contemplated hereby or have a Material Adverse Effect.

SECTION 3.23 Consummation Date . All conditions to the occurrence of the Consummation Date have occurred or have been waived with the consent of the Administrative Agent and otherwise in accordance with the terms of the Reorganization Plan, and the Consummation Date has occurred or shall occur concurrently with the closing of this Agreement.

SECTION 3.24 Solvency . (a) Immediately after the consummation of the transactions to occur on the date hereof, including the Restructuring Transactions and all distributions to be made on or about the Consummation Date in accordance with the Reorganization Plan and the incurrence of Indebtedness under the Term Loan, and immediately following the making of each Borrowing and the issuance of each Letter of Credit, if any, made hereunder and after giving effect to the application of the proceeds of such Borrowing or such issuance of a Letter of Credit, (i) the fair value of the assets of each Borrower, at a fair valuation, will exceed the debts and liabilities, subordinated, contingent or otherwise, of each such Borrower; (ii) the present fair saleable value of the Property of each Borrower is not less than the amount that will be required to pay the probable liability of such Borrower on its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) each Borrower will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) each Borrower will not have unreasonably small capital with which to conduct the businesses in which it is engaged as such businesses are now conducted and are proposed to be conducted after the date hereof. The amount of contingent liabilities at any time shall be computed as the amount that, in light of all facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

(b) No Borrower intends to, or believes that it or any of its Subsidiaries will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.

SECTION 3.25 Security Interest in Collateral . The provisions of the Security and Pledge Agreement and the other Loan Documents create legal and valid Liens on all the Collateral in favor of the Administrative Agent, for the benefit of the Administrative Agent and the Secured Parties, and such Liens constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations, enforceable against the applicable Borrower and having priority over all other Liens on the Collateral except in the case of (a) Liens permitted under Section 6.01 , to the extent any such Permitted Liens would have priority over the Liens in favor of the Administrative Agent pursuant to any applicable law or any applicable agreement that is permitted hereunder, (b) Liens perfected only by possession (including possession of any certificate of title) to the extent the Administrative Agent has not obtained or does not maintain possession of such Collateral, and (c) Liens on real Property perfected only by recordation of a mortgage or deed of trust to the extent the Administrative Agent does not elect to require such a recorded instrument pursuant to Section 4.01(e) hereof.

ARTICLE 4. CONDITIONS OF LENDING

SECTION 4.01 Conditions Precedent to Initial Loans and Initial Letters of Credit . The obligation of the Lenders to make the initial Loans or the Issuing Bank to issue the initial Letter of Credit, whichever may occur first, is subject to the satisfaction (or waiver in accordance with Section 9.02 ) of the following conditions precedent:

(a) Supporting Documents . The Administrative Agent shall have received for each of the Borrowers:

(i) a copy of such entity’s certificate of incorporation or formation, as amended, certified as of a recent date by the Secretary of State of the state of its incorporation or formation;

(ii) a certificate of such Secretary of State, dated as of a recent date, as to the good standing of and payment of taxes by that entity and as to the charter documents on file in the office of such Secretary of State;

(iii) a certificate of the Secretary or an Assistant Secretary of that entity dated the date of the initial Loans or the initial Letter of Credit hereunder, whichever first occurs, and certifying (A) that attached thereto is a true and complete copy of the by-laws or limited liability company agreement of that entity as in effect on the date of such certification, (B) that attached thereto is a true and complete copy of resolutions adopted by the Board of Directors or managers of that entity authorizing the Borrowings and Letter of Credit extensions hereunder, the execution, delivery and performance in accordance with their respective terms of this Agreement, the Loan Documents and any other documents required or contemplated hereunder or thereunder and the granting of the security interest in the Letter of Credit Account and other Liens contemplated hereby, (C) that the certificate of incorporation or formation of that entity has not been amended since the date of the last amendment thereto indicated on the certificate of the Secretary of State furnished pursuant to clause (i) above and (D) as to the incumbency and specimen signature of each officer or manager of that

entity executing this Agreement and the Loan Documents or any other document delivered by it in connection herewith or therewith (such certificate to contain a certification by another officer or manager of that entity as to the incumbency and signature of the officer signing the certificate referred to in this clause (iii) );

(iv) (A) a copy of the Reorganization Plan, substantially in the form of Exhibit A-1 and which is in all respects in form and substance satisfactory to the Administrative Agent and Lenders, and (B) all orders of the Bankruptcy Court approving the Reorganization Plan, this Agreement, the Commitment Letter and the Fee Letter, in form and substance acceptable to the Agents and the Lenders; and

(v) a copy of the Confirmation Order, substantially in the form of Exhibit A-2 , entered by the Bankruptcy Court and which is in all respects in form and substance satisfactory to the Administrative Agent and the Lenders and which is in full force and effect and has been affirmed by the District Court Order; and

(vi) a copy of the District Court Order, substantially in the form of Exhibit A-3 , entered by the District Court which affirms the Confirmation Order and which is in all respects in form and substance satisfactory to the Administrative Agent and the Lenders and which is in full force and effect and the time to appeal the District Court Order or to seek review, rehearing or certiorari with respect to the District Court Order shall have expired and no appeal or petition for review, rehearing or certiorari with respect to the Confirmation Order shall be pending other than the Insurer Appeals and the McNeil Appeal.

(b) Consummation Date . All conditions to the occurrence of the effective date of the Reorganization Plan shall have occurred or shall have been waived in accordance with the terms of the Reorganization Plan, and the Consummation Date shall have occurred or shall occur concurrently with the closing of this Agreement.

(c) Terms of Restructuring . The Administrative Agent and the Lenders shall be satisfied with, to the extent not specifically described in the Reorganization Plan, the material terms of the restructuring of the Borrowers (including, without limitation, changes to the current composition of the Board of Directors and of senior management and the capital and tax structure of each Borrower and each of their Significant Subsidiaries).

(d) Security and Pledge Agreement . Each of the Borrowers shall have duly executed and delivered to the Administrative Agent a Security and Pledge Agreement in substantially the form of Exhibit B (the “ Security and Pledge Agreement ”), pursuant to which each of the Borrowers shall have granted to the Administrative Agent, for the benefit of the Lenders, a first priority, perfected security interest in the Collateral (free and clear of all Liens, other than Permitted Liens and other Liens permitted under the Loan Documents), and shall have (i) filed appropriately completed and duly executed Uniform Commercial Code financing statements and (ii) delivered to the Administrative Agent any pledged Collateral required to be delivered thereunder.

(e) Mortgages . Each of the Borrowers shall have duly executed and delivered to the Administrative Agent a Mortgage, substantially in the form of Exhibit H , duly executed by the applicable Borrower, in or to any real Property listed on Schedule 4.01(e) .

(f) Intercreditor Agreement . Pursuant to the Intercreditor Agreement, the “Lenders” (as defined in the Term Loan Agreement) shall have agreed to lien subordination terms and conditions acceptable to the Administrative Agent.

(g) Cash Management . Each of the Borrowers shall be in compliance with Article 10 , including the requirement to deliver tri-party control, blocked account or lockbox agreements with respect to accounts set forth on Schedule 10.01 , in each case, in form and substance reasonably acceptable to the Administrative Agent.

(h) Intellectual Property . Each of the Borrowers shall have made arrangements satisfactory to the Administrative Agent to duly record all appropriate documents in the U.S. Patent and Trademark Office, the United States Copyright Office, and any applicable domain name registry, as applicable.

(i) Repayment of Existing Indebtedness . The Existing Credit Agreement and all commitments thereunder to lend shall have been terminated, all amounts outstanding thereunder (other than in respect of Existing Letters of Credit issued thereunder which, as provided in Section 2.07(k) , shall become “Letters of Credit” hereunder) shall have been paid in full or cash collateralized and all Liens on the assets of the Borrowers or any of their Subsidiaries securing any obligations thereunder or under any related agreement shall have been permanently released and the Administrative Agent shall have received evidence satisfactory in form and substance to it demonstrating such termination, payment and release.

(j) Opinion of Counsel . The Administrative Agent and the Lenders shall have received the favorable written opinion of counsel to the Borrowers reasonably acceptable to the Administrative Agent, dated the date of the initial Loans or the issuance of the initial Letter of Credit, whichever first occurs, substantially in the form of Exhibit C .

(k) Fees and Expenses . The Borrowers shall have paid to the Administrative Agent (i) the then unpaid balance of all accrued and unpaid Fees due under and pursuant to this Agreement and the Fee Letter, and (ii) all accrued and unpaid legal fees and expenses of the Administrative Agent that the Borrowers are not otherwise prohibited from paying by an order of the Bankruptcy Court. The Administrative Agent shall also have received a duly executed and delivered Second Amended and Restated Fee Letter, substantially in the form of Exhibit J .

(l) Field Exams, Environmental Reports, Appraisals . The Administrative Agent shall be satisfied with the results of field examinations. The Borrowers shall have delivered to the Administrative Agent reasonably

satisfactory appraisals of the Borrowers’ Inventory and Equipment and such appraisals shall be from an appraiser selected and engaged by the Administrative Agent, and prepared on a basis satisfactory to the Administrative Agent, such appraisals to include, without limitation, information required by applicable law and regulations. The Borrowers shall have also delivered to the Administrative Agent reasonably satisfactory appraisals, environmental reports, surveys and title insurance with respect to material real Property to the extent the Borrowers propose to include such real Property in the Borrowing Base (provided that reasonably satisfactory appraisals, environmental reports, surveys, and title insurance may be delivered on a post-closing basis so long as any related real Property is not included in the Borrowing Base until such reasonably satisfactory appraisals, environmental reports, surveys and title insurance are received by the Agent).

(m) Certificates of Insurance . The Borrowers shall have delivered to the Administrative Agent certificates of insurance reasonably satisfactory to the Administrative Agent evidencing the existence of all insurance required to be maintained by the Borrowers pursuant to Section 5.03 of this Agreement.

(n) Material Consents . The Borrowers shall have delivered to the Administrative Agent all material consents listed on Schedule 4.01(n) .

(o) Corporate and Judicial Proceedings . All corporate and judicial proceedings and all instruments and agreements in connection with the transactions among the Borrowers, the Administrative Agent and the Lenders contemplated by this Agreement shall be reasonably satisfactory in form and substance to the Administrative Agent, and the Administrative Agent shall have received all information and copies of all material documents and papers, which the Administrative Agent may have reasonably requested in connection therewith, such documents and papers where appropriate to be certified by proper corporate, governmental or judicial authorities.

(p) Information . The Administrative Agent shall have received such information (financial or otherwise) as may be reasonably requested by the Administrative Agent.

(q) Projections . The Administrative Agent and the Lenders shall have received a copy of the initial Projections of the Parent, which Projections shall cover a period commencing on or prior to the Closing Date and ending December 31, 2008, such Projections shall be satisfactory in form and substance to the Administrative Agent.

(r) Compliance with Material Laws and Regulations . The Borrowers shall have granted the Administrative Agent access to and the right to inspect all reports, audits and other internal information of the Borrowers relating to environmental matters, and any third party verification of certain matters relating to compliance with Environmental Laws reasonably requested by the Administrative Agent, and the Administrative Agent shall be reasonably satisfied (x) that the Borrowers are in compliance in all material respects with all applicable material laws and regulations (including but not limited to ERISA (except for such violations as set forth on Schedule 3.07 ), margin regulations, bank regulatory limitations and Environmental Laws) and (y) that the Borrowers have made adequate provision for the costs of maintaining such compliance.

(s) UCC Searches . The Administrative Agent shall have received UCC searches (including tax liens and judgments) and patent and trademark searches conducted in the jurisdictions in which the Borrowers conduct business (dated as of a date reasonably satisfactory to the Agent), reflecting the absence of Liens and encumbrances on the assets of the

Borrowers other than such Liens permitted under the Loan Documents and other Liens as may be satisfactory to the Administrative Agent.

(t) Minimum Availability . The Borrowers shall have minimum Availability at closing (on a pro forma basis after giving effect to the Loans made and the Letters of Credit issued or deemed issued on the Closing Date) in an amount not less than $75,000,000.

(u) Funding Account . The Borrowers’ Agent shall have delivered to the Administrative Agent a notice setting forth the deposit account of the Borrowers (the “ Funding Account ”) to which the Lenders are authorized by the Borrowers to transfer the proceeds of any Borrowing requested or authorized pursuant to this Agreement.

(v) Closing Documents . The Administrative Agent shall have received all documents required by Section 4.01 and each item listed on the closing checklist, in each case, each reasonably satisfactory in form and substance to the Administrative Agent.

SECTION 4.02 Conditions Precedent to Each Loan and Each Letter of Credit . The obligation of the Lenders to make each Loan and of the Issuing Bank to issue each Letter of Credit, including the initial Loan and the initial Letter of Credit is subject to the following conditions precedent:

(a) Notice . To the extent required by Article 2 , the Administrative Agent shall have received a notice with respect to such borrowing or issuance, as the case may be, as required by Article 2 .

(b) Representations and Warranties . Either (i) all representations and warranties contained in this Agreement and the other Loan Documents shall be true and correct in all material respects on and as of the date of each Borrowing or the issuance, renewal or extension of each Letter of Credit hereunder with the same effect as if made on and as of such date except to the extent such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date, or (ii) if any such representation and warranty is not true and correct in all material respects, neither the Administrative Agent nor the Required Lenders shall have determined not to make any Loan or instructed the Issuing Bank not to issue Letters of Credit as a result of the fact that such representation or warranty is untrue or incorrect in any material respect.

(c) No Default . At the time of and immediately after giving effect to such Borrowing or the issuance, renewal or extension of such Letter of Credit, as applicable, either (i) no Default shall have occurred and be continuing or (ii) if a Default has occurred and is continuing, neither the Administrative Agent nor the Required Lenders shall have determined not to make such Borrowing or instructed the Issuing Bank not to issue such Letter of Credit as a result of such Default.

(d) Payment of Fees . The Borrowers shall have paid to the Administrative Agent the then unpaid balance of all accrued and unpaid Fees then payable under and pursuant to this Agreement and the letter referred to in Section 2.13 .

(e) Borrowing Base Certificate . The Administrative Agent shall have received the timely delivery of the most recent Borrowing Base Certificate required to be delivered hereunder, substantially in the form of Exhibit E (except that the initial Borrowing Base Certificate shall be delivered by the Closing Date).

(f) Availability . After giving effect to any Borrowing or the issuance of any Letter of Credit, Availability is not less than zero.

The request or deemed request by the Borrowers’ Agent or the Borrowers for, and the acceptance by any Borrower of, an extension of credit hereunder shall be deemed to be a representation and warranty by the Borrowers that the conditions specified in this Section 4.02 have been satisfied or waived at that time. The Administrative Agent may (but shall not be obligated to) require a duly completed compliance certificate with respect to the foregoing as a condition to making a Borrowing or requesting the issuance of Letter of Credit.

ARTICLE 5. AFFIRMATIVE COVENANTS

From the date hereof and for so long as any Commitment shall be in effect or any Letter of Credit shall remain outstanding or any amount shall remain outstanding or unpaid under this Agreement or any other Loan Document, each of the Borrowers agrees, jointly and severally with each other Borrower, that it will:

SECTION 5.01 Financial Statements, Reports, etc. In the case of the Borrowers, deliver to the Administrative Agent:

(a) on or before the date upon which the Parent’s annual report on Form 10-K is required to be filed with the SEC (and in any event within one hundred five (105) days after the end of each Fiscal Year), the Parent’s (i) audited consolidated balance sheet and related statements of income, stockholders’ equity and cash flows, showing the financial condition of the Parent and its Subsidiaries on a consolidated basis as of the close of such Fiscal Year and the results of their operations during such year, such consolidated financial statements to be audited for the Parent and its Subsidiaries by Deloitte & Touche LLP or other independent public accountants of recognized national standing and accompanied by an audit opinion of such accountants (without (i) in the case of Fiscal Years ending on or after December 31, 2006, a “going concern” or like qualification, exception, or explanatory paragraph and (ii) in the case of any Fiscal Year, without any qualification or exception as to the scope of such audit) and to be certified by a Financial Officer of the Parent to the effect that such consolidated financial statements fairly present the financial condition and results of operations of the Parent and its Subsidiaries on a consolidated basis in accordance with GAAP and (ii) unaudited consolidating balance sheet and related unaudited consolidating statements of income as of the close of the fourth Fiscal Quarter and as of the close of such Fiscal Year, all such consolidating financial statements showing separately the financial condition of the Parent and its Significant Subsidiaries; provided , however , that any document required to be delivered pursuant to this Section 5.01(a) shall be deemed to have been furnished to the Administrative Agent if the Borrowers have provided the Administrative Agent with a link to such documents that have been made available through their website or that have been filed with the SEC via EDGAR;

(b) on or before the date upon which the Parent’s quarterly report on Form 10-Q is required to be filed with the SEC (and in any event within fifty (50) days after the end of each of the first three Fiscal Quarters of the Parent), the Parent’s (i) unaudited consolidated balance sheets and related unaudited statements of income, stockholders’ equity and cash flows, showing the financial condition of the Parent and its Subsidiaries on a consolidated basis as of the close of such Fiscal Quarter and the results of their operations during such Fiscal Quarter and the then elapsed portion of the Fiscal Year, certified by a Financial Officer of the Parent as fairly presenting the financial condition and results of operations of the Parent and its Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes and (ii) unaudited consolidating balance sheet and related unaudited consolidating statements of income as of the close of the such Fiscal Quarter, all such consolidating financial statements showing separately the financial condition of the Parent and its Significant Subsidiaries; provided , however , that any document required to be delivered pursuant to this Section 5.01(b) shall be deemed to have been furnished to the Administrative Agent if the Borrowers have provided the Administrative Agent with a link to such documents that have been made available through their website or that have been filed with the SEC via EDGAR;

(c) commencing with the first Fiscal Month following the Closing Date as soon as available, but no more than 30 days after the end of each month, the unaudited consolidated balance sheet as of the close of such Fiscal Month and related unaudited consolidated statements of income and cash flow of the Parent and its Subsidiaries during such month and the year to date period;

(d) (i) concurrently with any delivery of financial statements under paragraphs (a) , (b) and (c) above, a certificate of a Financial Officer certifying that such financial statements fairly present the financial condition and results of operations of the Parent and its Subsidiaries in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes, (ii) concurrently with any delivery of financial statements under paragraph (a) above, a certificate in accordance with prevailing professional standards (which certificate may be limited to accounting matters and disclaim responsibility for legal interpretations) of the accountants auditing the consolidated financial statements delivered under paragraph (a) above certifying that, in the course of the regular audit of the business of the Parent and its Subsidiaries, such accountants have obtained no knowledge that a Default or Event of Default has occurred and is continuing or if, in the opinion of such accountants, a Default or Event of Default has occurred and is continuing, specifying the nature thereof and all relevant facts with respect thereto;

(e) as soon as available, but not more than sixty (60) days after the end of each Fiscal Year, commencing with the Fiscal Year ending December 31, 2006, a copy of the plan and forecast (including a projected consolidated balance sheet, income statement and funds flow statement) of the Parent on a consolidated basis for each month of the then current Fiscal Year (the “ Projections ”) in form reasonably satisfactory to the Administrative Agent;

(f) as soon as available but in any event within fifteen (15) days of the end of each calendar month, and during a Dominion Trigger Event more frequently as needed to

redetermine Availability, but in any event not more frequently than weekly, as of the period then ended:

(i) a detailed aging of the Borrowers’ Accounts (A) aged by invoice date and (B) reconciled to the Borrowing Base Certificate delivered as of such date, prepared in a manner reasonably acceptable to the Administrative Agent, together with a summary specifying the name, address, and balance due for each Account Debtor;

(ii) a schedule detailing the Borrowers’ Inventory, in form satisfactory to the Administrative Agent, by location (showing Inventory in transit, any Inventory located with a third party under any consignment, bailee arrangement, or warehouse agreement), by class (raw material, work-in-process and finished goods), which Inventory shall be valued at the lower of cost (determined on a first-in, first-out basis) or market and reconciled to the Borrowing Base Certificate delivered as of such date;

(iii) a summary of categories of Accounts excluded from Eligible Accounts Receivable and Eligible Inventory; and

(iv) a reconciliation of the Borrowers’ Accounts and Inventory between the amounts shown in the applicable Borrower’s general ledger and financial statements and the reports delivered pursuant to clauses (i) and (ii) above;

(g) such other information respecting any Borrower or any of their Subsidiaries as the Administrative Agent may from time to time reasonably request;

(h) within thirty (30) days of each December 31, an updated customer list for the Borrowers and their Subsidiaries, which list shall state the customer’s name, mailing address and phone number and shall be certified as true and correct by a Financial Officer of the Parent;

(i) within thirty (30) days following the first Business Day of each March and September, a certificate of good standing for each Borrower from the appropriate governmental officer in its jurisdiction of incorporation, formation, or organization, as applicable;

(j) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrowers with the SEC ( provided that any such documents shall be deemed delivered on the date Borrowers provide to Administrative Agent a link to where such documents were filed electronically via EDGAR or such documents have been made publicly available on their website), or any governmental authority succeeding to any of or all the functions of said commission, or with any national securities exchange, as the case may be;

(k) promptly upon receipt thereof, any and all default notices received under or with respect to any leased location or public warehouse where Collateral is located (which shall be delivered within two Business Days after receipt thereof);

(l) promptly upon any Borrower obtaining knowledge thereof or having reason to know, notice of a material portion of Eligible Accounts Receivable, Eligible Equipment, Eligible Inventory or Eligible Real Estate, as the case may be, becoming ineligible under the Borrowing Base;

(m) as soon as available and in any event within thirty (30) days after the Borrowers or any of their ERISA Affiliates knows that any Termination Event has occurred with respect to any Plan, a statement of a Financial Officer of such Borrower describing the full details of such Termination Event and the action, if any, which such Borrower or such ERISA Affiliate is required or proposes to take with respect thereto, together with any notices required or proposed to be given to or filed with or by such Borrower, the ERISA Affiliate, the PBGC, a Plan participant or the Plan administrator with respect thereto;

(n) promptly and in any event within ten (10) days after receipt thereof by any Borrower or any ERISA Affiliate from a Multiemployer Plan sponsor, a copy of each notice received by any Borrower or any ERISA Affiliate concerning (A) the imposition of Withdrawal Liability by a Multiemployer Plan, (B) the determination that a Multiemployer Plan is, or is expected to be, in reorganization within the meaning of Title IV of ERISA, (C) the termination of a Multiemployer Plan within the meaning of Title IV of ERISA, or (D) the amount of liability incurred, or which may be incurred, by any Borrower or any ERISA Affiliate in connection with any event described in clause (A), (B) or (C) above;

(o) promptly and in any event within ten (10) days after receipt thereof by such Borrower or any of its ERISA Affiliates from the PBGC copies of each notice received by the Borrowers or any such ERISA Affiliate of the PBGC’s intention to terminate any Single Employer Plan of any Borrower or such ERISA Affiliate other than the Terminated Plans or to have a trustee appointed to administer any such Plan;

(p) within ten (10) days after notice is given or required to be given to the PBGC under Section 302(f)(4)(A) of ERISA of the failure of any Borrower or any of their ERISA Affiliates to make timely payments to a Plan other than such payments as are required to be made within 31 days after the effective date of the Settlement Agreement, a copy of any such notice filed and a statement of a Financial Officer of such Borrower setting forth (A) sufficient information necessary to determine the amount of any lien under Section 302(f)(3), (B) the reason for the failure to make the required payments and (C) the action, if any, which such Borrower or any of its ERISA Affiliates proposed to take with respect thereto;

(q) promptly upon obtaining knowledge thereof, notice of any written notice by the holder of any Equity Interests of any Borrower or the holder of any Indebtedness of any Borrower in excess of $20,000,000 that any default exists with respect thereto or that any Borrower is not in compliance with the terms thereof;

(r) promptly upon receipt thereof, any notice of any governmental investigation or any litigation commenced or threatened against any Borrower that could reasonably be expected to have a Material Adverse Effect;

(s) promptly upon any Borrower obtaining knowledge thereof, notice of any Lien (other than Permitted Liens and other Liens permitted under the Loan Documents) or any claim made or asserted against Collateral having a value in excess of $5,000,000;

(t) promptly upon the commencement thereof, notice of any proceedings with respect to any Tax, fee, assessment, or other governmental charge in excess of $5,000,000;

(u) prior to the opening thereof, notice of any new deposit account by any Borrower with any bank or other financial institution;

(v) promptly upon obtaining knowledge thereof, notice of any loss, damage, or destruction to Collateral having a book value of $5,000,000 or more, whether or not covered by insurance;

(w) immediately after any Borrower obtaining knowledge thereof, notice of any pending strike, work stoppage, unfair labor practice claim, or other labor dispute affecting any Borrower or any of its Subsidiaries in a manner which could reasonably be expected to have a Material Adverse Effect; and

(x) promptly upon obtaining knowledge thereof, notice of any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

With respect to any report, balance sheet, statement, certificate, plan, forecast, schedule, summary, notice or other document delivered by the Borrowers to the Administrative Agent pursuant to this Section , the Administrative Agent shall deliver each such report, balance sheet, statement, certificate, plan, forecast, schedule, summary, notice or other document to the Lenders by complying with the requirements contained in Section 9.01 or by posting such document to Intralinks or an equivalent means of electronic delivery to which the Lenders have access. Each notice delivered under clauses (o) through (x) of this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Parent setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

SECTION 5.02 Corporate Existence . Preserve and maintain in full force and effect all governmental rights, privileges, qualifications, permits, licenses and franchises necessary or desirable in the normal conduct of its business except (i) if (A)in the reasonable business judgment of the Parent, it is in the best economic interest of the Borrowers taken as a whole not to preserve and maintain such rights, privileges, qualifications, permits, licenses and franchises, and (B) such failure to preserve the same could not, in the aggregate, reasonably be expected to have a Material Adverse Effect on the operations, business, properties, assets, prospects or financial condition of the Borrowers, taken as a whole, and (ii) as otherwise permitted in connection with sales of assets permitted by Section 6.09 .

SECTION 5.03 Insurance . Maintain with financially sound and reputable carriers acceptable to the Administrative Agent in its Permitted Discretion (including, consistent with past practice, insurance companies affiliated with the Parent), insurance with respect to their

Properties and business (including business interruption insurance, fire insurance and public liability insurance) in such amounts, of such character and against such risks acceptable to the Administrative Agent in its Permitted Discretion and as are usually maintained by companies engaged in the same or similar business or having comparable properties, and in any case having a coverage which is not materially less than the insurance of such type maintained by the Borrowers on the date of this Agreement, provided that no Borrower will use or permit any property to be used in any manner which might render inapplicable any such insurance coverage; provided , however , that in the event such proceeds are received during a Covenant Trigger Event, all such proceeds shall be applied in accordance with Section 2.12(b)(iv) . All property insurance covering Collateral maintained by the Borrowers shall name the Administrative Agent as sole loss payee. All liability insurance maintained by the Borrowers with respect to occurrences arising out of or relating to the Collateral shall name the Administrative Agent as additional insured. All such property and liability insurance shall further provide for at least thirty (30) days’ prior written notice (ten (10) days’ prior written notice with respect to cancellation for non-payment of premium or at the request of the insured) to the Administrative Agent of the cancellation or substantial modification thereof.

SECTION 5.04 Obligations and Taxes . With respect to each Borrower, pay all its material obligations promptly and in accordance with their terms and pay and discharge promptly all material Taxes imposed upon it or upon its income or profits or in respect of its property, before the same shall become delinquent, as well as all material lawful claims for labor, materials and supplies or otherwise which, if unpaid, would become a Lien or charge upon such properties or any part thereof (other than a Permitted Lien); provided , however , that no Borrower shall be required to pay and discharge or to cause to be paid and discharged any such obligation, Tax or claim to the extent that (i) it is being contested in good faith by appropriate proceedings, (ii) adequate reserves for it have been set aside on the books of the Borrowers, and (iii) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.05 Notice of Event of Default, etc. Promptly but no later than five (5) Business Days after any of the Borrowers has knowledge of a Default or an Event of Default, the Borrowers’ Agent shall give to the Administrative Agent notice in writing of such Default or Event of Default.

SECTION 5.06 Access to Books and Records . Maintain or cause to be maintained at all times true and complete books and records in accordance with GAAP of the financial operations of the Borrowers; and provide the Administrative Agent and its representatives and advisors access to all such books and records as well as any appraisals of the Collateral during regular business hours, in order that the Administrative Agent may upon reasonable prior notice examine and make abstracts from such books, accounts, records, appraisals and other papers for the purpose of verifying the accuracy of the various reports delivered by the Borrowers to the Administrative Agent or the Lenders pursuant to this Agreement or for otherwise ascertaining compliance with this Agreement; and at any reasonable time and from time to time during regular business hours, upon reasonable notice and with reasonable frequency, permit the Administrative Agent and any agents or representatives (including, without limitation, appraisers) thereof to visit the properties of the Borrowers and to

conduct examinations of and to monitor the Collateral held by the Administrative Agent, in each case at the expense of the Borrowers.

SECTION 5.07 Borrowing Base Certificate . Furnish to the Administrative Agent as soon as available and in any event on or before the 15th day of each month, a Borrowing Base Certificate as of the last day of the immediately preceding month, or on a more frequent basis during a Dominion Trigger Event as needed to redetermine Availability, but in any event not more frequently than weekly.

SECTION 5.08 Collateral Monitoring and Review . At any time upon the request of the Administrative Agent or the Required Lenders through the Administrative Agent, permit the Administrative Agent or professionals (including, without limitation, internal and third-party consultants, accountants and appraisers) retained by the Administrative Agent or its professionals to conduct: evaluations of the Borrowers’ practices in the computation of the Borrowing Base and appraisals of the real Property and Equipment included in the Borrowing Base, provided that , if no Event of Default has occurred and is continuing and if no Covenant Trigger Event has occurred and is continuing, one appraisal per calendar year shall be at the sole expense of the Borrowers (including all reasonable fees and expenses in connection therewith) provided , further that the Borrowers’ Agent may request that the Administrative Agent order appraisals at the sole expense of the Borrowers of the real Property included in the Borrowing Base twice prior to the Termination Date (with the amount available under the Borrowing Base in connection with the real Property being adjusted according to the results of such appraisals), (the reasonable fees and expenses in connection with such evaluations and appraisals, the “ Collateral Monitoring Fees ”). In connection with any collateral monitoring or review and appraisal relating to the computation of the Borrowing Base, the Borrowers shall make such adjustments to the Borrowing Base as the Administrative Agent shall reasonably require in its Permitted Discretion based upon the terms of this Agreement and results of such collateral monitoring, review or appraisal.

SECTION 5.09 Projections . Make its Financial Officers available to discuss the Borrowers’ Projections (copies of which have heretofore been delivered to the Administrative Agent and the Lenders pursuant to Section 4.01(q) or 5.01(e) (as applicable)) with the Administrative Agent and/or the Lenders upon the Administrative Agent’s reasonable request.

SECTION 5.10 Maintenance of Properties and Intellectual Property Rights . (a) Keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, and (b) obtain and maintain in effect at all times all material intellectual property rights, licenses and permits, which are necessary for it to own its property or conduct its business as currently conducted and not dispose of, grant, or permit to lapse any rights to any material intellectual property except as otherwise expressly permitted hereunder.

SECTION 5.11 Compliance with Laws . Comply in all material respects with all laws (except those relating to Environmental Laws, which compliance is subject to Section 5.14 ), rules, regulations and orders of any Governmental Authority applicable to it or its property.

SECTION 5.12 Use of Proceeds and Letters of Credit . Use the proceeds of the Loans only for (i) refinancing of the amounts outstanding under the Existing Credit Agreement, (ii) financing of administrative expenses incurred in connection with emerging from bankruptcy, (iii) payment of the Claims contemplated by the Reorganization Plan, (iv) working capital, letters of credit and capital expenditures, including Permitted Acquisitions, (v) other general corporate purposes of the Borrowers and (vi) payment of any related transaction costs, fees and expenses. Such proceeds may not be used (a) in connection with the investigation (including discovery proceedings), initiation or prosecution of any claims, causes of action, adversary proceedings or other litigation against the Lenders or the Administrative Agent in their capacities as such and (b) for any purpose that would violate any of the Regulations of the Board, including Regulations T, U and X.

SECTION 5.13 Additional Collateral; Further Assurances . (a) Unless the Required Lenders otherwise consent and subject to the requirements of applicable law, cause each of its wholly owned Subsidiaries (excluding any foreign Subsidiary and all Excluded Subsidiaries) formed or acquired after the Closing Date in accordance with the terms of this Agreement to (i) become a Borrower by executing a Joinder Agreement substantially in the form of Exhibit F hereto (the “ Joinder Agreement ”) and (ii) grant Liens to the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, in any Property of such new Borrower which constitutes Collateral, including Mortgages in or to any parcel of real Property located in the United States owned by such new Borrower which the Borrowers’ Agent requests be included in the Borrowing Base.

(b) Cause (i) 100% of the issued and outstanding Equity Interests of (A) each of the Borrowers’ domestic Subsidiaries and (B) Reorganized KACC (provided however that neither this provision nor any such pledge of Reorganized KACC shall effect, nor shall either be construed as effecting, a pledge of the Equity Interests of any Subsidiary of Reorganized KACC) and Kaiser Bauxite, and (ii) 65% of the issued and outstanding Equity Interests in (A) each foreign Subsidiary directly owned by any Borrower and (B) Trochus, to be subject at all times to a first priority Lien in favor of the Administrative Agent pursuant to the terms and conditions of the Loan Documents or other security documents as the Administrative Agent shall reasonably request; provided , that , with respect to (y) any Subsidiary that is organized outside of the United States, Canada, or Bermuda, and is not a Significant Subsidiary, and (z) Trochus, no Borrower shall be required to take any action under the laws of the jurisdiction of organization of such Person to perfect or register the pledge of such shares and that the Borrowers shall have until the date that is the 30th day after the Closing Date to perfect the pledge of shares of (i) KACL under the laws of Canada or Ontario and (ii) Trochus under the laws of Bermuda; provided , further , that the Borrowers shall have until the date that is the 60 ^th day after the Closing Date to deliver the stock certificate representing the shares of Anglesey owned by KAIC to the Administrative Agent.

(c) Execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents and agreements, and take or cause to be taken such actions as the Administrative Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents, including but not limited to all items of the type required by Section 4.01 (as applicable).

(d) If any material assets (including any real Property or improvements thereto or any interest therein) are acquired by the Borrowers after the Closing Date (other than assets constituting Collateral under the Security and Pledge Agreement that become subject to the Lien in favor of the Administrative Agent upon acquisition thereof), the Borrowers’ Agent will notify the Administrative Agent and the Lenders thereof, and, if requested by the Administrative Agent or the Required Lenders after consultation with the Borrowers’ Agent, the Borrowers will cause such assets to be subjected to a Lien securing the Secured Obligations and will take such actions as shall be necessary or reasonably requested by the Administrative Agent, to grant and perfect such Liens, including actions described in paragraph (c) of this Section and, in the case of acquired owned real Property, a Mortgage, all at the expense of the Borrowers.

SECTION 5.14 Environmental Covenant . The Borrowers will, and will cause each of their Subsidiaries to:

(a) use and operate all of their respective facilities and properties in material compliance with all Environmental Laws, keep all necessary permits, approvals, certificates, licenses, and other authorizations required by applicable Environmental Laws relating to environmental matters in effect and remain in material compliance therewith, and handle all Hazardous Materials in material compliance with all applicable Environmental Laws.

(b) (i) as soon as possible and in any event not later than fifteen (15) Business Days after the Borrowers become aware of the receipt thereof, notify the Administrative Agent and provide copies of all written claims, complaints, notices, or inquiries by a Governmental Authority, or any Person which has commenced a legal proceeding against any of the Borrowers or any of their Subsidiaries, relating to compliance by any of the Borrowers or any of their Subsidiaries with, or potential liability of any of the Borrowers or any of their Subsidiaries under, Environmental Laws; and

(ii) with reasonable diligence cure all environmental defects and conditions which are the subject of any actions and proceedings against any of the Borrowers or any of their Subsidiaries relating to compliance with Environmental Laws, except to the extent such actions and proceedings (or the obligation of any of the Borrowers or any of their Subsidiaries to cure such defects and conditions) are stayed or are being contested by any of the Borrowers or any of their Subsidiaries in good faith by appropriate proceedings; and

(c) provide such information, access, and certifications which the Administrative Agent may reasonably request form time to time to evidence compliance with this Section 5.14 .

ARTICLE 6. NEGATIVE COVENANTS

From the date hereof and for so long as any Commitment shall be in effect or any Letter of Credit shall remain outstanding or any amount shall remain outstanding or unpaid under this Agreement, each Borrower covenants and agrees that no Borrower will, and no Borrower will permit any of its Significant Subsidiaries to ( provided that nothing in this Article 6 shall

prohibit (x) the consummation of the Restructuring Transactions on or about the Consummation Dates or (y) the creation or funding of the PI Trusts with the PI Trust Assets, in each case, pursuant to, and in accordance with, the Reorganization Plan):

SECTION 6.01 Liens . Incur, create, assume or suffer to exist any Lien on any asset of any Borrower, now owned or hereafter acquired by any Borrower, other than (i) Liens described in Schedule 3.06 hereto; (ii) Permitted Liens; (iii) Liens in favor of the Administrative Agent and the Lenders; (iv) Liens securing purchase money Indebtedness or Capital Leases permitted by Section 6.03(ii) ; provided that (y) such security interests and the Indebtedness secured thereby are incurred prior to or within ninety (90) days after acquisition of the financed Property or assets and (z) such security interests shall not apply to any property or assets of any Borrower or Subsidiary of a Borrower other than the assets or property financed by such Indebtedness or subject to such Capital Leases; (v) Liens securing judgment for the payment of money not constituting an Event of Default under Section 7.01(k) ; (vi) Liens on property of a Person existing at the time such Person is merged into or consolidated with a Borrower or Significant Subsidiary or becomes a Borrower or a Significant Subsidiary or on any acquired property, in each case, in connection with an Investment or acquisition permitted under Section 6.07 ; provided that (x) such Liens were not created in contemplation of or in connection with such acquisition or such Person becoming a Borrower or a Significant Subsidiary, as the case may be, (y) such Lien shall not apply to any property or assets of any Borrower other than the assets being acquired and (z) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Borrower or a Significant Subsidiary, as the case may be, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount of the obligations secured by such Lien and that are otherwise permitted hereunder; (vii) precautionary UCC filings by lessors under operating leases covering the Property subject to such leases and UCC filings in respect of Liens permitted under this Section 6.01 ; and (viii) Liens granted to the “Collateral Agent” (as defined in the Term Loan Agreement) as provided for in the Term Loan Agreement but only so long as the Collateral Agent, the “Lenders” under (and as defined in) the Term Loan Agreement and such Liens are subject to the Intercreditor Agreement.

SECTION 6.02 Merger, etc. Consolidate or merge with or into another Person; provided that (i) any Borrower may dissolve, merge or liquidate with or into another Borrower, (ii) any Subsidiary of a Borrower may dissolve, merge or liquidate with or into a Borrower so long as such Borrower is the entity surviving any merger, (iii) any Subsidiary of a Borrower that is not a Borrower may dissolve, merge or liquidate with or into any other Subsidiary of a Borrower other than an Excluded Subsidiary, and (iv) in connection with any Permitted Acquisition under Section 6.07(iv) below, any subsidiary of a Borrower may merge or consolidate with another Person or permit any other Person to merge into or consolidate with it (subject to clause (g) of the definition of the term Permitted Acquisition).

SECTION 6.03 Indebtedness . Contract, create, incur, assume or suffer to exist any Indebtedness, except for (i) the Secured Obligations; (ii) Indebtedness with respect to existing Capital Lease Obligations and purchase money Indebtedness for fixed or capital assets and extensions, refinancings, replacements or renewals of such Indebtedness permitted by clause (xiii) below; (iii) intercompany Indebtedness of any Borrower to any Borrower; provided such intercompany Indebtedness is subordinated to the Secured Obligations pursuant to an

Intercompany Subordination Agreement substantially in the form of Exhibit I hereto (the “ Intercompany Subordination Agreement ”) or otherwise in a manner reasonably satisfactory to the Administrative Agent; (iv) Indebtedness arising from Investments (other than Permitted Acquisitions) permitted by Section 6.07 and Indebtedness of a Person existing at the time such Person is merged into or consolidated with a Borrower or Significant Subsidiary or becomes a Borrower or a Significant Subsidiary, in each case, in connection with an Investment or acquisition permitted under Section 6.07 ; provided that such Indebtedness was not incurred in contemplation of or in connection with such Investment or acquisition; (v) Indebtedness in respect of obligations pursuant to any Permitted Commodity Swap Agreement; (vi) Indebtedness incurred by any Borrower under Swap Agreements entered into in the ordinary course of financial management, and not for speculative purposes; provided that , except to the extent any such Indebtedness is a Secured Obligation, all such obligations shall be unsecured; (vii) Indebtedness owed to JPMorgan Chase, or any of its Lender Affiliates, in respect of any Banking Services Obligations; (viii) Indebtedness in respect of performance, surety and appeal bonds arising in the ordinary course of business; (ix) Indebtedness existing on the Closing Date and described on Schedule 6.03 and extensions, refinancings, replacements or renewals of such Indebtedness permitted by clause (xiii) below; (x) Guarantees by the Borrowers of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of any Borrower or any other Subsidiary, provided that (1) the Indebtedness so Guaranteed is permitted by this Section 6.03 , (2) Guarantees by any Borrower of Indebtedness of any Subsidiary that is not a Borrower shall be subject to Section 6.07 , and (3) Guarantees permitted under this clause (x) shall be subordinated to the Secured Obligations of the applicable Borrower on the same terms as the Indebtedness so Guaranteed is subordinated to the Secured Obligations; (xi) Indebtedness in respect of advanced payments by customers under purchase contracts in the ordinary course of business of the applicable Borrower; (xii) Indebtedness incurred pursuant to the Term Loan Agreement and Guarantees thereof, and extensions, refinancings, replacements or renewals of such Indebtedness permitted by clause (xiii) below; (xiii) Indebtedness that represents an extension, refinancing, or renewal of any of the Indebtedness described in clauses (ii) , (ix) and (xii) hereof; provided that (1) the principal amount of such Indebtedness is not increased and, with respect to extensions, refinancings, replacements or renewals of Indebtedness incurred pursuant to the Term Loan Agreement and Guarantees thereof, the then outstanding aggregate principal amount of such Indebtedness is not (unless Availability is greater than $65,000,000 both immediately before and after such extension, refinancing, replacement or renewal) decreased, (2) any Liens securing such Indebtedness are not extended to any additional Property of any Borrower, except to the extent that the Lien of the Administrative Agent extends to (and is a perfected, first priority Lien in) such additional Property, (3) no Borrower that is not obligated with respect to repayment of such Indebtedness at the time of such refinancing is required to become obligated with respect thereto, (4) such extension, refinancing, replacement or renewal does not result in a shortening of the average weighted maturity of the Indebtedness so extended, refinanced, replaced or renewed, (5) the terms of any such extension, refinancing, replacement or renewal are not less favorable to the obligor thereunder than the original terms of such Indebtedness, and (6) (i) with respect to extensions, refinancings, replacements or renewals of Indebtedness incurred pursuant to the Term Loan Agreement and Guarantees thereof, such refinancing, renewal, replacement or extension Indebtedness is subject to the Intercreditor Agreement, and (ii) with respect to extensions, refinancings, replacements or renewals of all other Indebtedness, the terms and conditions of the refinancing, renewal, replacement or extension Indebtedness include

subordination terms and conditions that are at least as favorable to the Administrative Agent and the Lenders as those that were applicable to the refinanced, renewed, replaced or extended Indebtedness; and (xiv) other unsecured Indebtedness not to exceed $10,000,000 in the aggregate at any time outstanding.

SECTION 6.04 Guarantees and Other Liabilities . Purchase or repurchase (or agree, contingently or otherwise, so to do) the Indebtedness of, or assume, Guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance of any obligation or capability of so doing, or otherwise), endorse or otherwise become liable, directly or indirectly, in connection with the obligations, stock or dividends of any Person, except (i) for any guaranty of Indebtedness or other obligations of any Borrower if such Person could have incurred such Indebtedness or obligations under this Agreement; (ii) by endorsement of negotiable instruments for deposit or collection in the ordinary course of business; and (iii) with respect to Guarantees of Indebtedness pursuant to Section 6.03(viii) , (x) or (xii) .

SECTION 6.05 Dividends; Capital Stock . Declare or pay, directly or indirectly, any dividends or make any other distribution or payment, whether in cash, property, securities or a combination thereof, with respect to (whether by reduction of capital or otherwise) any shares of capital stock or membership interests (or any options, warrants, rights or other equity securities or agreements relating to any capital stock or membership interests), or set apart any sum for the aforesaid purposes (all of the foregoing, “ Restricted Payments ”); provided that (i) any Borrower may make Restricted Payments to any other Borrower that is its direct parent; (ii) any Borrower (other than the Parent) may declare and pay dividends ratably with respect to its Equity Interests; and (iii) the Parent may make a Restricted Payment so long as at the time of and after giving effect to such Restricted Payment, (A) no Default is continuing or would result therefrom and (B) the amount of such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Parent after the Closing Date, is less than the sum of (1) 50% of the Net Income of the Parent and its Subsidiaries for the period, taken as one accounting period, from the Closing Date to the end of the Parent’s most recently ended Fiscal Quarter for which financial statements complying with Section 5.01(a) or 5.01(b) (as applicable) have been delivered at the time of such Restricted Payment, or, if such Net Income for such period is a deficit, less 100% of such deficit, plus (2) up to 100% of the proceeds (such proceeds to be determined in accordance with clause (c) of the definition of Net Proceeds without giving effect to the proviso therein) from the sale or issuance by the Parent of any of its Equity Interest remaining after making any mandatory prepayment of Net Proceeds that may be required at such time, if any, pursuant to Section 2.12(b)(iii) and not used to make any Investments or other Restricted Payments, plus (3) $2,000,000.

SECTION 6.06 Transactions with Affiliates . Sell or transfer any property or assets to, or otherwise engage in any other material transactions with, any of its Affiliates (other than the Borrowers), other than (i) any transaction (or, in the case of a series of related transactions, any series of related transactions taken as a whole) in the ordinary course of business at prices and on terms and conditions not less favorable to such Borrower than could be obtained on an arm’s-length basis from unrelated third parties; (ii) dividends, distributions or payments permitted under Section 6.05 ; (iii) issuances of securities pursuant to employee stock benefit plans approved by the board of directors of such person, (iv) granting of stock options to

employees or directors pursuant to a plan approved by the board of directors of such person, (v) loans or advances to employees permitted pursuant to Section 6.07 ; and (vi) reasonable fees to directors of any Borrower or Significant Subsidiary who are not employees of the Borrowers or Significant Subsidiaries.

SECTION 6.07 Investments, Loans, Advances, Guaranties and Acquisitions . (a) Purchase, hold or acquire (including pursuant to a merger with any Person that was not a Borrower or a wholly-owned subsidiary of a Borrower prior to such merger) any capital stock, evidences of indebtedness or other securities of (including any option, warrant or other right to acquire any of the foregoing), make or permit to exist any loans or advances to Guarantee any obligations of, or make or permit to exist any investment in, any other Person or purchase or otherwise acquire (in one transaction or series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise) (all of the foregoing, “ Investments ”), except for (i) ownership by the Borrowers of the capital stock or membership interests of each of their Subsidiaries, provided that no further equity investments may be made in any such Person that is not a Borrower; (ii) Investments by Subsidiaries that are not Borrowers in any Borrower or Significant Subsidiary provided that any such Investment which is a loan, advance, guaranty or other debt Investment shall be subordinated to the Obligations pursuant to the Intercompany Subordination Agreement or such other form acceptable to the Administrative Agent; (iii) Permitted Investments; (iv) Permitted Acquisitions; (v) advances and loans to KACL in the ordinary course of business consistent with past practices, provided that no Event of Default has occurred and is continuing, and provided further that in no event shall the aggregate principal amount of such advances or loans made after the Closing Date be greater than $10,000,000 at any one time outstanding; (vi) advances and loans to, and Investments in, Trochus in the ordinary course of business consistent with past practices, provided that no Event of Default has occurred and is continuing, and provided further that in no event shall the sum of (A) the aggregate principal amount of such advances or loans made after the Closing Date at any one time outstanding plus (B) the amount of such Investments (other than such advances and loans under clause (A) above) made after the Closing Date in the aggregate be greater than $8,000,000; (vii) Investments in the form of advance payments in connection with any Permitted Commodity Swap Agreement; (viii) Investments in respect of, including by way of contributions to, voluntary employee beneficiary associations established for the benefit of certain hourly retirees and for the benefit of certain salaried retirees pursuant to agreements, as amended and/or modified, that KACC and Kaiser Bellwood negotiated with the United Steelworkers of America, the International Association of Machinists and Aerospace Workers, and the Official Committee of Retired Employees in the Cases, the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America and/or its Local Union No. 1186, the Paper, Allied-Industrial, Chemical and Energy Workers International Union, AFL-CIO, CLC and the International Chemical Workers Union Council-United Food & Commercial Workers and approved by orders of the Bankruptcy Court entered on March 22, 2004, March 25, 2004, June 1, 2004, February 1, 2005, October 21, 2005 and January 9, 2006; (ix) loans or advances made by a Borrower to its employees in the ordinary course of business for travel and entertainment expenses, relocation costs and similar purposes (up to a maximum of $2,000,000 in the aggregate at any one time outstanding), and loans or advances to directors, officers or employees of any Borrower the proceeds of which are concurrently used to purchase Equity Interests in a Borrower; (x) Investments described on Schedule 6.07 hereto and modifications, extensions, and renewals of such Investments; (xi) other Investments not to

exceed $10,000,000 in the aggregate at any time outstanding; and (xii) advances and loans to Reorganized KACC from time to time in accordance with the Reorganization Plan, provided that in no event shall the aggregate principal amount of such advances or loans made after the Closing Date be greater than $7,000,000 at any one time outstanding.

SECTION 6.08 Creation of Subsidiaries . Create or acquire any Subsidiary of any Borrower after the Closing Date, except for Subsidiaries created or acquired in accordance with the terms of Section 5.13 .

SECTION 6.09 Disposition of Assets . Sell or otherwise dispose of any assets (including, without limitation, the Equity Interests of any Subsidiary), except for (i) sales of Permitted Investments; (ii) sales of Inventory in the ordinary course of business; (iii) dispositions of surplus, obsolete or damaged assets no longer used in the business of the Borrowers and their Subsidiaries; (iv) sales of assets set forth on Schedule 1.01(a) or Schedule 6.09 hereto; (v) the disposition of assets by any Borrower or any of its Subsidiaries in any single transaction or series of related transactions with an aggregate fair market value of less than $500,000; (vi) the disposition of assets by any Borrower or any of its Subsidiaries not otherwise permitted under this Section 6.09 having a fair market value not exceeding $10,000,000 (excluding the fair market value of any asset sold or disposed of in an Excluded Asset Sale) in the aggregate in each Fiscal Year provided that at least 75% of the consideration received by the Borrower or a Subsidiary of the Borrower in connection with such disposition shall be cash or assets that can be readily converted to cash without discount within ninety (90) days; (vii) dispositions of property by (A) any Borrower to any other Borrower, (B) any Subsidiary to any Borrower, and (C) any Subsidiary that is not a Borrower to any other Subsidiary that is not a Borrower; (viii) the grant of any Liens permitted under Section 6.01 ; (ix) non-exclusive licenses of intellectual property in the ordinary course of business; and (x) sale leaseback transactions with respect to fixed or capital assets, provided that any such sale is made for cash consideration in an amount not less than the fair market value of such asset and is consummated within 90 days of the acquisition or completion of construction of such asset by such Person.

SECTION 6.10 Nature of Business . Modify or alter in any material manner the nature and type of its business as conducted on the Closing Date or the manner in which such business is conducted (except such activities as may be incidental or related thereto or reasonably related extensions thereof), it being understood that dispositions of assets permitted by Section 6.09 shall not constitute such a material modification or alteration.

SECTION 6.11 Restrictive Agreements . Enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Borrower or any of their Significant Subsidiaries (other than Excluded Subsidiaries) to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary of a Borrower to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to the Borrowers or any other Subsidiary of the Borrowers or to guarantee Indebtedness of the Borrowers or any other Subsidiary of the Borrowers; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by this Agreement or the Term Loan Documents, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 6.11 (but shall apply to any extension or renewal of, or any amendment or modification

expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement and (v) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.

SECTION 6.12 Prepayment of Indebtedness; Subordinated Indebtedness . (a) Directly or indirectly, voluntarily purchase, redeem, defease or prepay any principal of, premium, if any, interest or other amount payable in respect of any Indebtedness prior to its scheduled maturity, other than (i) the Obligations; (ii) Capital Lease Obligations permitted by Section 6.03(ii) not to exceed $10,000,000 in the aggregate in any Fiscal Year; (iii) prepayment of Indebtedness in connection with the cancellation, termination or unwinding of Permitted Commodity Swap Agreements; (iv) prepayment of Indebtedness in connection with the cancellation, termination or unwinding of Swap Obligations described in Section 6.03(vi) ; (v) prepayments in respect of Indebtedness in respect of advanced payments permitted by Section 6.03(xi) ; and (vi) prepayments of Indebtedness incurred pursuant to the Term Loan Agreement; provided that no such prepayment of Indebtedness incurred pursuant to the Term Loan Agreement shall be made unless Availability is greater than $65,000,000 both before and after such prepayment; provided , however , that notwithstanding the first proviso of this clause (vi) , the Borrowers may extend, refinance, renew or replace the Indebtedness incurred pursuant to the Term Loan Agreement and Guarantees thereof to the extent permitted under Section 6.03 .

(b) (i) Make any amendment or modification to any indenture, note or other agreement evidencing or governing any Indebtedness of such Person the payment of which is subordinated to payment of the Obligations, thereof, (w) accelerating the date of any payment of principal or interest thereunder, (x) increasing the interest rate or fees payable thereunder or converting any interest payable in kind to current cash pay interest, (y) amending, modifying, supplementing or otherwise modifying any of the subordination provisions of such indenture, note or other agreement or (z) making any provision of such indenture, note or other agreement more restrictive or burdensome on any Borrower nor any Subsidiary of any Borrower or (ii) directly or indirectly voluntarily prepay, defease or in substance defease, purchase, redeem, retire or otherwise acquire, any such Indebtedness.

SECTION 6.13 Fixed Charge Coverage . Permit the Fixed Charge Coverage Ratio as of the last day of any trailing fiscal period of the Borrowers set forth below to be less than the ratio set forth opposite such period:


	Fixed Charge Coverage
Period Ending	Ratio
the Fiscal Quarter ending September 30, 2006		1.00:1.00

the last two Fiscal Quarters ending December 31, 2006		1.00:1.00


	Fixed Charge Coverage
Period Ending	Ratio
the last three Fiscal Quarters ending March 31, 2007		1.00:1.00

the last four Fiscal Quarters ending June 30, 2007		1.00:1.00

the last four Fiscal Quarters ending the last day of each Fiscal Quarter thereafter		1.10:1.00

; provided that no Borrower shall be required to comply with this covenant as of the last day of any Fiscal Quarter so long as (i) no Covenant Trigger Event has occurred and is continuing on the last day of such Fiscal Quarter and (ii) no Covenant Trigger Event occurs after the last day of such Fiscal Quarter and on or prior to the last day of the next succeeding Fiscal Quarter.

SECTION 6.14 Amendments to Orders . Directly or indirectly consent to, or file any motion or pleading in any court supporting or seeking, any amendment, supplement, modification or stay of the Confirmation Order or the District Court Order.

ARTICLE 7. EVENTS OF DEFAULT

SECTION 7.01 Events of Default . If any of the following events (“ Events of Default ”) shall occur:

(a) the Borrowers shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any Letter of Credit Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b) the Borrowers shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Section ) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three (3) Business Days after the date due;

(c) any representation or warranty made or deemed made by or on behalf of any Borrower in or in connection with this Agreement or any other Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;

(d) any Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02 (with respect to a Borrower’s existence), 5.05 , or 5.12 or in Article 6 ;

(e) any Borrower shall fail to observe or perform any covenant, condition or agreement contained in this Agreement or any other Loan Document (other than those which constitute a default under another clause of this Section ), and such failure shall

continue unremedied for a period of (i) five (5) Business Days after the earlier of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of Sections 5.01 , 5.06 and Article 10 of this Agreement or (ii) thirty (30) days after the earlier of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of any other Section of this Agreement;

(f) any Borrower shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable;

(g) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;

(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of a Borrower or any Significant Subsidiary of a Borrower or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Borrower or any Significant Subsidiary of any Borrower or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;

(i) any Borrower or any Significant Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Section , (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for such Borrower or such Significant Subsidiary or for a substantial part of its assets, (iv) file an answer admit-ting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j) any Borrower or any Significant Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;

(k) one or more judgments for the payment of money in an aggregate amount in excess of $5,000,000 shall be rendered against any Borrower, any Significant Subsidiary or any combination thereof (to the extent not covered by insurance as to which the

relevant insurance company does not dispute coverage) and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of any Borrower or any Significant Subsidiary to enforce any such judgment or any Borrower or any Significant Subsidiary shall fail within 30 days to discharge one or more non-monetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal or otherwise being appropriately contested in good faith by proper proceedings diligently pursued;

(l) a Change of Control shall occur; or

(m) any material provision of any Loan Document shall, for any reason, cease to be valid and binding on any of the Borrowers, or any Borrower or Affiliate of any Borrower shall so assert in any pleading filed in any court or any material portion of any Lien (as determined by the Administrative Agent in its Permitted Discretion) intended to be created by the Loan Documents shall cease to be or shall not be a valid and perfected Lien having the priorities contemplated hereby or thereby; or

(n) (i) any Termination Event shall have occurred and shall continue unremedied (if applicable) for more than 10 days and the sum (determined as of the date of occurrence of such Termination Event) of the Insufficiency of the Plan in respect of which such Termination Event shall have occurred and be continuing and the Insufficiency of any and all other Plans with respect to which such a Termination Event shall have occurred and then exist is equal to or greater than $5,000,000, or (ii) there exists any fact or circumstance that reasonably could be expected to result in the imposition of a Lien or security interest under Section 401(a)(29) or 412(n) of the Code or under ERISA with respect to any Plan of any Borrower or an ERISA Affiliate; or

(o) (i) any Borrower or any ERISA Affiliate thereof shall have been notified by the sponsor or trustee of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan, (ii) such Borrower or such ERISA Affiliate does not have reasonable grounds, in the opinion of the Administrative Agent, to contest such Withdrawal Liability or is not in fact contesting such Withdrawal Liability in a timely and appropriate manner, and (iii) the amount of such Withdrawal Liability specified in such notice, when aggregated with all other amounts required to be paid to Multiemployer Plans in connection with Withdrawal Liabilities (determined as of the date of such notification), exceeds $5,000,000 allocable to obligations or requires payments exceeding $500,000 per annum in excess of the annual payments made with respect to such Multiemployer Plans by such Borrower or such ERISA Affiliate for the plan year immediately preceding the plan year in which such notification is received; or

(p) any Borrower or any ERISA Affiliate thereof shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, if as a result of such reorganization or termination the aggregate annual contributions of the Borrowers and its ERISA Affiliates to all Multiemployer Plans that are then in reorganization or being terminated

have been or will be increased over the amounts contributed to such Multiemployer Plans for the plan years that include the date hereof by an amount exceeding $5,000,000; or

(q) a material breach by any Borrower or any ERISA Affiliate of the Settlement Agreement shall have occurred; or

(r) any Borrower is criminally indicted or convicted under any law that may reasonably be expected to lead to a forfeiture of any property of such party having a fair market value in excess of $10,000,000; or

(s) an order of any court of competent jurisdiction is entered amending, supplementing, staying for any period, vacating or otherwise modifying the Confirmation Order, the District Court Order or the PI Trust or any of the Borrowers shall apply for authority to do so; provided , however , no Default shall occur under this subsection so long as (x) neither the District Court Order nor the Confirmation Order is stayed or vacated and (y) any such amendment, supplement or other modification is not adverse to the rights and interests of the Lenders under this Agreement and the other Loan Documents and could not reasonably be expected to have a Material Adverse Effect;

then, and in every such event (other than an event with respect to any Borrower described in clause (h) or (i) of this Section 7.01 ), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrowers’ Agent, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then out-standing to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued and unpaid interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers; and in case of any event with respect to any of the Borrowers described in clause (h) or (i) of this Section 7.01 , the Commitments shall automatically terminate and the unpaid principal of the Loans then outstanding, together with accrued and unpaid interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers. Upon the occurrence and the continuance of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, increase the rate of interest applicable to the Loans and other Obligations as set forth in Section 2.14(d) and exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC.

ARTICLE 8. THE ADMINISTRATIVE AGENT

Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf, including execution of the other Loan Documents, and to exercise such powers as

are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.

The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrowers or any Subsidiary of a Borrower or other Affiliate thereof as if it were not the Administrative Agent hereunder.

The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02 ), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Borrower or any of their respective Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02 ) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrowers’ Agent or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the creation, perfection or priority of Liens on the Collateral or the existence of the Collateral, or (vi) the satisfaction of any condition set forth in Article 4 or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall

not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the Issuing Bank and the Borrowers’ Agent. Upon any such resignation, the Required Lenders shall have the right, with the consent of the Borrowers’ Agent, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent which shall be a commercial bank or an Affiliate of any such commercial bank, which shall be reasonably satisfactory to Borrowers’ Agent. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers’ Agent and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or related agreement or any document furnished hereunder or thereunder.

Each Lender hereby agrees that (a) it has requested a copy of each Report prepared by or on behalf of the Administrative Agent; (b) the Administrative Agent (i) makes no representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report, and (ii) shall not be liable for any information contained in any Report; (c) the Reports are not comprehensive audits or examinations, and that any Person performing any

field examination will inspect only specific information regarding the Borrowers and will rely significantly upon the Borrowers’ books and records, as well as on representations of the Borrowers’ personnel and that the Administrative Agent undertakes no obligation to update, correct or supplement the Reports; (d) it will keep all Reports confidential and strictly for its internal use, not share the Report with any Borrower or any other Person except as otherwise permitted pursuant to this Agreement; and (e) without limiting the generality of any other indemnification provision contained in this Agreement, it will pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorney fees) incurred as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

The documentation agent, lead arranger, sole bookrunner, syndication agent and co-arranger, each in its capacity as such, shall not have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such.

ARTICLE 9. MISCELLANEOUS

SECTION 9.01 Notices . (a) Except in the case of notices and other communications expressly permitted to be given by telephone or by other electronic communication (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:

(i) if to any Borrower, to the Borrowers’ Agent at:

Kaiser Aluminum Corporation
27422 Portola Parkway, Suite 350
Foothill Ranch, CA 92610-2831
Attention: Office of the Chief Financial Officer
Facsimile No: (949) 636-1930

with a copy to:

Jones Day
77 West Wacker
Chicago, IL 60601-1692
Attention: Robert J. Graves
Facsimile No.: (312) 782-8585

(ii) if to the Administrative Agent, the Issuing Bank or the Swingline Lender, to JPMorgan Chase Bank, National Association at:

JPMorgan Chase Bank
National Association
2200 Ross Avenue, 6th Floor
Mail Code: TX1-2921
Dallas, TX 75201

Attention: Portfolio Manager
Facsimile No: (214) 965-2594

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP
333 West Wacker Drive
Chicago, IL 60606
Attention: Seth Jacobson
Facsimile No: (312) 407-0411

(iii) if to any other Lender, to it at its address or facsimile number set forth in its Administrative Questionnaire.

All such notices and other communications (i) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received or (ii) sent by facsimile shall be deemed to have been given when sent, provided that if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient.

(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications (including e-mail and internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article 2 or to compliance and no Event of Default certificates delivered pursuant to Section 5.01 unless expressly provided for therein or otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrowers’ Agent (on behalf of the Borrowers) may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. All such notices and other communications (i) sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in this Section 9.01 of notification that such notice or communication is available and identifying the website address therefor.

(c) Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.

SECTION 9.02 Waivers; Amendments . (a) No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the

exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section , and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.

(b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by each Borrower and the Required Lenders or, (ii) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Borrower(s) that are parties thereto, with the consent of the Required Lenders; provided , however , that no such waiver, modification or amendment shall, without the written consent of (1) 100% of Lenders, (A) increase the advance rates set forth in the definition of the term “Borrowing Base”, (B) except as provided in clause (d) of this Section , release all or substantially all of the Collateral, (C) change Section 2.19(b) or (d) in a manner that would alter the manner in which payments are shared, (D) modify any of the voting percentages, (E) amend the definition of “Class 1 Equipment Percentage”, “Class 2 Equipment Percentage”, “Class 3 Equipment Percentage”, “Class 4 Equipment Percentage”, “Class 5 Equipment Percentage”, “Class 6 Equipment Percentage”, or “Real Property Percentage”, (F) amend the definition of “Dominion Trigger Event” or “Dominion Release Event”, (G) release any Borrower as a party to, or from all of its obligations under, this Agreement (except as permitted under Section 6.02 ), or (H) amend this Section 9.02(b) to change the percentage of Lenders required to approve any waiver, amendment or modification, and (2) the Lender directly affected thereby, (A) except as expressly provided in Section 2.22 , increase the Commitment of a Lender (it being understood that a waiver of an Event of Default shall not constitute an increase in the Commitment of a Lender) or extend the expiry date of such Lender’s Commitment, or (B) reduce or forgive the principal amount of any Loan or Letter of Credit Disbursement or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, or postpone any scheduled date of payment of the principal amount of any Loan or Letter of Credit Disbursement, or any date for the payment of any interest, fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be.

(c) The Administrative Agent may (i) amend the Commitment Schedule to reflect assignments entered into pursuant to Section 9.04 and Facility Increases in accordance with Section 2.22 , and (ii) waive payment of the fee required under Section 9.04(b)(ii)(C) without obtaining the consent of any other party to this Agreement.

(d) The Lenders hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to release any Liens granted to the Administrative Agent by the Borrowers on any Collateral (i) upon the termination of the Commitment, payment and satisfaction in full in cash of all Secured Obligations (other than Unliquidated Obligations), and the cash collateralization of all Unliquidated Obligations in a manner satisfactory to each affected Lender, (ii) constituting property being sold, assigned, transferred or otherwise disposed of if the Borrower disposing of such property certifies to the Administrative Agent that such sale, assignment, transfer or disposition is made in compliance with the terms of this Agreement (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting property leased to a Borrower under a lease which has expired or been terminated in a transaction permitted under this Agreement or (iv) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Administrative Agent and the Lenders pursuant to Section 7.01 . Except as provided in the preceding sentence, the Administrative Agent will not release any Liens on Collateral without the prior written authorization of the Required Lenders; provided that , the Administrative Agent may in its discretion, release its Liens on Collateral valued in the aggregate not in excess of $2,000,000 during any calendar year without the prior written authorization of the Required Lenders. Any such release shall not in any manner discharge, affect, or impair the Secured Obligations or any Liens (other than those expressly being released) upon (or obligations of the Borrowers in respect of) all interests retained by the Borrowers, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral.

(e) If, in connection with any proposed amendment, waiver or consent requiring the consent of “100% of Lenders” or “the Lender directly affected thereby,” the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but not obtained being referred to herein as a “ Non-Consenting Lender ”), then, so long as the Administrative Agent is not a Non-Consenting Lender, the Borrowers’ Agent may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided that , concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrowers’ Agent and the Administrative Agent shall agree, as of such date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and Assumption and, to the extent any such assignee is not already a Lender, to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of clause (b) of Section 9.04 , and (ii) the Borrowers shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (1) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrowers hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 2.16 and 2.18 , and (2) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 2.17 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender.

SECTION 9.03 Expenses; Indemnity; Damage Waiver . (a) The Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication and distribution (including, without

limitation, via the internet or through a service such as Intralinks) of the credit facilities provided for herein, the preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement, collection or protection of its rights in connection with the Loan Documents, including its rights under this Section , or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit. Expenses being reimbursed by the Borrowers under this Section include, without limiting the generality of the foregoing, costs and expenses incurred in connection with:

(i) subject to Section 5.08 , appraisals of all or any portion of the Collateral (including reasonable travel, lodging, meals and other out of pocket expenses of the appraisers);

(ii) subject to Section 5.08 , field examinations and the preparation of Reports at either the Administrative Agent’s then customary charge (such charge is currently $850 per day (or portion thereof) for each Person employed by the Administrative Agent with respect to each field examination) or at the fee charged by a third party retained by the Administrative Agent, plus in each case travel, lodging, meals and other out of pocket expenses;

(iii) lien and title searches and title insurance;

(iv) taxes, fees and other charges, if any, for recording the Mortgages, filing financing statements and continuations, and other actions to perfect, protect, and continue the Administrative Agent’s Liens;

(v) sums paid or incurred to take any action required of any Borrower under the Loan Documents that such Borrower fails to pay or take; and

(vi) forwarding loan proceeds, collecting checks and other items of payment, and establishing and maintaining the accounts and lock boxes, and costs and expenses of preserving and protecting the Collateral.

All of the foregoing costs and expenses may be charged to the Borrowers as Revolving Loans or to another deposit account, in each case in accordance with Section 2.19(c) .

(b) The Borrowers shall jointly and severally indemnify the Administrative Agent, the Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, penalties, liabilities and related

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expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Borrower or any of their Subsidiaries, or any Environmental Liability related in any way to any Borrower or any of their Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, penalties, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

(c) To the extent that the Borrowers fail to pay any amount required to be paid by the Borrowers to the Administrative Agent, the Issuing Bank, the Swingline Lender or any Related Party of any of the foregoing Persons under paragraph (a) or (b) of this Section , each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank, the Swingline Lender or such Related Party, as the case may be, such Lender’s Commitment Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, penalty, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the Issuing Bank, the Swingline Lender or such Related Party in its capacity as such.

(d) To the extent permitted by applicable law, no Borrower shall assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

(e) All amounts due under this Section shall be payable promptly after written demand therefor.

SECTION 9.04 Successors and Assigns . (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by any Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section 9.04 (and any other attempted assignment or transfer by any party

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hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section ) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

(A) the Administrative Agent;

(B) the Issuing Bank; and

(C) the Borrowers’ Agent; provided that no consent of the Borrowers’ Agent shall be required for an Assignment to a Lender, an Affiliate of a Lender, an Approved Fund, or if an Event of Default has occurred, any other assignee.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment and Loans of any Class at the time owing to it, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Agent) shall not be less than $5,000,000 unless each of the Administrative Agent and the Borrowers’ Agent otherwise consents, provided that no such consent of the Borrowers’ Agent shall be required if an Event of Default has occurred and is continuing;

(B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or Commitment so assigned;

(C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and

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(D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section , from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.16 , 2.17, 2.18 and 9.03 ). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section .

(iv) The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at one of its offices in the United States of America a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of and accrued interest on the Loans and Letter of Credit Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section , the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.06 , 2.07(d) or (e) , 2.08(b) , 2.19(d) or 9.03(c) , the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of

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this Agreement unless it has been recorded in the Register as provided in this paragraph.

(vi) For the purposes of this Section 9.04(b) , the term “ Approved Fund ” has the following meaning: “ Approved Fund ” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

(c) (i) Any Lender may, without the consent of any Borrower, the Borrowers’ Agent, the Administrative Agent, the Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a “ Participant ”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrowers, the Borrowers’ Agent, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve any amendment, modification or waiver of any provision of any Loan Document; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this Section , the Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.16 , 2.17 and 2.18 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section . To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.19(c) as though it were a Lender.

(ii) A Participant shall not be entitled to receive any greater payment under Section 2.16 or 2.18 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the prior written consent of the Borrowers’ Agent). A Participant that would be a Foreign Lender or other Lender that would be required to furnish documentation pursuant to Section 2.18(e) if it were a Lender shall not be entitled to the benefits of Section 2.18 unless the Borrowers’ Agent is notified of the participation sold to such Participant and such Participant complies with Section 2.18(e) as though it were a Lender. In addition, by acquiring its participation, any Participant shall be deemed to have agreed to comply with Section 2.18(f) as if it were a Lender.

(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender,

104

including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.05 Survival . All covenants, agreements, representations and warranties made by the Borrowers and their Subsidiaries party thereto in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.16 , 2.17 , 2.18 and 9.03 and Article 8 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

SECTION 9.06 Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01 , this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 9.07 Severability . Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08 Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and

105

from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of any Borrower against any of and all the Secured Obligations held by such Lender, irrespective of whether or not such Lender shall have made any demand under the Loan Documents and although such obligations may be unmatured. The applicable Lender shall notify the Borrowers’ Agent and the Administrative Agent of such set-off or application, provided that any failure to give or delay in giving such notice shall not effect the validity of any such set-off or application under this Section 9.08 . The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have. NOTWITHSTANDING THE FOREGOING, AT ANY TIME THAT ANY OF THE OBLIGATIONS SHALL BE SECURED BY REAL PROPERTY LOCATED IN CALIFORNIA, NO LENDER SHALL EXERCISE A RIGHT OF SETOFF, LENDER’S LIEN OR COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION OR INSTITUTE ANY PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT UNLESS IT IS TAKEN WITH THE CONSENT OF THE LENDERS REQUIRED BY SECTION 9.02 OF THIS AGREEMENT, IF SUCH SETOFF OR ACTION OR PROCEEDING WOULD OR MIGHT (PURSUANT TO SECTIONS 580a, 580b, 580d AND 726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE OR SECTION 2924 OF THE CALIFORNIA CIVIL CODE, IF APPLICABLE, OR OTHERWISE) AFFECT OR IMPAIR THE VALIDITY, PRIORITY, OR ENFORCEABILITY OF THE LIENS GRANTED TO THE ADMINISTRATIVE AGENT PURSUANT TO THE COLLATERAL DOCUMENTS OR THE ENFORCEABILITY OF THE SECURED OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE BY ANY LENDER OR ANY SUCH RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE PARTIES AS REQUIRED ABOVE, SHALL BE NULL AND VOID. THIS PARAGRAPH SHALL BE SOLELY FOR THE BENEFIT OF EACH OF THE LENDERS.

SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process . (a) The Loan Documents (other than those containing a contrary express choice of law provision) shall be governed by and construed in accordance with the laws of the State of New York, but giving effect to federal laws applicable to national banks.

(b) Each Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any U.S. Federal or New York State court sitting New York, New York in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto 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. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Borrower or its properties in the courts of any jurisdiction.

106

(c) Each Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section . Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01 . Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 9.10 WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY (INCLUDING, WITHOUT LIMITATION, THE ADMINISTRATIVE AGENT) HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11 Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 9.12 Confidentiality . Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by Requirement of Law or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section 9.12 , to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to any Borrower and any of their obligations, so long as such counterparty agrees to be bound by the

107

provisions of this Section 9.12 , (g) with the consent of the Borrowers’ Agent, or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrowers or the Borrowers’ Agent. For the purposes of this Section , “ Information ” means all information received from the Borrowers relating to the Borrowers or their business, operations, assets, liabilities, financial condition or position, results or operations, or prospects, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the Borrowers or the Borrowers’ Agent. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

SECTION 9.13 Several Obligations; Nonreliance; Violation of Law . The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. Each Lender hereby represents that it is not relying on or looking to any margin stock for the repayment of the Borrowings provided for herein. Anything contained in this Agreement to the contrary notwithstanding, neither the Issuing Bank nor any Lender shall be obligated to extend credit to the Borrowers in violation of any Requirement of Law.

SECTION 9.14 USA PATRIOT Act . Each Lender that is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Act ”) hereby notifies the Borrowers that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of the Borrowers and other information that will allow such Lender to identify the Borrowers in accordance with the Act.

SECTION 9.15 Disclosure . Each Borrower and each Lender hereby acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with any of the Borrowers and their respective Affiliates.

SECTION 9.16 Appointment for Perfection . Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the Lenders, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession. Should any Lender (other than the Administrative Agent) obtain possession of any such Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent’s instructions.

SECTION 9.17 Interest Rate Limitation . Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law

108

(collectively the “ Charges ”), shall exceed the maximum lawful rate (the “ Maximum Rate ”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

ARTICLE 10. CASH MANAGEMENT

SECTION 10.01 Cash Management .

(a) The Borrowers and their Significant Subsidiaries (other than KACL and Anglesey) shall establish and maintain cash management services of a type and on terms reasonably satisfactory to the Administrative Agent at JPMorgan Chase or any Affiliate thereof on the Closing Date (each, a “ Cash Management Bank ”) or as promptly as practicable. All Cash Management Accounts shall be maintained solely at JPMorgan Chase or any Affiliate thereof (JPMorgan Chase agrees that such cash management services will be provided at reasonably competitive market rates), except for those accounts listed on Part I of Schedule 10.01 , each of which is subject to a control agreement in form and substance acceptable to the Administrative Agent. The Borrowers shall take such reasonable steps to enforce, collect, receive and cause all amounts owing on the Accounts of the Borrowers to be remitted directly to a Cash Management Account (other than any payroll, operating, checking or disbursement or petty cash account) or the Administrative Agent’s Account, and deposit or cause to be deposited promptly, and in any event no later than the first Business Day after the date of receipt thereof, all cash proceeds in respect of any Collateral and all collections and other amounts received by any Borrower (including payments made by the Account Debtors directly to any Borrower) into a Cash Management Account. All deposit and securities accounts of KACL and Anglesey as of the Closing Date are listed on Part II of Schedule 10.01 .

(b) Each Cash Management Bank shall, from and after the Closing Date, at the election of the Administrative Agent in its sole discretion, forward all cash deposited into the Cash Management Accounts covered thereby by electronic funds transfer (including, but not limited to, ACH transfers) on each Business Day to a designated Account of the Administrative Agent; provided , however that except during a Dominion Trigger Event all such cash deposited to such Account shall be deposited into the Borrowers’ designated operating account.

SECTION 10.02 Cash Dominion . During a Dominion Trigger Event, the Borrowers hereby irrevocably waive the right to direct the application of all funds in their respective Cash Management Accounts and agree that the Administrative Agent shall apply all payments in respect of any Secured Obligations and all available funds in the Cash Management Accounts on a daily basis in a manner provided in Section 2.11(b) .

109

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and the year first written.


		BORROWERS: KAISER ALUMINUM CORPORATION

		By:		/s/ Daniel J. Rinkenberger

		Name:		Daniel J. Rinkenberger
		Title:		Vice President and Treasurer

		KAISER ALUMINUM INVESTMENTS COMPANY

		By:		/s/ Daniel J. Rinkenberger

		Name:		Daniel J. Rinkenberger
		Title:		Vice President and Treasurer

		KAISER ALUMINUM FABRICATED PRODUCTS, LLC

		By:		/s/ Daniel J. Rinkenberger

		Name:		Daniel J. Rinkenberger
		Title:		Vice President and Treasurer

		KAISER ALUMINIUM INTERNATIONAL, INC.

		By:		/s/ Daniel J. Rinkenberger

		Name:		Daniel J. Rinkenberger
		Title:		Vice President and Treasurer

110


		JPMORGAN CHASE BANK, N.A., Individually and as Administrative Agent and Lender

		By:		/s/ Devin Mock

		Name:		Devin Mock
		Title:		Vice President

111


		LENDER:

		THE CIT GROUP/BUSINESS CREDIT, INC.

		By:		/s/ Chad Ramsey

		Name:		Chad Ramsey
		Title:		Vice President

112


		LENDER:

		BANK OF AMERICA, N.A.

		By:		/s/ Robert M. Dalton

		Name:		Robert M. Dalton
		Title:		Vice President

113


		LENDER:

		WACHOVIA BANK, N.A.

		By:		/s/ Gary D. Cassianni

		Name:		Gary D. Cassianni
		Title:		Vice President

114


		LENDER:

		WELLS FARGO FOOTHILL, LLC

		By:		/s/ Eunnie Kim

		Name:		Eunnie Kim
		Title:		Vice President

115


		LENDER:

		GMAC COMMERCIAL FINANCE LLC

		By:		/s/ David Grobosky

		Name:		David Grobosky
		Title:		Vice President

116


		LENDER:

		MERRILL LYNCH CAPITAL, A DIVISION OF MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.

		By:		/s/ Richard Holston

		Name:		Richard Holston
		Title:		Vice President

117


		LENDER:

		UBS LOAN FINANCE LLC

		By:		/s/ Richard L. Tavrow

		Name:		Richard L. Tavrow
		Title:		Director Banking Products Services U.S.

		By:		/s/ Christopher M. Atkin

		Name:		Christopher M. Atkin
		Title:		Associate Director Banking Products Services U.S.

118

ANNEX A

COMMITMENT SCHEDULE


Lender	Commitment
JPMorgan Chase Bank, N.A.	$	35,000,000
The CIT Group/Business Credit, Inc.	$	35,000,000
Bank of America	$	30,000,000
Wachovia Bank	$	25,000,000
Wells Fargo Foothill	$	20,000,000
GMAC	$	20,000,000
Merrill Lynch Capital Corporation	$	20,000,000
UBS	$	15,000,000

Total	$	200,000,000

119

Exhibit A-1 to the
Agreement

FORM OF REORGANIZATION PLAN

120

Exhibit A-2 to the
Agreement

FORM OF CONFIRMATION ORDER

121

Exhibit A-3 to the
Agreement

FORM OF DISTRICT COURT ORDER

122

Exhibit B to the
Agreement

FORM OF SECURITY AND
PLEDGE AGREEMENT

123

Exhibit C to the
Agreement

FORM OF OPINION OF COUNSEL

124

Exhibit D to the
Agreement

FORM OF ASSIGNMENT AND ASSUMPTION

125

Exhibit E to the
Agreement

FORM OF BORROWING BASE CERTIFICATE

126

Exhibit F to the
Agreement

FORM OF JOINDER AGREEMENT

127

Exhibit G to the
Agreement

FORM OF BORROWING REQUEST

128

Exhibit H to the
Agreement

FORM OF MORTGAGE

129

Exhibit I to the
Agreement

FORM OF INTERCOMPANY SUBORDINATION AGREEMENT

130

Exhibit J to the
Agreement

FORM OF SECOND AMENDED AND RESTATED FEE LETTER

131

Exhibit 10.2

$50,000,000

TERM LOAN AND GUARANTY AGREEMENT

among

KAISER ALUMINUM FABRICATED PRODUCTS, LLC

as Borrower

and

THE DIRECT AND INDIRECT PARENT COMPANIES AND CERTAIN OF THE
DIRECT OR INDIRECT SUBSIDIARIES OR AFFILIATES OF THE BORROWER
LISTED AS GUARANTORS ON THE SIGNATURE PAGES HERETO

as Guarantors

and

THE LENDERS PARTY HERETO

and

JPMORGAN CHASE BANK, N.A.
as Administrative Agent and Documentation Agent

and

WILMINGTON TRUST COMPANY
as Collateral Agent

and

J.P. MORGAN SECURITIES INC.,
as Lead Arranger, Sole Bookrunner

and

Syndication Agent

and

THE CIT GROUP/BUSINESS CREDIT, INC.
as Co-Arranger
Dated as of July 6, 2006

TABLE OF CONTENTS


		Page
ARTICLE I DEFINITIONS			1
Section 1.01	Defined Terms		1
Section 1.02	Classifications of Loans; Terms Generally		24
Section 1.03	Obligations Not Affected		25

ARTICLE II AMOUNT AND TERMS OF CREDIT			25
Section 2.01	Commitments		25
Section 2.02	Term Loans		25
Section 2.03	Notice of Borrowing; Funding of Term Loans		26
Section 2.04	Interest Elections		26
Section 2.05	Repayment and Amortization of Term Loans; Evidence of Debt		27
Section 2.06	Prepayment of Term Loans		28
Section 2.07	Fees		31
Section 2.08	Interest		31
Section 2.09	Alternate Rate of Interest		31
Section 2.10	Increased Costs		32
Section 2.11	Breakfunding Payments		33
Section 2.12	Taxes		33
Section 2.13	Payments Generally; Allocation of Proceeds; Sharing of Set-offs		35
Section 2.14	Mitigation Obligations; Replacement of Lenders		37
Section 2.15	Indemnity for Returned Payments		37

ARTICLE III REPRESENTATIONS AND WARRANTIES			38
Section 3.01	Organization and Authority		38
Section 3.02	Due Execution		38
Section 3.03	Statements Made		39
Section 3.04	Financial Statements		39
Section 3.05	Real Property		39
Section 3.06	Liens		40
Section 3.07	Compliance with Law		40
Section 3.08	Insurance		40
Section 3.09	Use of Proceeds		40
Section 3.10	Litigation		40
Section 3.11	Investment and Holding Company Status		40
Section 3.12	Taxes		40
Section 3.13	ERISA		41
Section 3.14	Disclosure		41
Section 3.15	Material Agreements		41
Section 3.16	Reportable Transaction		41
Section 3.17	Capitalization and Subsidiaries		41
Section 3.18	Common Enterprise		42

TABLE OF CONTENTS
(continued)


		Page
Section 3.19	[Intentionally omitted.]		42
Section 3.20	Labor Disputes		42
Section 3.21	Environmental Matters		42
Section 3.22	Confirmation Order; District Court Order		44
Section 3.23	Consummation Date		44
Section 3.24	Solvency		44
Section 3.25	Security Interest in Collateral		44

ARTICLE IV CONDITIONS OF LENDING			45
Section 4.01	Conditions Precedent to Closing Date		45
Section 4.02	Conditions Precedent to Funding Date		49

ARTICLE V AFFIRMATIVE COVENANTS			49
Section 5.01	Financial Statements, Reports, etc		49
Section 5.02	Corporate Existence		52
Section 5.03	Insurance		53
Section 5.04	Obligations and Taxes		53
Section 5.05	Notice of Event of Default, etc		53
Section 5.06	Access to Books and Records		54
Section 5.07	Projections		54
Section 5.08	Maintenance of Properties and Intellectual Property Rights		54
Section 5.09	Compliance with Laws		54
Section 5.10	Use of Proceeds		54
Section 5.11	Additional Collateral; Further Assurances		54
Section 5.12	Environmental Covenant		56

ARTICLE VI NEGATIVE COVENANTS			56
Section 6.01	Liens		56
Section 6.02	Merger, etc		57
Section 6.03	Indebtedness		57
Section 6.04	Guarantees and Other Liabilities		58
Section 6.05	Dividends; Capital Stock		59
Section 6.06	Transactions with Affiliates		59
Section 6.07	Investments, Loans, Advances, Guaranties and Acquisitions		59
Section 6.08	Creation of Subsidiaries		61
Section 6.09	Disposition of Assets		61
Section 6.10	Nature of Business		61
Section 6.11	Restrictive Agreements		61
Section 6.12	Prepayment of Indebtedness; Subordinated Indebtedness		62
Section 6.13	Fixed Charge Coverage		62
Section 6.14	Amendments to Orders		63

TABLE OF CONTENTS
(continued)


		Page

ARTICLE VII EVENTS OF DEFAULT			63
Section 7.01	Events of Default		63

ARTICLE VIII THE AGENTS			66

ARTICLE IX MISCELLANEOUS			70
Section 9.01	Notices		70
Section 9.02	Waivers; Amendments		72
Section 9.03	Expenses; Indemnity; Damage Waiver		74
Section 9.04	Successors and Assigns		75
Section 9.05	Survival		78
Section 9.06	Counterparts; Integration; Effectiveness		78
Section 9.07	Severability		79
Section 9.08	Right of Setoff		79
Section 9.09	Governing Law; Jurisdiction; Consent to Service of Process		80
Section 9.10	WAIVER OF JURY TRIAL		80
Section 9.11	Headings		81
Section 9.12	Confidentiality		81
Section 9.13	Several Obligations; Nonreliance; Violation of Law		81
Section 9.14	USA PATRIOT Act		81
Section 9.15	Disclosure		82
Section 9.16	Appointment for Perfection		82
Section 9.17	Interest Rate Limitation		82

ARTICLE X LOAN GUARANTY			82
Section 10.01	Guaranty		82
Section 10.02	Guaranty of Payment		83
Section 10.03	No Discharge or Diminishment of Guaranty		83
Section 10.04	Defenses Waived		83
Section 10.05	Rights of Subrogation		84
Section 10.06	Reinstatement; Stay of Acceleration		84
Section 10.07	Information		84
Section 10.08	Termination		84
Section 10.09	Maximum Liability		85
Section 10.10	Contribution		85
Section 10.11	Liability Cumulative		86

iii


ANNEX A	-	Commitment Schedule
ANNEX B	-	Notice of Borrowing
EXHIBIT A-1	-	Form of Reorganization Plan
EXHIBIT A-2	-	Form of Confirmation Order
EXHIBIT A-3	-	Form of District Court Order
EXHIBIT B	-	Form of Security and Pledge Agreement
EXHIBIT C	-	Form of Opinion of Counsel
EXHIBIT D	-	Form of Assignment and Assumption
EXHIBIT E	-	Form of Joinder Agreement
EXHIBIT F	-	Form of Mortgage
EXHIBIT G	-	Form of Intercompany Subordination Agreement
EXHIBIT H	-	Form of Second Amended and Restated Fee Letter

SCHEDULE 1.01(a)	-	Designated Asset Sales
SCHEDULE 1.01(b)	-	Restructuring Transactions
SCHEDULE 3.05	-	Real Property
SCHEDULE 3.06	-	Liens
SCHEDULE 3.07	-	Compliance with Laws
SCHEDULE 3.10	-	Litigation
SCHEDULE 3.12	-	Taxes
SCHEDULE 3.15	-	Material Agreements
SCHEDULE 3.17	-	Capitalization and Subsidiaries
SCHEDULE 3.20	-	Labor Disputes
SCHEDULE 3.21	-	Environmental Matters
SCHEDULE 4.01(e)	-	Mortgaged Properties
SCHEDULE 4.01(l)	-	Material Consents
SCHEDULE 6.03	-	Existing Indebtedness
SCHEDULE 6.07	-	Existing Investments
SCHEDULE 6.09	-	Disposition of Assets
SCHEDULE 6.11	-	Restrictive Agreements

TERM LOAN AND GUARANTY AGREEMENT

TERM LOAN AND GUARANTY AGREEMENT, dated as of July 6, 2006 among KAISER ALUMINUM FABRICATED PRODUCTS, LLC, a Delaware limited liability company (the “ Borrower ”), certain of the direct and indirect parent companies of the Borrower and certain of the direct or indirect subsidiaries or affiliates of the Borrower listed as “Guarantors” on the signature pages hereto (each a “ Guarantor ” and collectively, the “ Guarantors ”), the financial institutions and other Persons from time to time party hereto (the “ Lenders ”), JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity, the “ Administrative Agent ”) for the Lenders, and WILMINGTON TRUST COMPANY, as collateral agent (in such capacity, together with its successors and assigns, the “ Collateral Agent ”) for the Administrative Agent and the Lenders.

INTRODUCTORY STATEMENT

The Borrower has requested that the Lenders make available to the Borrower term loans in an aggregate principal amount of $50,000,000, which term loans will be used by the Borrower for the purposes set forth in Section 3.09 .

The Guarantors have agreed to guarantee all of the Obligations as set forth in Article X .

The Borrower and the Guarantors have agreed to secure all of the Obligations by granting to the Collateral Agent, on behalf of the Lenders, a security interest in and Lien upon the Collateral as set forth in the Security and Pledge Agreement and any Mortgages.

Accordingly, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Defined Terms . As used in this Agreement, the following terms have the meanings specified below:

“ ABR Loan ” shall mean any Term Loan (or portion thereof) bearing interest at a rate determined by reference to the Alternate Base Rate in accordance with the provisions of Article II .

“ Adjusted LIBO Rate ” shall mean, with respect to any Eurodollar Loan for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the LIBO Rate for such interest period multiplied by the Statutory Reserve Rate.

“ Administrative Agent ” shall have the meaning set forth in the first paragraph of this Agreement and together with its successors appointed pursuant to Article VIII .

“ Administrative Questionnaire ” shall mean an Administrative Questionnaire in a form supplied by the Administrative Agent.

“ Affiliate ” shall mean, as to any Person, any other Person which, directly or indirectly, is in Control of, is Controlled by, or is under common Control with, such Person.

“ Agents ” shall mean, collectively, the Administrative Agent and the Collateral Agent and “ Agent ” shall mean, individually, the Administrative Agent and/or the Collateral Agent, as the context may require.

“ Agreement ” shall mean this Term Loan and Guaranty Agreement, as the same may be amended, restated, modified or supplemented from time to time.

“ Applicable Margin ” shall mean (a) 2.50%, in the case of ABR Loans and (b) 4.25%, in the case of Eurodollar Loans.

“ Assignment and Assumption ” shall mean an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04 ), and accepted by the Administrative Agent, substantially in the form of Exhibit D or any other form approved by the Administrative Agent.

“ Bankruptcy Code ” shall mean The Bankruptcy Reform Act of 1978, as heretofore and hereafter amended, and codified as 11 U.S.C. Section 101 et seq .

“ Bankruptcy Court ” shall mean the United States Bankruptcy Court for the District of Delaware or any other court having jurisdiction over the Cases from time to time.

“ Board ” shall mean the Board of Governors of the Federal Reserve System of the United States.

“ Borrower ” shall have the meaning as set forth in the first paragraph of this Agreement.

“ Capital Expenditures ” shall mean, without duplication, any actual cash expenditure for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of Parent and its Subsidiaries prepared in accordance with GAAP.

“ Cases ” shall mean, collectively, the jointly administered cases filed by Parent and certain of its Subsidiaries under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.

“ CERCLA ” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended or otherwise modified from time to time.

“ CERCLIS ” shall mean the Comprehensive Environmental Response Compensation Liability Information System List.

“ Change in Law ” shall mean (a) the adoption of any law, rule or regulation after the date of this Agreement; (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement; or (c) compliance by any Lender (or, for purposes of Section 2.10(b) , by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

“ Change of Control ” shall mean (a) the acquisition after the date hereof of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) (other than the VEBA Trusts), of shares representing more than 45% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of Parent; (b) the occupation of a majority of the seats (other than vacant seats) on the Board of Directors of Parent by Persons who were neither (1) nominated by the Board of Directors of Parent nor (2) appointed by directors so nominated or (c) the acquisition of direct or indirect Control of Parent by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof).

“ Claims ” shall have the meaning set forth in Section 101(5) of the Bankruptcy Code.

“ Closing Date ” shall mean the date on which this Agreement has been executed and the conditions precedent to the effectiveness of this Agreement set forth in Section 4.01 have been satisfied or waived, which date shall occur on the date requested by Parent following the date of entry of the Confirmation Order and the District Court Order but in no event later than the earlier of (i) the date that is thirty (30) days after the Consummation Date and (ii) August 31, 2006.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“ Collateral ” shall mean any and all property owned, leased or operated by a Person granted as security for the Obligations pursuant to any other Loan Document and any and all other property of the Borrower or any Guarantor, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of the Collateral Agent, on behalf of itself and the Lenders, to secure the Obligations.

“ Commitment ” shall mean (a) with respect to any Lender, the aggregate commitment of such Lender to make Term Loans as set forth on Annex A — Commitment Schedule or in the most recent Assignment and Assumption executed by such Lender and (b) as to all Lenders, the aggregate commitment of all Lenders to make Term Loans, which aggregate commitment shall be $50,000,000 on the date of this Agreement. After advancing the Term Loans, each reference to a Lender’s Commitment shall refer to that Lender’s Applicable Percentage of the Term Loans.

“ Commitment Letter ” shall mean that certain Commitment Letter, dated January 14, 2005, among JPMorgan Chase, JPMSI, CIT, Parent and KACC, as amended by Amendment No. 1 thereto, dated January 10, 2006, Amendment No. 2 thereto, dated April 26, 2006, and Amendment No. 3 thereto, dated April 26, 2006.

“ Commitment Schedule ” shall mean the Schedule attached as Annex A hereto and identified as the Commitment Schedule.

“ Commodity Swap Agreement ” shall mean any Swap Agreement involving or settled by reference to one or more commodities.

“ Confirmation Order ” shall mean the order confirming the Reorganization Plan, attached as Exhibit A-2 , entered by the Bankruptcy Court on February 6, 2006.

$50,000,000 for each day during the ninety (90) consecutive calendar day period ending on such date after the immediately preceding Covenant Trigger Event and (ii) at least 365 days have elapsed since the date of the last Covenant Release Event, if any.

“ Covenant Trigger Event ” shall mean any date on which “Availability” (as defined in the Revolving Loan Documents) has been less than $35,000,000 for any period of five (5) consecutive Business Days ending on such date. A Covenant Trigger Event shall be deemed to have occurred and be continuing from the occurrence of such Covenant Trigger Event up to but not including the first date upon which a Covenant Release Event occurs following such Covenant Trigger Event.

“ Default ” shall mean any event or condition which constitutes an Event of Default or which upon notice, lapse of time, or both would, unless cured or waived, constitute an Event of Default.

“ Departing Lender ” shall have the meaning given to such term in Section 2.14 .

“ Designated Asset Sale shall mean each asset sale that is described on Schedule 1.01(a) hereto.

“ Disqualified Indebtedness ” shall mean any Indebtedness for borrowed money and any bond, note, indenture or similar instrument issued, assumed or acquired in connection with an acquisition if the instrument governing such Indebtedness or other obligation (i) has a scheduled maturity date earlier than ninety (90) days after the Maturity Date or (ii) requires the Borrower or any Guarantor to make any scheduled or mandatory payments of principal or to otherwise purchase or redeem, or make sinking fund or other similar payments with respect to, such Indebtedness earlier than ninety (90) days after the Maturity Date; provided that the amount of such Indebtedness under this clause (ii) shall be the aggregate principal amount of all such scheduled or mandatory payments, purchases, redemptions, or sinking fund or other similar payments required to be made earlier than ninety (90) days after the Maturity Date.

“ District Court ” shall mean the United States District Court for the District of Delaware.

“ District Court Order ” shall mean the order affirming the Confirmation Order, attached as Exhibit A-3 , entered by the District Court on May 11, 2006.

“ Dollars ” and “ $ ” shall mean lawful money of the United States of America.

“ EBITDA ” shall mean, for Parent and its Subsidiaries on a consolidated basis, for any period, in each case as determined in accordance with GAAP, Net Income for such period plus , (a) to the extent deducted in determining Net Income for such period, (i) Interest Expense, (ii) expense or benefit for income taxes, (iii) depreciation, (iv) amortization, (v) extraordinary losses incurred and (vi) any other non-cash charges except to the extent that any such non-cash charge (x) could reasonably be expected to result in a cash payment during the term of this Agreement or (y) represents amortization of a prepaid cash item paid in a prior period, minus , (b) to the extent included in determining Net Income, extraordinary gains realized.

“ EDGAR ” shall mean the SEC’s Electronic Data Gathering Analysis and Retrieval System (or any successor system).

“ Environmental Laws ” shall mean all applicable federal, state, local or foreign statutes, laws, regulations, ordinances, codes, rules, requirements and guidelines (including consent decrees and administrative orders to which the Borrower, any Guarantor, or any of their Subsidiaries, is subject) relating to protection of human health or the environment or imposing liability or standards of conduct concerning any Hazardous Material, as any of the foregoing may be from time to time amended or supplemented.

“ Environmental Liability ” shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, the Guarantors or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law; (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials; (c) exposure to any Hazardous Materials; (d) the release or threatened release of any Hazardous Materials into the environment; or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“ ERISA Affiliate ” shall mean each person (as defined in Section 3(9) of ERISA) which together with the Borrower or any Guarantor or any Subsidiary of the Borrower or any Guarantor would be deemed to be a single employer within the meaning of Section 414(b), (c), (m), or (o) of the Code.

“ Eurodollar Loan ” shall mean any Term Loan (or a portion thereof) bearing interest at a rate determined by reference to the Adjusted LIBO Rate in accordance with the provisions of Article II .

“ Event of Default ” shall have the meaning given such term in Article VII .

proceeds received in connection with such transaction or series of related transactions is less than $500,000.

“ Excluded Taxes ” shall mean, with respect to any Agent, any Lender, or any other recipient of any payment to be made by or on account of any obligation of the Borrower or any Guarantor hereunder, (a) Taxes imposed on or measured by its overall net income or its overall gross income (other than withholding Taxes) and franchise Taxes imposed in lieu thereof by the United States of America or by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its lending office or principal executive office is located; (b) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction in which such lending office or principal executive office is located; and (c) in the case of a Lender, any withholding Tax that is imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Lender’s failure to comply with Section 2.12(e) , provided however , that an assignee of a Lender or a newly designated lending office shall not be subject to this clause (c) to the extent of any additional amounts which at the time of designation or assignment the designating or assigning Lender was entitled to receive that were not subject to this clause (c) .

“ Existing Credit Agreement ” shall mean that certain Secured Super-Priority Debtor-in-Possession Credit Agreement dated as of February 11, 2005, as amended, among the “Borrowers” (as defined therein), the “Guarantors” (as defined therein), the Existing Lenders and JPMorgan Chase, as administrative agent.

“ Existing Lenders ” shall mean the financial institutions from time to time party to the Existing Credit Agreement.

“ Extraordinary Receipts ” shall mean any Net Proceeds received by the Borrower or any Guarantor not in the ordinary course of business, including, without limitation, (i) foreign, United States, state or local tax refunds, (ii) pension plan reversions, (iii) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, (iv) indemnity payments, (v) any purchase price adjustment received in connection with any purchase agreement, and (vi) any proceeds from any escrow; provided , however , that such indemnity payments or proceeds shall not include proceeds from any insurance for asbestos claims and demands, silica claims and demands, coal tar pitch volatile claims and demands and noise induced hearing loss claims in escrow as of the date hereof or later received.

by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“ Fee Letter ” shall mean, collectively (i) that certain Second Amended and Restated Fee Letter, dated July 6, 2006, among JPMorgan Chase, JPMSI, Parent and KACC, (ii) that certain Amendment Fee Letter, dated December 23, 2005, among JPMorgan Chase, Parent and KACC, and (iii) that certain Second Amendment Fee Letter, dated April 26, 2006, among JPMorgan Chase, Parent and KACC.

“ Fees ” shall mean all fees referred to herein, in the Fee Letter or in any other Loan Document.

“ Final Funding Date ” shall mean the earlier of (i) the date that is thirty (30) days after the Consummation Date and (ii) August 31, 2006.

“ Financial Officer ” shall mean, with respect to any Person, the chief financial officer, principal accounting officer, treasurer, assistant treasurer or controller of such Person or any other Person who performs a function similar to any of the foregoing and has been identified in writing to the Administrative Agent as a “Financial Officer” hereunder.

“ Fiscal Month ” shall mean any of the monthly accounting periods of Parent and its Subsidiaries.

“ Fiscal Quarter ” shall mean any of the quarterly accounting periods of Parent and its Subsidiaries, ending on March 31, June 30, September 30 and December 31 of each year.

“ Fiscal Year ” shall mean any of the annual accounting periods of Parent and its Subsidiaries ending on December 31 of each year.

“ Fixed Charge Coverage Ratio ” shall mean the ratio, determined as of the end of any period, of (a) EBITDA for the period of determination minus Net Capital Expenditures for such period of determination to (b) Fixed Charges for such period of determination, all calculated for Parent and its Subsidiaries on a consolidated basis in accordance with GAAP; provided that for periods ending prior to the end of the fourth full Fiscal Quarter following the Closing Date, the Borrower may submit a written request to the Administrative Agent proposing adjustments to EBITDA and Fixed Charges for purposes of calculating the Fixed Charge Coverage Ratio for the applicable period to more accurately reflect the allocation or exclusion of one-time charges over two or more Fiscal Quarters and, if the Required Lenders consent to such adjustments, such adjustment shall be made for calculating Fixed Charge Coverage Ratio for the applicable period.

“ Fixed Charges ” shall mean, for Parent and its Subsidiaries on a consolidated basis, with reference to any period, without duplication, cash Interest Expense paid during such period, plus scheduled principal payments on Indebtedness (including rent or other payments on Capital Lease Obligations other than imputed interest components thereof) made during such period, plus , if and to the extent “Availability” (as defined in the Revolving Loan Documents) at the time of measurement is less than the amount of the “Borrowing Base” (as defined in the Revolving Loan Documents) attributable at such time to equipment and real estate, the reduction

in Availability during such period resulting from the amortization of the components of the Borrowing Base consisting of equipment and real estate, plus , expense for income taxes paid in cash during such period, plus dividends or other distributions paid in cash to holders of Equity Interests in Parent during such period (excluding distributions paid to holders of Equity Interests in Parent pursuant to the Reorganization Plan on account of Claims in the Cases).

“ Foreign Lender ” shall mean any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located. For purposes of this definition, the United States of America, each State thereof, and the District of Columbia shall be deemed to constitute a single jurisdiction.

“ Funding Date ” shall mean the date on which Term Loans to be made pursuant to this Agreement are funded, and the conditions precedent to the making of the Term Loans set forth in Section 4.02 have been satisfied or waived, which date shall occur on the date requested pursuant to Section 2.03 by the Borrower following the date of entry of the Confirmation Order and the District Court Order but in no event later than the Final Funding Date.

“ GAAP ” shall mean generally accepted accounting principles in the United States of America as in effect from time to time applied in accordance with Section 1.02 .

“ Guaranteed Obligations ” shall have the meaning specified in Section 10.01 .

“ Guarantor ” shall have the meaning set forth in the first paragraph of this Agreement.

“ Indebtedness ” shall mean, at any time and with respect to any Person, without duplication, (i) all indebtedness of such Person for borrowed money or with respect to deposits or advances of any kind; (ii) all obligations of such Person for the deferred purchase price of property or services (other than accounts payable arising out of the purchases of property, including inventory, and services purchased, and expense accruals and deferred compensation items in the ordinary course of business); (iii) all obligations of such Person upon which interest changes are customarily paid; (iv) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments; (v) all indebtedness of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person; (vi) all Capital Lease Obligations of such Person; (vii) all reimbursement, payment or similar obligations of such Person, contingent or otherwise, under acceptance, letter of credit or similar facilities; (viii) all Swap Obligations of such Person (and the amount of Indebtedness attributable to all Swap Obligations of such Person shall be deemed to be the Net Mark-to-Market Exposure with respect thereto); (ix) all Guarantees by such Person of Indebtedness of others; (x) all Indebtedness referred to in clauses (i) through (ix) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness, provided that , if such Person has not assumed such obligations, then the amount of Indebtedness of such Person for purposes of this clause (x) shall be equal to the lesser of the amount of the obligations of the holder of such obligations and the fair market value of the assets of such Person which secure such obligations; (xi) obligations under any liquidated earn-out; and (xii) obligations of such Person to purchase securities or other property prior to the date that is six months after the Maturity Date arising out of or in connection with the sale of the same or substantially similar securities or property or any other Off-Balance Sheet Liability. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“ Indemnified Taxes ” shall mean Taxes other than Excluded Taxes.

“ Indemnitee ” shall have the meaning given to such term in Section 9.03(b) .

“ Insufficiency ” shall mean, with respect to any Plan, its “amount of unfunded benefit liabilities” within the meaning of Section 4001(a)(18) of ERISA, if any.

“ Intercompany Subordination Agreement ” shall have the meaning given to such term in Section 6.03 .

“ Intercreditor Agreement ” shall mean the Intercreditor Agreement dated the date hereof, between the Collateral Agent and JPMorgan Chase, as agent for the holders of the “Secured Obligations” (as defined in the Revolving Loan Documents).

“ Interest Election Request ” shall mean a request by the Borrower to convert or continue a Term Loan in accordance with Section 2.04 .

“ Interest Expense ” shall mean, with reference to any period, the interest expense of Parent and its Subsidiaries calculated on a consolidated basis in conformity with GAAP for such period.

“ Interest Period ” shall mean, as to any Eurodollar Loan, the period commencing on the date of such Eurodollar Loan (including as a result of a refinancing of ABR Loans) or on the last day of the preceding Interest Period applicable to such Eurodollar Loan and ending on the numerically corresponding day (or if there is no corresponding day, the last day) in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect in the related notice delivered pursuant to Sections 2.04 ; provided , however , that (i) if any Interest Period would end on a day which shall not be a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the immediately preceding Business Day, and (ii) no Interest Period shall end later than the Maturity Date.

“ Investments ” shall have the meaning given such term in Section 6.07 .

“ Joinder Agreement ” shall have the meaning set forth in Section 5.11(a) .

“ JPMorgan Chase ” shall mean JPMorgan Chase Bank, N.A.

“ JPMSI ” shall mean J.P. Morgan Securities Inc.

“ KACC ” shall mean Kaiser Aluminum & Chemical Corporation, a Delaware corporation.

“ KACL ” shall mean Kaiser Aluminum Canada Limited, an Ontario corporation.

“ Kaiser Bauxite ” shall mean Kaiser Bauxite Company, a Nevada corporation.

“ Kaiser Bellwood ” shall mean Kaiser Bellwood Corporation, a Delaware corporation.

“ Lenders ” shall mean the Persons listed on the Commitment Schedule and any other Person that shall have become a party hereto as a Lender pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

“ LIBO Rate ” shall mean, with respect to any Eurodollar Loan for any Interest Period, the rate appearing on Page 3750 of the Dow Jones Market Service (or on any successor page or any successor to such service or any substitute page or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits (for delivery on the first day of such period) with a term equivalent to such Interest Period. In the event that such rate is not available at such time for any reason, then the “ LIBO Rate ” with respect to such Eurodollar Loan for such Interest Period shall be the rate at which dollar deposits of comparable size and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period.

“ Loan Documents ” shall mean this Agreement, the Security and Pledge Agreement, the Mortgages, the Intercreditor Agreement and any other instrument or agreement executed and delivered to the Administrative Agent, the Collateral Agent or any Lender in connection herewith (including, all other pledges, powers of attorney, consents, assignments, contracts, notices, and letter of credit agreements whether heretofore, now or hereafter executed by or on behalf of the Borrower or any Guarantor, or any Responsible Officer of the Borrower or any Guarantor, and delivered to the Administrative Agent, the Collateral Agent or any Lender in connection with the Agreement or the transactions contemplated thereby). Any reference in the Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to the Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

“ Material Adverse Effect ” shall mean a material adverse effect on (a) the business, assets, operations, prospects or financial condition, of the Borrower and the Guarantors taken as a whole, (b) the ability of the Borrower and the Guarantors taken as a whole to perform any obligations under the Loan Documents, (c) the Collateral, or the Collateral Agent’s Liens (on behalf of itself, the Administrative Agent and the Lenders) on the Collateral or the priority of such Liens, or (d) the rights of or benefits available to the Administrative Agent, the Collateral Agent or the Lenders hereunder or under any other Loan Document.

“ Material Indebtedness ” shall mean any Indebtedness (other than the Term Loans) of the Borrower, any of the Guarantors, or any of the Subsidiaries of the Borrower or any Guarantor in an aggregate principal amount exceeding $20,000,000. For purposes of determining Material Indebtedness, the “obligations” of the Borrower, any Guarantor, or any Subsidiary of the Borrower or any Guarantor in respect of any Swap Agreement at any time shall be the Net Mark-to-Market Exposure that the Borrower, such Guarantor or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

“ Maturity Date ” shall mean July 6, 2011.

“ Maximum Liability ” shall have the meaning specified in Section 10.09 .

“ McNeil Appeal ” shall mean the appeal of the District Court Order filed by Duncan J. McNeil and pending before the Third Circuit Court of Appeals.

“ Mortgage ” shall mean any mortgage, deed of trust or other agreement which conveys or evidences a Lien in favor of the Collateral Agent, for the benefit of the Collateral Agent, the Administrative Agent and the Lenders, on real Property of the Borrower or any Guarantor, including any amendment, modification or supplement thereto.

“ Multiemployer Plan ” shall mean a “ multiemployer plan ” as defined in Section 4001(a)(3) of ERISA, which is maintained or contributed to by (or to which there is an obligation to contribute of) the Borrower or any Guarantor or a Subsidiary of the Borrower or any Guarantor or an ERISA Affiliate, and each such plan for the five-year period immediately following the latest date on which the Borrower, any Guarantor or a Subsidiary of the Borrower

or any Guarantor or an ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan.

“ Multiple Employer Plan ” shall mean a Single Employer Plan, which (i) is maintained for employees of the Borrower or any Guarantor or an ERISA Affiliate and at least one person (as defined in Section 3(9) of ERISA) other than the Borrower or any Guarantor and its ERISA Affiliates or (ii) was so maintained and in respect of which the Borrower or any Guarantor or an ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such Plan has been or were to be terminated.

“ National Priorities List ” shall mean the list established pursuant to Section 105 of CERCLA, as amended, modified, supplemented, or replaced from time to time.

“ Net Income ” shall mean, with reference to any period, the net income (or loss) of Parent and its Subsidiaries (other than any Excluded Subsidiary and its Subsidiaries) calculated on a consolidated basis for such period.

“ Net Mark-to-Market Exposure ” shall mean, with respect to any Person, as of any date of determination, the excess (if any) of all unrealized losses over all unrealized profits of such Person arising from Swap Agreement transactions. As used in this definition, “unrealized losses” means the fair market value of the cost to such Person of replacing such Swap Agreement transactions as of the date of determination (assuming the Swap Agreement transactions were to be terminated as of that date), and “unrealized profits” means the fair market value of the gain to such Person of replacing such Swap Agreement transactions as of the date of determination (assuming such Swap Agreement transactions were to be terminated as of that date).

“ Net Proceeds ” shall mean, if in connection with (a) an asset disposition, cash proceeds received by the Borrower or any Guarantor net of (i) commissions, attorneys’ fees, accountants’ fees, investment banking fees and other reasonable and customary transaction costs, fees and expenses properly attributable to such transaction and payable by the Borrower or such Guarantor in connection therewith (in each case, paid to non-Affiliates of the Borrower or such Guarantor); (ii) taxes actually payable in respect thereof and reasonable estimates of taxes actually payable with respect to such transaction in the tax year of such transaction or in the following tax year; (iii) amounts payable to holders of senior Liens on such asset (to the extent such Liens constitute Permitted Liens or other Liens permitted under Section 6.01 hereunder), if any; (iv) an appropriate reserve for income taxes in accordance with GAAP established in connection therewith; and (v) amounts escrowed or reserved against indemnification, obligations or purchase price adjustments; provided , however , that Net Proceeds shall not include any such amounts so received by the Borrower or any Guarantor in respect of any asset disposition made in any Fiscal Year until the aggregate amount of cash received by the Borrower and all Guarantors in respect of asset dispositions during such Fiscal Year exceeds $2,500,000 (excluding cash received in connection with any Excluded Asset Disposition), in which case Net Proceeds shall constitute solely such amounts in excess thereof; or (b) the issuance or incurrence

of Indebtedness, cash proceeds net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith, (c) an equity issuance, cash proceeds net of underwriting discounts and commissions and other reasonable costs paid to non-Affiliates in connection therewith, provided , however , that Net Proceeds shall not include any cash received in connection with the exercise of stock options granted to employees or directors of the Borrower, any Guarantor or any of their respective Subsidiaries, or (d) Extraordinary Receipts received by the Borrower or any Guarantor, the amount of cash proceeds received (directly or indirectly) from time to time by or on behalf of the Borrower or such Guarantor or any of their Subsidiaries after deducting therefrom only (i) expenses related thereto incurred by such Person or such Subsidiary in connection therewith, (ii) transfer taxes paid by such Person or such Subsidiary in connection therewith, (iii) net income taxes to be paid in connection therewith (after taking into account any tax credits or deductions and any tax sharing arrangements), and (iv) that portion of the cash proceeds received which such Person or such Subsidiary is legally obligated pursuant to any agreement binding on such Person or such Subsidiary entered into prior to the date hereof to pay to another Person; provided , however , that Net Proceeds shall not include any such amounts so received by any such Person or any Subsidiary in respect of any Extraordinary Receipt in any Fiscal Year until the aggregate amount of cash received by the Borrower and all Guarantors, collectively, in respect of Extraordinary Receipts during such Fiscal Year exceeds $2,500,000, in which case Net Proceeds shall constitute solely such amounts in excess thereof.

“ Non-Consenting Lender ” shall have the meaning specified in Section 9.02(e) .

“ Non-Paying Guarantor ” shall have the meaning specified in Section 10.10 .

“ Notice of Borrowing ” shall mean a Notice of Borrowing in the form of Annex B .

“ Obligated Party ” shall have the meaning specified in Section 10.02 .

“ Obligations ” shall mean all unpaid principal of and accrued and unpaid interest on the Term Loans, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Borrower and the Guarantors to the Lenders or to any Lender, any Agent, or any Indemnitee arising under the Loan Documents. Nothing in this definition of Obligations shall permit the Borrower, the Guarantors or their Significant Subsidiaries to incur or permit to exist any Indebtedness not otherwise permitted pursuant to the terms hereof. The Obligations include interest (including interest that accrues or that would accrue but for the filing of a bankruptcy case by the Borrower or any Guarantor, whether or not such interest would be an allowable claim under any applicable bankruptcy or other similar proceeding) and other obligations accruing or arising after commencement of any case under any bankruptcy or similar laws by or against the Borrower or any Guarantor (or that would accrue or arise but for the commencement of any such case).

other than any lease under which such Person is the lessor; or (c) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheets of such Person, but excluding from this clause (c) operating leases and Capital Lease Obligations.

“ Parent ” shall mean Kaiser Aluminum Corporation, a Delaware corporation.

“ Paying Guarantor ” shall have the meaning specified in Section 10.10 .

“ PBGC ” shall mean the Pension Benefit Guaranty Corporation, or any successor agency or entity performing substantially the same functions.

“ Permitted Acquisition ” shall mean any acquisition by the Borrower or any Guarantor in a transaction that satisfies each of the following requirements:

(a) such acquisition is not a hostile or contested acquisition;

(b) the business acquired in connection with such acquisition (i) is predominantly located in the U.S. and the parent company and its material subsidiaries are organized under U.S. and applicable state laws, and (ii) is not engaged, directly or indirectly, in any material line of business other than the businesses in which the Borrower and the Guarantors are engaged on the Closing Date and any business activities that are substantially similar, related, or incidental thereto;

(c) both before and after giving effect to such acquisition and the Term Loans (if any) requested to be made in connection therewith, each of the representations and warranties in the Loan Documents is true and correct in all material respects (except (i) any such representation or warranty which relates to a specified prior date and (ii) to the extent the Lenders have been notified in writing by the Borrower that any representation or warranty is not correct and the Required Lenders have explicitly waived in writing compliance with such representation or warranty);

(d) as soon as available, but not less than thirty (30) days prior to such acquisition, the Borrower or applicable Guarantor has provided the Administrative Agent (i) notice of such acquisition and (ii) a copy of all business and financial information reasonably requested by the Administrative Agent including pro forma financial statements, statements of cash flow, and “Availability” (as defined in the Revolving Loan Documents) projections;

(e) the sum of the cash consideration paid in connection with such acquisition plus the amount of Disqualified Indebtedness assumed, acquired or issued in connection with such acquisition does not exceed $50,000,000 in the aggregate for all acquisitions made during the term of this Agreement (excluding, however, all acquisitions to which this clause (e) does not apply by operation of the proviso below); provided that this clause

(e) shall not apply if, after giving effect to the completion of such acquisition, Availability (as defined in the Revolving Loan Documents) immediately after the completion of such acquisition will not be less than $150,000,000 on a pro forma basis, which pro forma presentation shall treat all cash consideration given, and the amount of Disqualified Indebtedness assumed, acquired or issued, in connection with such acquisition as having been paid in cash at the time of making such acquisition; provided , further , that if a “Facility Increase” under (and as defined in) the Revolving Loan Documents occurs, such $150,000,000 minimum pro forma Availability shall be increased on the “Facility Increase Effective Date” (as defined in the Revolving Loan Documents) by 66.67% of the actual “Facility Increase Amount” (as defined in the Revolving Loan Documents) occurring on such date, such that, in the event of a Facility Increase of $75,000,000, such minimum pro forma Availability shall be $200,000,000;

(f) if such acquisition is an acquisition of the Equity Interests of a Person or a merger or consolidation with another Person, the acquisition, merger or consolidation is structured so that the Person so acquired, merged or consolidated shall become a wholly-owned Subsidiary of the Borrower or applicable Guarantor and, in accordance with Section 5.11(a) , a Borrower or Guarantor pursuant to the terms of this Agreement;

(g) if such acquisition is an acquisition of assets, the acquisition is structured so that a Borrower or a Guarantor shall acquire such assets;

(h) if such acquisition is an acquisition of Equity Interests, such acquisition will not result in any violation of Regulation U;

(i) neither the Borrower nor any Guarantor shall, as a result of or in connection with any such acquisition, assume or incur any direct or contingent liabilities (whether relating to environmental, tax, litigation, or other matters) that at the time of such acquisition could be reasonably expected to have a Material Adverse Effect;

(j) in connection with an acquisition of the Equity Interests of any Person, all Liens on property of such Person (other than liens in favor of the Collateral Agent securing the Obligations and any Liens that would constitute Liens permitted under Section 6.01 ) shall be terminated unless the Lenders in their sole discretion consent otherwise, and in connection with an acquisition of the assets of any Person, all Liens on such assets (other than liens in favor of the Collateral Agent securing the Obligations and any Liens that would constitute Liens permitted under Section 6.01 ) shall be terminated;

(k) the Borrower shall certify (and provide the Lenders with a pro forma calculation in form and substance reasonably satisfactory to the Lenders) to the Lenders that, after giving effect to the completion of such acquisition, “Availability” (as defined in the Revolving Loan Documents) immediately after the completion of such acquisition will not be less than $75,000,000 on a pro forma basis which pro forma presentation shall treat all cash consideration given, and the amount of Disqualified Indebtedness assumed, acquired or issued, in connection with such acquisition as having been paid in cash at the time of making such acquisition; provided , further , that if a “Facility Increase” under (and as defined in) the Revolving Loan Documents occurs, such $75,000,000 minimum pro forma Availability shall be increased on the “Facility Increase Effective Date” (as defined in the Revolving Loan

Documents) by 33.33% of the actual “Facility Increase Amount” (as defined in the Revolving Loan Documents) occurring on such date, such that, in the event of a Facility Increase of $75,000,000, such minimum pro forma Availability shall be $100,000,000; and

(l) no Default exists or would result therefrom.

“ Permitted Commodity Swap Agreement ” shall mean any Commodity Swap Agreement that (i) involves or is settled with respect to electricity, natural gas, alumina, bauxite or other mineral or metal used in the business of the Borrower, the Guarantors or their Significant Subsidiaries, and (ii) is entered into in the ordinary course of business to hedge against fluctuations in the price of electricity, natural gas, alumina, bauxite or other minerals or metals used in the business of the Borrower, the Guarantors or their Significant Subsidiaries and not for speculative purposes.

“ Permitted Investments ” shall mean:

(c) investments in certificates of deposit, bankers acceptances and time deposits (including Eurodollar time deposits) maturing within six months from the date of acquisition thereof issued or guaranteed by or placed with (i) any domestic office of the Administrative Agent or the bank with whom the Borrower and the Guarantors maintain their cash management system, provided that if such bank is not a Lender hereunder, such bank shall have entered into an agreement with the Agents pursuant to which such bank shall have waived all rights of setoff and confirmed that such bank does not have, nor shall it claim, a security interest therein or (ii) any domestic office of any other commercial bank of recognized standing organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $250,000,000 and is the principal Banking Subsidiary of a bank holding company having a long-term unsecured debt rating of at least “A-2” or the equivalent thereof from Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. or at least “P-2” or the equivalent thereof from Moody’s Investors Service, Inc.;

(d) investments in commercial paper issued by any Person organized under the laws of any state of the United States and rated at least “P-1” (or the then equivalent

grade) by Moody’s Investors Service, Inc. or at least “A-1” (or the then equivalent grade) by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., in each case, with maturities of not more than 360 days from the date of acquisition thereof;

(f) investments in money market funds substantially all the assets of which are comprised of securities of the types described in clauses (a) through (e) above.

“ Permitted Liens ” shall mean (i) Liens imposed by law (other than Environmental Liens and any Lien imposed under ERISA) for Taxes not yet delinquent or which are being contested in compliance with Section 5.04 ; (ii) Liens of landlords and Liens of carriers, warehousemen, workmen, repairmen, vendors, consignors, mechanics, materialmen and other Liens (other than Environmental Liens and any Lien imposed under ERISA) imposed by law and created in the ordinary course of business; (iii) Liens (other than any Lien imposed under ERISA) incurred or deposits made in the ordinary course of business (including, without limitation, surety bonds and appeal bonds) in connection with workers’ compensation, unemployment insurance and other types of social security benefits or governmental insurance or to secure the performance of tenders, bids, leases, contracts (other than for the repayment of Indebtedness), statutory obligations and other similar obligations or arising as a result of progress payments under government contracts; (iv) easements (including, without limitation, reciprocal easement agreements and utility agreements), rights-of-way, covenants, consents, reservations, mineral leases, encroachments, variations and zoning laws, ordinances, other restrictions and rights reserved to or vested in any municipality or government or proper authority to control or regulate any Property of the Borrower or the applicable Guarantor, charges or encumbrances (whether or not recorded) and interest of ground lessors, minor defects and irregularities in the title to any Property, which do not interfere materially with the ordinary conduct of the business of the Borrower or any Guarantor, as the case may be, and which do not materially detract from the value of the property to which they attach or materially impair the use thereof to the Borrower or any Guarantor, as the case may be; (v) purchase money Liens (including capital leases) upon or in any property acquired or held in the ordinary course of business to secure the purchase price of such property solely for the purpose of financing the acquisition of such property to the extent such purchase money Liens secure Indebtedness incurred in accordance with Section 6.03(iii) ; (vi) pledges or deposits in the ordinary course to secure leases entered into in the ordinary course of business; (vii) pledges and deposits of cash and Permitted Investments with a commodity broker or dealer for the purpose of margining or securing the obligations of the Borrower, any Guarantor or any Significant Subsidiary under a Permitted Commodity Swap Agreement; (viii) any interest of a consignor in goods held by the Borrower, any Guarantor or any Significant Subsidiary on consignment provided that such goods are held on consignment in the ordinary course of business consistent with past practices; and (ix) extensions, renewals, or replacements of any Lien referred to in clauses (i) through (viii) above; provided that the principal amount of the obligation secured thereby is not increased and that any such extension, renewal or replacement is limited to the property encumbered thereby.

“ Person ” shall mean any natural person, corporation, division of a corporation, limited liability company, partnership, trust, joint venture, association, company, estate, unincorporated organization, Governmental Authority or other entity.

“ PI Trust ” shall have the meaning given to such term in the Reorganization Plan.

“ PI Trust Assets ” shall have the meaning given to such term in the Reorganization Plan.

“ Plan ” shall mean a Single Employer Plan or a Multiple Employer Plan.

“ Prepayment Fee ” shall have the meaning given to such term in Section 2.06(d) .

“ Projections ” shall have the meaning assigned such to term in clause (e) of Section 5.01 .

“ Property ” shall mean any interest in any kind of property or asset, whether real, personal or mixed, tangible or intangible.

“ Register ” shall have the meaning set forth in Section 9.04 .

“ Reorganization Plan ” shall mean a plan of reorganization attached as Exhibit A-1 hereto.

“ Reorganized KACC ” shall mean Kaiser Aluminum & Chemical Corporation, LLC, a Delaware limited liability company.

“ Report ” shall mean any report prepared by any Agent or another Person showing the results of appraisals, field examinations or audits pertaining to the assets of the Borrower or any Guarantor from information furnished by or on behalf of the Borrower and the Guarantors, which Reports may be distributed to the Lenders by any Agent.

“ Required Lenders ” shall mean, (i) from and after the Closing Date, but prior to the Funding Date, Lenders holding Commitments representing not less than 51% of the aggregate amount of all such Commitments, and (ii) from and after the Funding Date, Lenders holding Term Loans representing not less than 51% of the aggregate principal amount of such Term Loans outstanding.

“ Requirement of Law ” shall mean, as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“ Restructuring Transactions ” shall mean the transactions scheduled to occur on or prior to the effective date of the Reorganization Plan and which are listed on Schedule 1.01(b) .

“ Revolving Loan Facility ” shall mean that certain Senior Secured Revolving Credit Agreement, dated as of the date hereof, among Borrower, Parent, Kaiser Aluminum Investments Company and Kaiser Aluminium International, Inc., as Borrowers, the “Lenders” (as defined therein) party thereto, and JPMorgan Chase, as administrative agent for the Lenders, and any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, replace, refinance or refund in whole or in part the indebtedness and other obligations outstanding under such Senior Secured Revolving Credit Agreement (regardless of whether such replacement, refunding or refinancing is a “working capital” facility, asset-based facility or otherwise), each as amended, modified, restated or supplemented from time to time in accordance with the terms hereof.

“ Revolving Loan Documents ” shall mean the Revolving Loan Facility and each other document, instrument and agreement executed in connection therewith, each as amended, modified, restated or supplemented from time to time in accordance with the terms hereof.

“ Revolving Loan Indebtedness ” shall mean the Indebtedness and other obligations of the Loan Parties under the Revolving Loan Documents.

“ SEC ” shall mean the Securities and Exchange Commission.

“ Security and Pledge Agreement ” shall have the meaning set forth in paragraph (d) of Section 4.01 .

“ Significant Subsidiary ” shall mean (other than an Excluded Subsidiary) each Subsidiary of Parent that

(a) is listed on Schedule 3.17 ;

(b) accounted for at least 5% of consolidated revenues of Parent and its Subsidiaries from sales to third parties for the four Fiscal Quarters of Parent ending on the last day of the last Fiscal Quarter of Parent immediately preceding the date as of which any such determination is made; or

(c) has assets (other than assets which are eliminated in consolidation) which represent at least 5% of the consolidated assets of Parent and its Subsidiaries as of the last day of the last Fiscal Quarter of Parent immediately preceding the date as of which any such determination is made,

all of which, with respect to clauses (b) and (c) , shall be as included in the consolidated financial statements of Parent for the period, or as of the date, in question.

“ Single Employer Plan ” shall mean a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (i) is maintained for employees of the Borrower, any Guarantor or an ERISA Affiliate or (ii) was so maintained and in respect of which the Borrower, any Guarantor or an ERISA Affiliate could have liability under Title IV of ERISA in the event such Plan has been or were to be terminated.

“ Subsidiary ” shall mean, with respect to any Person (herein referred to as the “ parent ”), any corporation, association or other business entity (whether now existing or hereafter organized) of which at least a majority of the securities or other ownership interests having ordinary voting power for the election of directors is, at the time as of which any determination is being made, owned or controlled by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Under no circumstances will an Excluded Subsidiary be, or be deemed to be, a Significant Subsidiary or a Subsidiary hereunder.

“ Swap Agreement ” shall mean any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference

to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower, any Guarantor or any of their Subsidiaries shall be a Swap Agreement.

“ Tax ” or “ Taxes ” shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

“ Tax Related Person ” shall mean any Person (including, without limitation, a beneficial owner of an interest in a pass-through entity) whose income is realized through or determined by reference to any Agent, or any Participant or any Tax Related Person of any of the foregoing.

“ Termination Date ” shall mean the earlier to occur of (i) the Maturity Date and (ii) the acceleration of the Term Loans or the termination of the Total Commitment in accordance with the terms hereof.

any Plan; (vi) the incurrence by the Borrower or any ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan (other than a Terminated Plan); (vii) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan (other than a Terminated Plan); (viii) the incurrence by the Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Plan (other than a Terminated Plan) or Multiemployer Plan; or (ix) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

“ Term Loans ” shall mean the loans made by the Lenders pursuant to this Agreement.

“ Total Commitment ” shall mean, at any time, the sum of the Commitments at such time.

“ Trochus ” shall mean Trochus Insurance Company, Ltd., a Bermuda entity.

“ Type ” when used in respect of any Term Loan shall refer to the Rate of interest by reference to which interest on such Term Loan is determined. For purposes hereof, “Rate” shall mean the Adjusted LIBO Rate or the Alternate Base Rate, as applicable.

“ United States ” and “ U.S. ” shall mean the United States of America.

“ Unliquidated Obligations ” shall mean, at any time, any Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Obligation that is an obligation (including any guarantee) that is contingent in nature at such time (including an obligation to provide collateral to secure any of the foregoing types of obligations).

“ VEBA Trusts ” shall mean the Union VEBA Trust (as defined in the Reorganization Plan) and the Retired Salaried Employees VEBA Trust (as defined in the Reorganization Plan).

“ Withdrawal Liability ” shall have the meaning given such term under Part I of Subtitle E of Title IV of ERISA.

Section 1.02 Classifications of Loans; Terms Generally . For purposes of this Agreement, Term Loans may be classified and referred to by Type ( e.g. , a “Eurodollar Loan”). The definitions in Section 1.01 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” All references herein to Sections,

Exhibits and Schedules shall be deemed references to Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. The words “asset” and “property” shall be construed to have the same meaning and effect and refer to any and all tangible and intangible assets and properties. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that , if the Borrower notifies the Administrative Agent that it requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Terms that are defined in the Uniform Commercial Code as in effect in the State of New York from time to time shall have the same meaning herein unless otherwise defined herein.

Section 1.03 Obligations Not Affected . The Obligations of the Borrower and the Guarantors shall not be affected by (i) the failure of the Administrative Agent or a Lender to assert any claim or demand or to enforce any right or remedy against the Borrower or any Guarantor under the provisions of this Agreement or any other Loan Document or otherwise; (ii) any extension or renewal of any provision hereof or thereof; (iii) any rescission, waiver, compromise, acceleration, amendment or modification of any of the terms or provisions of any of the Loan Documents; (iv) the release, exchange, waiver or foreclosure of any security held by the Collateral Agent for the Obligations or any of them; (v) the failure of the Administrative Agent or a Lender to exercise any right or remedy against the Borrower or any Guarantor; (vi) the release or substitution of the Borrower or any Guarantor; or (vii) any other circumstance that might otherwise constitute a discharge of a surety, other than, in each case, the payment in full in cash of the Obligations.

ARTICLE II
AMOUNT AND TERMS OF CREDIT

Section 2.01 Commitments . Subject to the terms and conditions set forth herein, each Lender agrees to make a Term Loan to the Borrower on the Funding Date, in an amount equal to such Lender’s Commitment. Amounts repaid in respect of Term Loans may not be reborrowed. Unless previously terminated, the Commitments shall terminate on the earlier of (i) the Funding Date, or (ii) the Final Funding Date.

Section 2.02 Term Loans .

(a) Each Term Loan shall be denominated in Dollars and comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request from time to time in accordance herewith. Each Lender at its option may make a Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Eurodollar Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Eurodollar Loan in accordance with the terms of this Agreement.

(b) At the commencement of each Interest Period for any Eurodollar Loan, such Eurodollar Loan shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000. Term Loans of more than one Type may be outstanding at the same time; provided that there shall not at any time be more than a total of eight (8) Eurodollar Loans outstanding.

(c) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to elect to convert or continue any Term Loan as a Eurodollar Loan if the Interest Period requested with respect thereto would end after the Maturity Date.

Section 2.03 Notice of Borrowing; Funding of Term Loans . By delivering a Notice of Borrowing to the Administrative Agent not later than 1:00 p.m., Central time, on a Business Day, the Borrower may irrevocably request, on not less than three (3) Business Days’ notice, that a Term Loan as a single drawing be made on the Funding Date. Any such notice shall specify the date of such Borrowing, which shall be a Business Day. Promptly following receipt of a Notice of Borrowing in accordance with this Section , the Administrative Agent shall advise each Lender of the details thereof. Each Lender shall make its Term Loan on the Funding Date by wire transfer of immediately available funds by 11:00 a.m., Central time, to the account of the Administrative Agent designated by it for such purpose by notice to the Lenders in an amount equal to such Lender’s Commitment. The Administrative Agent will make such Term Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to a domestic account identified by the Borrower in writing to the Administrative Agent.

Section 2.04 Interest Elections .

(a) The Term Loans shall initially be of the Type specified in the Notice of Borrowing and, in the case of a Eurodollar Loan, shall have an initial Interest Period as specified in such Notice of Borrowing. Thereafter, the Borrower may elect to convert such Term Loans to a different Type or to continue such Eurodollar Loan, and, in the case of a Eurodollar Loan, may elect Interest Periods therefor, all as provided in this Section 2.04 . The Borrower may elect different options with respect to different portions of the Term Loans, in which case each such portion shall be allocated ratably among the Lenders.

(b) To make an election pursuant to this Section 2.04 , to borrow a Eurodollar Loan, to convert an ABR Loan to a Eurodollar Loan or to continue a Eurodollar Loan as a Eurodollar Loan, the Borrower shall notify the Administrative Agent of such election by telephone not later than 12:00 p.m., Central time, three (3) Business Days before the date of the proposed conversion or continuation. The Notice of Borrowing and each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower.

(c) Each telephonic and written Interest Election Request or Notice of Borrowing shall specify the following information:

(i) the portion of the Term Loan to which such Interest Election Request applies and, if different options are being elected with respect to

different portions thereof, whether the resulting portions are to be ABR Loans or Eurodollar Loans (if a portion or portions are to be Eurodollar Loans, the information required to be specified pursuant to clause (iv) below shall be specified);

(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii) in the case of the Notice of Borrowing, whether the Term Loans are to be ABR Loans or Eurodollar Loans; and

(iv) if the Term Loans (or a portion thereof) are to be Eurodollar Loans, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Loan but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Eurodollar Loan.

(e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Loan prior to the end of the Interest Period applicable thereto, then, at the end of such Interest Period, such Eurodollar Loan shall be converted to an ABR Loan. Notwithstanding any contrary provision hereof, if a Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as a Default is continuing, (i) no outstanding Term Loan may be converted to or continued as a Eurodollar Loan and (ii) unless repaid, each Eurodollar Loan shall be converted to an ABR Loan at the end of the Interest Period applicable thereto.

Section 2.05 Repayment and Amortization of Term Loans; Evidence of Debt .

(a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Term Loan on the Termination Date. All unpaid Obligations shall be paid in full in cash by the Borrower on the Termination Date.

(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Term Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Term Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to

become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(d) The entries made in the accounts maintained pursuant to Sections 2.05(b) and (c) shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that in the event of a conflict between an account maintained pursuant to Section 2.05(b) and an account maintained pursuant to Section 2.05(c) , the account maintained under Section 2.05(c) shall control; provided further , that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Term Loans in accordance with the terms of this Agreement.

(e) Any Lender may request that Term Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered and permitted assigns) and in a form approved by the Administrative Agent. Thereafter, the Term Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04 ) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns) except to the extent that any such Lender subsequently returns any such promissory note for cancellation and requests that such Term Loans once again be evidenced as described in Sections 2.05(b) and (c) above.

Section 2.06 Prepayment of Term Loans .

(a) The Borrower shall have the right, at its option and then only to the extent permitted by the Revolving Loan Documents, at any time and from time to time, to prepay the Term Loans in whole or in part, subject to prior notice in accordance with Section 2.06(c) . Any prepayment of the Term Loans on or prior to July 5, 2007 shall be accompanied by the Prepayment Fee.

(b) (i) Subject to Section 2.06(b)(vi) below, no later than the next Business Day after receipt by the Borrower or any Guarantor of the Net Proceeds of any asset disposition (other than an Excluded Asset Disposition) the Borrower shall prepay the Obligations in an amount equal to 100% of such Net Proceeds; provided , that (a) if the Borrower or such Guarantor, as the case may be, intends to reinvest such proceeds thereof in accordance with this proviso, the Borrower shall deliver written notice of such intention to the Administrative Agent on or prior to the Business Day immediately following the date on which the Borrower or Guarantor, as the case may be, receives such proceeds, (b) if Borrower shall have delivered such notice, the Borrower or such Guarantor may reinvest the proceeds thereof so long as (i) such reinvestment is to restore, repair or replace the assets or property or purchase other assets used or useful in the business of the Borrower or such Guarantor and (ii) within 365 days after receipt of such proceeds such restoration, repair or replacement or purchase shall have been consummated, (c) on the date the Borrower or such Guarantor consummates such restoration, repair or replacement or purchase, it shall deliver a certificate of a Responsible Officer to the

Administrative Agent certifying that all, or, subject to the immediately succeeding proviso, part of, such proceeds have been reinvested in accordance with the proviso of this Section 2.06(b)(i) , and (d) until such reinvestment or the application of such proceeds pursuant to the proviso below, such proceeds (or any portion thereof) shall be deposited in a deposit account subject to a control agreement reasonably acceptable to the Administrative Agent or in an account under the control of the “Administrative Agent” (under and as defined in the Revolving Loan Documents) or used to repay amounts outstanding under the Revolving Loan Facility; provided , further that any proceeds not so reinvested shall be immediately applied as set forth in this Section 2.06(b)(i) .

(ii) Subject to Section 2.06(b)(vi) below, if the Borrower or any Guarantor issues Equity Interests or Indebtedness (other than Indebtedness permitted by Section 6.03 ), the Borrower shall prepay the Obligations in an amount equal to 100% of the Net Proceeds of such issuance no later than the Business Day following the date of receipt of such Net Proceeds.

(iii) Subject to Section 2.06(b)(vi) below, any insurance or condemnation proceeds to be applied to the Obligations in accordance with Section 5.03 shall be applied as set forth in paragraph (b)(v) below, provided that , with respect to such proceeds of insurance and condemnation awards (or payments in lieu thereof), (a) if the Borrower or such Guarantor, as the case may be, intends to reinvest the proceeds thereof in accordance with this proviso, the Borrower shall deliver written notice of such intention to the Administrative Agent on or prior to the Business Day immediately following the date on which the Borrower or Guarantor, as the case may be, receives such proceeds; (b) if the Borrower shall have delivered such notice, the Borrower or the applicable Guarantor, as the case may be, may reinvest the proceeds thereof so long as (i) such reinvestment is to restore, repair or replace the assets or property or purchase other assets used or useful in the business of the Borrower or such Guarantor, and (ii) within 365 days after receipt of such proceeds such restoration, repair or replacement or purchase shall have be consummated; (c) on the date that the Borrower or such Guarantor consummates such restoration, repair or replacement or purchase, it shall deliver a certificate of a Responsible Officer to the Administrative Agent certifying that all, or, subject to the immediately succeeding proviso, part of, such proceeds have been reinvested in accordance with the proviso of this Section 2.06(b)(iii) ; and (d) until such reinvestment or the application of such proceeds pursuant to the proviso below, such proceeds (or any portion thereof) shall be deposited in a deposit account subject to a control agreement reasonably acceptable to the Administrative Agent or in an account under the control of the “Administrative Agent” (under and as defined in the Revolving Loan Documents) or used to repay amounts outstanding under the Revolving Loan Facility; provided , further that any proceeds not so reinvested shall be immediately applied as set forth in this Section 2.06(b)(iii) . If the precise amount of insurance or condemnation proceeds allocable to Inventory as compared to equipment, fixtures and real Property is not otherwise determined, the allocation and application of those proceeds shall be determined by the Administrative Agent, in its Permitted Discretion.

(iv) Subject to Section 2.06(b)(vi) below, promptly (and in any event, no later than one (1) Business Day after the receipt thereof) upon receipt by the Borrower or any Guarantor of the Net Proceeds of any Extraordinary Receipts, the Borrower shall prepay the Obligations in an amount equal to 100% of such Net Proceeds as set forth in paragraph (b)(v) below.

(v) Without in any way limiting the foregoing but subject to paragraph (b)(vi) below, immediately upon receipt by the Borrower or any Guarantor of proceeds of any sale of any Collateral, the Borrower shall cause such Person to deliver such proceeds to the Administrative Agent, or deposit such proceeds in a deposit account subject to a control agreement reasonably acceptable to the Administrative Agent or in an account under the control of the “Administrative Agent” (under and as defined in the Revolving Loan Documents) or used to repay amounts outstanding under the Revolving Loan Facility. All of such proceeds shall be applied as provided in Section 2.13(b) . Nothing in this Section shall be construed to constitute Administrative Agent’s or any Lender’s consent to any transaction that is not permitted by other provisions of this Agreement or the other Loan Documents.

(vi) Notwithstanding the foregoing provisions of this Section 2.06(b) , no prepayment of the Term Loans shall be made or required unless both prior to and immediately after giving effect thereto, (a) no “Loans” (as defined in the Revolving Loan Documents) are outstanding under the Revolving Loan Facility, (b) “Availability” (as defined under the Revolving Loan Documents) is equal to or greater than $100,000,000, (c) no Dominion Trigger Event (as defined in the Revolving Loan Documents) is continuing and (d) no “Default” or “Event of Default” (each as defined in the Revolving Loan Documents) has occurred and is continuing.

(c) The Borrower shall notify the Administrative Agent by telephone (confirmed by facsimile) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Loan, not later than 12:00 noon, Central time, three (3) Business Days before the date of prepayment, and (ii) in the case of prepayment of an ABR Loan, not later than 1:00 p.m., Central time, one (1) Business Day before the date of prepayment. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each prepayment shall be applied ratably to the Term Loans. Prepayments shall be accompanied by accrued interest.

(d) If on or prior to July 5, 2007 any portion of the Term Loans is prepaid, then in addition to any other amounts payable under this Agreement and any other Loan Document, the Borrower shall pay, on the date of such prepayment, to the Administrative Agent for the ratable benefit of the Lenders (in addition to the then outstanding principal, accrued interest and other charges then due and payable under the terms of this Agreement and any other Loan Document), a nonrefundable prepayment fee (the “ Prepayment Fee ”) equal to the amount so prepaid multiplied by 1.00%.

Section 2.07 Fees . The Borrower agrees to pay the Agents and the Lenders (a) an unused line fee payable to the Administrative Agent, for the ratable benefit of the Lenders, at the rate of 1.00% per annum on the total amount of the Term Loan Facility for the period from the earlier of (i) the Closing Date, and (ii) the “Closing Date” (as defined in the Revolving Credit Facility) through the earlier of (i) the Funding Date, and (ii) the Final Funding Date, and (b) all other fees payable in the amounts and at the times separately agreed upon between the Borrower, the Agents and the Lenders, as the case may be. All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Agents or the Lenders, as applicable. Fees paid shall not be refundable under any circumstances.

Section 2.08 Interest .

(a) The Term Loans comprising each ABR Loan shall bear interest at the Alternate Base Rate plus the Applicable Margin.

(b) The Term Loans comprising each Eurodollar Loan shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Eurodollar Loan plus the Applicable Margin.

(c) Notwithstanding the foregoing, during the occurrence and continuance of an Event of Default, the Administrative Agent or the Required Lenders may, at their option, by notice to the Borrower (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 9.02 requiring the consent of each Lender affected thereby for reductions in interest rates), declare that (i) all Term Loans shall bear interest at 2% plus the rate otherwise applicable to such Term Loans as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount outstanding hereunder, such amount shall accrue at 2% plus the rate applicable to such fee or other obligation as provided hereunder.

(d) Accrued interest on each Term Loan shall be payable in arrears on each Interest Payment Date for such Term Loan and upon the Termination Date; provided that (i) interest accrued pursuant to Section 2.08(c) shall be payable on demand; (ii) in the event of any repayment or prepayment of any Term Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment; and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Term Loan shall be payable on the effective date of such conversion.

(e) All interest hereunder shall be computed on the basis of a year of 360 days, and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

Section 2.09 Alternate Rate of Interest . If prior to the commencement of any Interest Period for a Eurodollar Loan:

(b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Term Loans (or its Term Loan) included in such Eurodollar Loan for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or facsimile as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, any Interest Election Request that requests the conversion of any ABR Loan to, or continuation of any Eurodollar Loan as, a Eurodollar Loan shall be ineffective.

Section 2.10 Increased Costs .

(a) If any Change in Law shall:

(ii) impose on any Lender or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Term Loan) or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(b) If any Lender determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Term Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c) A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in Section 2.10(a) or (b) shall be delivered to the Borrower and shall be conclusive absent manifest

error. The Borrower shall pay such Lender the amount shown as due on any such certificate within fourteen (14) days after receipt thereof.

(d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

Section 2.11 Breakfunding Payments . In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default); (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto; (c) the failure to convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto; or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.14 , then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Eurodollar Loan had such event not occurred, at the Adjusted LIBO Rate (without including the Applicable Margin in such calculation) that would have been applicable to such Eurodollar Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Eurodollar Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within fourteen (14) days after receipt thereof.

Section 2.12 Taxes .

(a) Any and all payments by or on account of any obligation of the Borrower or the Guarantors hereunder shall be made free and clear of and without deduction for any Indemnified Taxes; provided that if the Borrower, any Guarantor or any Agent shall be required by law to deduct any Indemnified Taxes from such payments, then (i) the Borrower or such Guarantor, as the case may be, shall increase the sum payable as necessary so that after all required deductions and payments of Indemnified Taxes (including deductions and payments of Indemnified Taxes applicable to additional sums payable under this Section ) any Agent or Lender (as the case may be) receives an amount equal to the sum it would have received had no

such deductions been made or such Indemnified Taxes been payable; (ii) the Borrower and/or the applicable Agent shall make such deductions of Taxes which they are required by law to deduct; and (iii) the Borrower and/or the applicable Agent shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) The Borrower and the Guarantors shall indemnify each Agent and each Lender for the full amount of any Indemnified Taxes paid by such Agent or such Lender and each of their Tax Related Persons, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section ) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority, but excluding penalties, interest and other expenses to the extent solely and directly attributable to the gross negligence or willful misconduct of the Person claiming such indemnity. Payment under this Section 2.12(c) shall be made within fourteen (14) days after the applicable Agent or Lender makes written demand therefor. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or by the applicable Agent on its own behalf or on behalf of a Lender or their respective Tax Related Persons, shall be conclusive absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower or a Guarantor to a Governmental Authority, to the extent such Indemnified Taxes or Other Taxes are imposed with respect to any payment by or on account of any obligation of the Borrower or any Guarantor hereunder or with respect to any Loan Documents, the Borrower or such Guarantor shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) Any Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower or any Guarantor is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower and the Administrative Agent, at the time or times prescribed by applicable law, the appropriate properly completed and executed Internal Revenue Service Form W-8 (including, without limitation, Form W-8ECI, W-8BEN or W-8IMY) or Form W-9 or any successor form thereto or such other evidence satisfactory to the Borrower and the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate. “United States persons” (within the meaning of Code Section 7701(a)(30)) that are “exempt recipients” (within the meaning of Treasury Regulations Section 1.6049-4(c)(1)(ii) (without regard to the third sentence thereof)) shall not be required to furnish an Internal Revenue Service Form W-9 unless (i) the Borrower reasonably believes that such person is, in fact, not an “exempt recipient,” and (ii) the Borrower timely and reasonably requests a Form W-9 from such Person ( provided , however , that if a United States person is not legally entitled to

deliver a Form W-9 as a result of a change in law occurring after the date hereof, such Person shall not be required to deliver such Form W-9).

(f) If an Agent or a Lender determines, in its sole discretion, that it has received a refund of or credit against any Taxes paid by the Borrower or any Guarantor or as to which it has been indemnified by the Borrower or any Guarantor or with respect to which the Borrower or any Guarantor has paid additional amounts pursuant to this Section 2.12 , it shall pay over such refund or the amount of such credit to the Borrower or such Guarantor (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower or such Guarantor under this Section 2.12 with respect to the Taxes giving rise to such refund or credit), net of all out-of-pocket expenses and Taxes of such Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund) within thirty (30) days of the receipt of such amount; provided , that the Borrower or such Guarantor upon the request of such Agent or such Lender, agrees to repay the amount paid over to the Borrower or such Guarantor (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Agent or such Lender in the event such Agent or such Lender is required to repay such refund to such Governmental Authority. Nothing in this Section 2.12(f) shall be construed to require any Agent or any Lender (or any of their Tax Related Persons) to make available its Tax returns (or any other information which it deems confidential) to the Borrower, any Guarantor or any other Person.

Section 2.13 Payments Generally; Allocation of Proceeds; Sharing of Set-offs .

(a) The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, or fees or of amounts payable under Section 2.10 , 2.11 or 2.12 or otherwise) prior to 1:00 p.m., Central time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 120 South LaSalle Street, Chicago, Illinois, except that payments pursuant to Sections 2.10 , 2.11 , 2.12 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in Dollars.

(b) Any proceeds of Collateral received by an Agent (i) not constituting either (A) a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which shall be applied as specified by the Borrower) or (B) a mandatory prepayment (which shall be applied in accordance with Section 2.06 ), or (ii) after an Event of Default has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so direct, such funds shall be applied ratably first , to pay any fees, indemnities, or expense reimbursements including amounts then due to any Agent from the Borrower, second , to pay any fees or expense reimbursements then due to the Lenders from the Borrower, third , to pay interest due in respect of the Term Loans, fourth , to pay the principal of the Term Loans; and

fifth , to the payment of any other Obligation due to any Agent or any Lender by the Borrower. Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrower, or unless a Default is in existence, neither the Administrative Agent, the Collateral Agent nor any Lender shall apply any payment which it receives to any Eurodollar Loan, except (a) on the expiration date of the Interest Period applicable to any such Eurodollar Loan or (b) in the event, and only to the extent, that there are no outstanding ABR Loans and, in such case, the Borrower shall pay the breakfunding payment required in accordance with Section 2.11 . The Agents and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Obligations.

(c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Term Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Term Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Term Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Term Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Term Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

(d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(e) If any Lender shall fail to make any payment required to be made by it pursuant to this Agreement, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the

Administrative Agent for the account of such Lender to satisfy such Lender’s obligations hereunder until all such unsatisfied obligations are fully paid.

Section 2.14 Mitigation Obligations; Replacement of Lenders . If any Lender requests compensation under Section 2.10 , or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.12 , then:

(a) such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Term Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.10 or 2.12 , as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender (and the Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment); and

(b) the Borrower may, at its sole expense and effort, require such Lender (a “ Departing Lender ”), upon notice by the Borrower to the Departing Lender and the Administrative Agent, to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04 ), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, conditioned or delayed; (ii) the Departing Lender shall have received payment of an amount equal to the outstanding principal of its Term Loans accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts); and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.10 or payments required to be made pursuant to Section 2.12 , such assignment will result in a reduction in such compensation or payments. A Departing Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

Section 2.15 Indemnity for Returned Payments . If after receipt of any payment which is applied to the payment of all or any part of the Obligations, any Agent or Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by such Agent or such Lender and the Borrower shall be liable to pay to such Agent or such Lender, and the Borrower hereby indemnifies such Agent or such Lender and holds such Agent or such Lender harmless for the amount of such payment or proceeds surrendered. The provisions of this Section 2.15 shall be and remain effective notwithstanding any contrary action which may have been taken by any Agent or any Lender in reliance upon

such payment or application of proceeds, and any such contrary action so taken shall be without prejudice to the Agents’ and the Lenders’ rights under this Agreement and the other Loan Documents and shall be deemed to have been conditioned upon such payment or application of proceeds having become final and irrevocable. The provisions of this Section 2.15 shall survive the termination of this Agreement.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders to make Term Loans hereunder and the Agents to enter into this Agreement, the Borrower and each of the Guarantors jointly and severally represent and warrant, as of the date hereof, as of the Closing Date and as of the Funding Date, as follows:

Section 3.01 Organization and Authority . The Borrower, each of the Guarantors and each of the Significant Subsidiaries (i) is duly organized and validly existing under the laws of the jurisdiction of its organization and is duly qualified as a foreign organization and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to have a Material Adverse Effect, (ii) has the requisite corporate power and authority to effect the transactions contemplated hereby, and by the other Loan Documents to which it is a party, and (iii) has all requisite organizational power and authority and the legal right to own, pledge, mortgage and operate its properties, and to conduct its business as now or currently proposed to be conducted.

Section 3.02 Due Execution . The execution, delivery and performance by each of the Borrower and the Guarantors of each of the Loan Documents to which such Person is a party (i) are within its organizational powers, have been duly authorized by all necessary organizational action including the consent of equity holders where required, and do not (A) contravene its charter or by-laws or other constituent documents, (B) violate any law (including, without limitation, the Securities Exchange Act of 1934) or regulation (including, without limitation, Regulations T, U or X of the Board of Governors of the Federal Reserve System), or any order or decree of any court or Governmental Authority, (C) conflict with or result in a breach of, or constitute a default under, any material indenture, mortgage or deed of trust or any material lease, agreement or other instrument binding on it or any of its respective properties, or (D) result in or require the creation or imposition of any Lien upon any of its property other than the Liens granted pursuant to this Agreement or the other Loan Documents; and (ii) do not require the consent, authorization by or approval of or notice to or filing or registration with any Governmental Authority, other than (x) any actions required outside of the United States (with respect to Collateral located outside of the United States or Collateral consisting of stock of foreign issuers) and (y) actions required under the Federal Assignment of Claims Act of 1940 in order to perfect the security interests of the Collateral Agent in the Collateral. This Agreement has been duly executed and delivered by the Borrower and each of the Guarantors. This Agreement is, and each of the other Loan Documents to which the Borrower and each of the Guarantors is or will be a party, when delivered hereunder or thereunder, will be, a legal, valid and binding obligation of the Borrower and each Guarantor, as the case may be, enforceable against the Borrower and the Guarantors, as the case may be, in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting

creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

Section 3.03 Statements Made . The information that has been delivered in writing by the Borrower or any of the Guarantors to the Administrative Agent in connection with any Loan Document, and any financial statement delivered pursuant hereto or thereto (other than to the extent that any such statements constitute Projections), taken as a whole and in light of the circumstances in which made, as of the date of delivery of such information or financial statement (other than Projections), contains no untrue statement of a material fact and does not omit to state a material fact necessary to make such statements not misleading (for the purpose of clarification, any financial statements that have been delivered, other than financial statements filed with the SEC and the annual financial statements delivered or to be delivered pursuant to Section 5.01(a) , do not contain notes that would otherwise be required by GAAP); and, to the extent that any such information constitutes Projections, such Projections were prepared in good faith on the basis of assumptions, methods, data, tests and information believed by the Borrower or such Guarantor to be reasonable at the time such Projections were furnished. It is understood by the Administrative Agent and the Lenders that all the Projections may not prove to be correct, that actual future financial performance may vary from the Projections and that nothing contained in this Section 3.03 shall be construed as a warranty or guarantee of future financial performance.

Section 3.04 Financial Statements . The Borrower has furnished the Administrative Agent with copies of, or has provided the Administrative Agent with an electronic link to the copies that have been made available through its website or that have been filed with the SEC via EDGAR, the unaudited consolidated financial statements of Parent and its Subsidiaries for the most recent Fiscal Quarter ended at least fifty (50) days prior to the Closing Date (unless such Fiscal Quarter is the fourth Fiscal Quarter, in which case the Borrower shall have delivered such financial statements for the Fiscal Quarter ended immediately prior thereto) and the audited consolidated financial statements of Parent and its Subsidiaries for the most recent Fiscal Year ended at least one hundred and five (105) days prior to the Closing Date. Subject to any qualifications set forth therein, (i) such financial statements present fairly the financial condition and results of operations of Parent and its Subsidiaries on a consolidated basis as of such date and for such period, (ii) such balance sheets and any notes thereto disclose all liabilities, direct or contingent, of Parent and its Subsidiaries as of the dates thereof required to be disclosed by GAAP and (iii) such financial statements were prepared in a manner consistent with GAAP. No event that had a Material Adverse Effect has occurred since December 31, 2005.

Section 3.05 Real Property . As of the Closing Date, Schedule 3.05 sets forth a correct and complete list of all material real Property owned or leased by the Borrower or any Guarantor. No material default by Borrower or any Guarantor under any lease or sublease related to any leased or subleased real Property set forth on Schedule 3.05 exists and, to the knowledge of the Borrower and the Guarantors, no material default by any other party to any such lease or sublease exists. Except as set forth on Schedule 3.05 , the Borrower and each Guarantor has good and indefeasible title to, or valid leasehold interests in, all of its material real and personal Property, free of all Liens other than those permitted by Section 6.01 .

Section 3.06 Liens . Except for Liens existing on the Closing Date as reflected on Schedule 3.06 , there are no Liens of any nature whatsoever on any assets of the Borrower or any of the Guarantors other than: (i) Permitted Liens; (ii) other Liens permitted pursuant to Section 6.01 ; and (iii) Liens in favor of the Collateral Agent. Neither the Borrower nor any Guarantor is a party to any contract, agreement, lease or instrument the performance of which, either unconditionally or upon the happening of an event, will result in or require the creation of a Lien on any assets of the Borrower or any Guarantor or otherwise result in a violation of this Agreement other than (x) the Liens granted to the Collateral Agent and the Lenders as provided for in this Agreement and (y) the Liens granted to the “Administrative Agent” (as defined in the Revolving Loan Documents) and the “Lenders” (as defined in the Revolving Loan Documents) as provided for in the Revolving Loan Documents.

Section 3.07 Compliance with Law . Except as set forth on Schedule 3.07 , neither the Borrower nor any Guarantor is, to the best of their knowledge, in violation of any law (except those relating to Environmental Laws set forth on Schedule 3.21 ), rule or regulation, or in default with respect to any judgment, writ, injunction or decree of any Governmental Authority the violation of which, or a default with respect to which, would have a Material Adverse Effect.

Section 3.08 Insurance . All policies of insurance of any kind or nature owned by or issued to the Borrower and the Guarantors, including, without limitation, policies of life, fire, theft, product liability, public liability, property damage, other casualty, employee fidelity, workers’ compensation, employee health and welfare, title, property and liability insurance, are in full force and effect and are of a nature and provide such coverage as is customarily carried by companies of the size and character of the Borrower and the Guarantors.

Section 3.09 Use of Proceeds . The proceeds of the Term Loans will be used by the Borrower in accordance with, and in a manner and subject to the limitations described in, Section 5.10 .

Section 3.10 Litigation . Other than as set forth on Schedule 3.10 , there are no actions, suits, proceedings or investigations pending or, to the actual knowledge of the Borrower or any of the Guarantors, threatened against or affecting the Borrower or any Guarantor or any of their respective properties, before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which would be reasonably likely to have a Material Adverse Effect.

Section 3.11 Investment and Holding Company Status . None of the Borrower, the Guarantors nor any of their respective Subsidiaries is (a) an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940 or (b) a “holding company” as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935.

Section 3.12 Taxes . Except as set forth on Schedule 3.12 , the Borrower and each of the Guarantors have timely filed or caused to be filed all federal and all state and other material Tax returns and reports required by law to have been filed by each such Person and has paid or caused to be paid all federal and all state and other material Taxes required by law to

have been paid by each such Person, except Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Guarantor, as applicable, has set aside on its books adequate reserves. Except as set forth on Schedule 3.12 , no Tax liens have been filed, and no claims are being asserted with respect to any such Taxes except claims that are being contested in accordance with Section 5.04 .

Section 3.13 ERISA . No Termination Event has occurred that, when taken together with all other such Termination Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (excluding the Terminated Plans) as of December 31, 2004, or the date of the most recent audited financial statements reflecting such amounts (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not exceed by more than $20,000,000 the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans did not exceed by more than $20,000,000 the fair market value of the assets of all such underfunded Plans.

Section 3.14 Disclosure . Except as disclosed in the Form 10-Q filed with the SEC by Parent and KACC on May 10, 2006, or in other periodic reports filed with the SEC after May 10, 2006, and prior to July 6, 2006, the Borrower and the Guarantors have disclosed to the Administrative Agent all agreements, instruments and corporate or other restrictions to which the Borrower, the Guarantors or any of their respective Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No Lien has arisen with respect to any Plan.

Section 3.15 Material Agreements . All material agreements and contracts to which the Borrower or any Guarantor is a party or is bound and which, under applicable law would be required to be filed with the SEC are either: (a) filed as exhibits to, or incorporated by reference in, the last Form 10-K or Form 10-Q prior to the Closing Date, or any Form 10-K, Form 10-Q or 8-K thereafter, in each case filed with the SEC by Parent and/or KACC or (b) are listed on Schedule 3.15 . Neither the Borrower nor any Guarantor is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (x) any material agreement to which such Person is a party or (y) any agreement or instrument evidencing or governing Indebtedness.

Section 3.16 Reportable Transaction . The Borrower does not intend to treat the advances of Term Loans and related transactions as being a “reportable transaction” (within the meaning of Treasury Regulation Section 1.6011-4). In the event the Borrower determines to take any action inconsistent with such intention, the Borrower will promptly notify the Administrative Agent thereof.

Section 3.17 Capitalization and Subsidiaries . Schedule 3.17 sets forth (a) a correct and complete list of the name and relationship to the Borrower of each and all of the Guarantors and their Significant Subsidiaries, (b) a true and complete listing of each class of each of the authorized Equity Interests of the Borrower, of which all of such issued shares are validly issued, outstanding, fully paid and non-assessable, and owned beneficially and of record by the Persons identified on Schedule 3.17 , and (c) the type of entity of the Borrower and each of

the Guarantors and each of their respective Significant Subsidiaries. All of the issued and outstanding Equity Interests owned by the Borrower or by any Guarantor has been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and is fully paid and nonassessable. The Borrower may amend from time to time Schedule 3.17 (by delivery of a revised Schedule 3.17 to the Administrative Agent) upon the sale of any Significant Subsidiary which is permitted in this Agreement.

Section 3.18 Common Enterprise . The Borrower and each Guarantor expect to derive benefit (and its board of directors or other governing body has determined that it may reasonably be expected to derive benefit), directly and indirectly, from (i) successful operations of the Borrower and Guarantors and (ii) the credit extended by the Lenders to the Borrower hereunder. The Borrower and each of the Guarantors has determined that execution, delivery, and performance of this Agreement and any other Loan Documents to be executed by the Borrower or such Guarantor is within its purpose, will be of direct and indirect benefit to the Borrower or such Guarantor and is in its best interest.

Section 3.19 [Intentionally omitted.]

Section 3.20 Labor Disputes . Except as set forth on Schedule 3.20 , (a) there is no collective bargaining agreement or other labor contract covering employees of the Borrower or any Guarantor, (b) no such collective bargaining agreement or other labor contract is scheduled to expire during the term of this Agreement, (c) to the knowledge of the Borrower or any Guarantor, no union or other labor organization is seeking to organize, or to be recognized as, a collective bargaining unit of employees of the Borrower, any of the Guarantors or any of their respective Subsidiaries or for any similar purpose, and (d) there is no pending or to the knowledge of the Borrower or any Guarantor, threatened, strike, work stoppage, material unfair labor practice claim, or other material labor dispute against or affecting the Borrower, any Guarantor or their respective Subsidiaries or their employees.

Section 3.21 Environmental Matters . (a) Except as set forth on Schedule 3.21(a) :

(i) all facilities and Property (including underlying groundwater) owned, operated, or leased by the Borrower, any Guarantor, or any of their Subsidiaries have been, and continue to be, in material compliance with all Environmental Laws;

(ii) there are no pending or, to the knowledge of the Borrower or any Guarantor, after due inquiry, threatened

(A) claims, complaints, notices, or requests for information received by the Borrower, any of the Guarantors, or any of their Subsidiaries, from any Governmental Authority, or from any Person which has commenced a legal proceeding against the Borrower, any of the Guarantors, or any of their respective Subsidiaries, with respect to any alleged violation of any Environmental Law, or

(B) complaints, notices, or inquiries to the Borrower, any Guarantors, or any of their Subsidiaries, from any Governmental Authority, or from any Person which has commenced a legal proceeding against the Borrower, any of the Guarantors, or any of their Subsidiaries, regarding potential liability under any Environmental Law;

(iii) there have been no Releases of Hazardous Materials at, on, into or under any Property now or previously owned, operated, or leased by the Borrower, any of the Guarantors, or any of their Subsidiaries that, singly, or in the aggregate, could reasonably be expected to have a Material Adverse Effect;

(iv) the Borrower, the Guarantors, and their Subsidiaries have been issued and are in material compliance with all permits, certificates, approvals, licenses, and other authorizations required by any applicable Environmental Law relating to any environmental matters and necessary for their businesses;

(v) no Property now or previously owned, operated, or leased by the Borrower, any of the Guarantors, or any of their Subsidiaries is listed or, to the knowledge of the Borrower or any of the Guarantors proposed for listing (with respect to owned Property only) on the National Priorities List pursuant to CERCLA or in the CERCLIS, or, to the knowledge of the Borrower or any of the Guarantors, on any similar state list of sites requiring investigation or clean-up;

(vi) there are no underground storage tanks (as defined in 40 C.F.R. §280.1, as the same may be amended, modified, supplemented, or replaced from time to time), active or abandoned, including petroleum storage tanks, on or under any Property now or previously owned or leased by the Borrower, any of the Guarantors, or any of their Subsidiaries that, singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect;

(vii) neither the Borrower, any Guarantor, nor any of their Subsidiaries has, to the knowledge of the Borrower or any Guarantor, transported or arranged for the transportation of any Hazardous Material to any location which is listed or proposed for listing on the National Priorities List pursuant to CERCLA, on the CERCLIS or any similar state list or which is the subject of federal, state, or local enforcement actions or other investigations that could reasonably be expected to result in material claims against the Borrower, any Guarantor or any of their Subsidiaries for any remedial work, damage to natural resources, or personal injury, including claims under CERCLA; and

(viii) there are no polychlorinated biphenyls or friable asbestos present at any real Property now or previously owned or leased by the Borrower, any of the Guarantors or any of their Subsidiaries that singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(b) Schedule 3.21(b) identifies all sites at which the Borrower, any of the Guarantors or any of their Subsidiaries are currently conducting cleanup or remediation or an investigation as to whether such cleanup or remediation is warranted or required.

Section 3.22 Confirmation Order; District Court Order . The Confirmation Order has been entered by the Bankruptcy Court, is in full force and effect and has been affirmed by the District Court Order. The District Court has entered the District Court Order, such District Court Order is in full force and effect and the time to appeal such District Court Order or to seek review, rehearing or certiorari with respect to such District Court Order has expired, and no appeal or petition for review, rehearing or certiorari with respect to such order of the District Court is pending other than the Insurer Appeals and the McNeil Appeal, none of which will adversely affect the transactions contemplated hereby or have a Material Adverse Effect.

Section 3.23 Consummation Date . All conditions to the occurrence of the Consummation Date have occurred or have been waived with the consent of the Administrative Agent and otherwise in accordance with the terms of the Reorganization Plan, and the Consummation Date has occurred or shall occur concurrently with the closing of this Agreement.

Section 3.24 Solvency . (a) Immediately after the consummation of the transactions to occur on the date hereof, including the Restructuring Transactions and all distributions to be made on or about the Consummation Date in accordance with the Reorganization Plan and the incurrence of Indebtedness under the Revolving Loan Facility, and immediately following the making of the Term Loans and after giving effect to the application of the proceeds of the Term Loans, (i) the fair value of the assets of the Borrower and each Guarantor, at a fair valuation, will exceed the debts and liabilities, subordinated, contingent or otherwise, of the Borrower and each Guarantor, (ii) the present fair saleable value of the Property of the Borrower and each Guarantor is not less than the amount that will be required to pay the probable liability of the Borrower and each Guarantor on its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) each of the Borrower and the Guarantors will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) each of the Borrower and the Guarantors will not have unreasonably small capital with which to conduct the businesses in which such Person is engaged as such businesses are now conducted and are proposed to be conducted after the date hereof. The amount of contingent liabilities at any time shall be computed as the amount that, in light of all facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

(b) The Borrower and the Guarantors do not intend to, or believe that any of them or any of their Subsidiaries will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by such Person or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of such Person’s Indebtedness or the Indebtedness of any such Subsidiary.

Section 3.25 Security Interest in Collateral . The provisions of the Security and Pledge Agreement and the other Loan Documents create legal and valid Liens on all the Collateral in favor of the Collateral Agent, for the benefit of the Collateral Agent, the

Administrative Agent and the Lenders, and such Liens constitute perfected and continuing Liens on the Collateral, securing the Obligations, enforceable against the Borrower and the Guarantors and having priority over all other Liens on the Collateral except in the case of (a) Liens securing the “Secured Obligations” (as defined in the Revolving Loan Documents); (b) Liens permitted under Section 6.01 , to the extent any such Permitted Liens would have priority over the Liens in favor of the Collateral Agent pursuant to any applicable law or any applicable agreement that is permitted hereunder; (c) Liens perfected only by possession (including possession of any certificate of title) to the extent the Collateral Agent has not obtained or does not maintain possession of such Collateral; and (d) Liens on real Property perfected only by recordation of a mortgage or deed of trust to the extent the Collateral Agent does not elect to require such a recorded instrument pursuant to clause (e) of Section 4.01 .

ARTICLE IV
CONDITIONS OF LENDING

Section 4.01 Conditions Precedent to Closing Date . The effectiveness of this Agreement is subject to the satisfaction (or waiver in accordance with Section 9.02 ) of the following conditions precedent:

(a) Supporting Documents . The Administrative Agent shall have received from the Borrower and each of the Guarantors:

(i) a copy of such entity’s certificate of incorporation or formation, as amended, certified as of a recent date by the Secretary of State of the state of its incorporation or formation;

(iii) a certificate of the Secretary or an Assistant Secretary of that entity dated the Closing Date and certifying (A) that attached thereto is a true and complete copy of the by-laws or limited liability company agreement of that entity as in effect on the date of such certification, (B) that attached thereto is a true and complete copy of resolutions adopted by the Board of Directors or managers of that entity authorizing the Term Loans hereunder, the execution, delivery and performance in accordance with their respective terms of this Agreement, the Loan Documents and any other documents required or contemplated hereunder or thereunder and the granting of the Liens contemplated hereby, (C) that the certificate of incorporation or formation of that entity has not been amended since the date of the last amendment thereto indicated on the certificate of the Secretary of State furnished pursuant to clause (i) above and (D) as to the incumbency and specimen signature of each officer or manager of that entity executing this Agreement and the Loan Documents or any other document delivered by it in connection herewith or therewith (such certificate to contain a certification by another officer or manager of that entity as to the incumbency and signature of the officer signing the certificate referred to in this clause (iii) );

(iv) (A) a copy of the Reorganization Plan, substantially in the form of Exhibit A-1 and which is in all respects in form and substance satisfactory to the Administrative Agent and the Lenders, and (B) all orders of the Bankruptcy Court approving the Reorganization Plan, this Agreement, the Commitment Letter and the Fee Letter each in form and substance acceptable to the Agents and the Lenders;

(c) Terms of Restructuring . The Administrative Agent and the Lenders shall be satisfied with, to the extent not specifically described in the Reorganization Plan, the material terms of the restructuring of the Borrower and the Guarantors (including, without limitation, changes to the current composition of the Board of Directors and of senior management and the capital and tax structure of the Borrower, each Guarantor and each of their respective Significant Subsidiaries).

(d) Security and Pledge Agreement . The Borrower and each of the Guarantors shall have duly executed and delivered to the Collateral Agent a Security and Pledge Agreement in substantially the form of Exhibit B (the “ Security and Pledge Agreement ”), pursuant to which the Borrower and each of the Guarantors shall have granted to the Collateral Agent, for the benefit of the Agents and the Lenders, a second priority, perfected security interest in the Collateral (free and clear of all Liens, other than Permitted Liens and other Liens permitted under the Loan Documents), and shall have filed appropriately completed and duly executed Uniform Commercial Code financing statements.

(e) Mortgages . The Borrower and each of the Guarantors shall have duly executed and delivered to the Collateral Agent a Mortgage, substantially in the form of Exhibit F , duly executed by the Borrower or the applicable Guarantor, in or to any real Property listed on Schedule 4.01(e) .

(f) Intercreditor Agreement . Pursuant to the Intercreditor Agreement, the “Lenders” (as defined in the Revolving Loan Documents) shall have agreed to terms and conditions acceptable to the Administrative Agent and the Lenders.

(g) Intellectual Property . The Borrower and each of the Guarantors shall have made arrangements satisfactory to the Administrative Agent to duly record all appropriate documents in the U.S. Patent and Trademark Office, the United States Copyright Office, and any applicable domain name registry, as applicable.

(h) Repayment of Existing Indebtedness . The Existing Credit Agreement and all commitments thereunder to lend shall have been terminated, all amounts outstanding thereunder (other than in respect of existing letters of credit issued thereunder which shall become “Letters of Credit” (under and as defined in the Revolving Loan Documents)) shall have been paid in full or cash collateralized and all Liens on the assets of the Borrower, Guarantors or any of their Subsidiaries securing any obligations thereunder or under any related agreement shall have been permanently released and the Administrative Agent shall have received evidence satisfactory in form and substance to it demonstrating such termination, payment and release.

(i) Opinion of Counsel . The Administrative Agent and the Lenders shall have received the favorable written opinion of counsel to the Borrower and the Guarantors reasonably acceptable to the Administrative Agent, dated the Closing Date substantially in the form of Exhibit C .

(j) Fees and Expenses . Parent or the Borrower shall have paid (i) to the Administrative Agent , the then unpaid balance of all accrued and unpaid Fees due under and pursuant to this Agreement and the Fee Letter, and (ii) to the Administrative Agent and the Collateral Agent, as applicable, all accrued and unpaid legal fees and expenses of the Administrative Agent and the Collateral Agent that the Borrower and the Guarantors are not otherwise prohibited from paying by an order of the Bankruptcy Court. The Administrative Agent shall also have received a duly executed and delivered Second Amended and Restated Fee Letter, substantially in the form of Exhibit H .

(k) Certificates of Insurance . The Borrower and the Guarantors shall have delivered to the Administrative Agent certificates of insurance reasonably satisfactory to the Administrative Agent in all respects evidencing the existence of all insurance required to be maintained by the Borrower and the Guarantors pursuant to Section 5.03 of this Agreement.

(l) Material Consents . The Borrower and the Guarantors shall have delivered to the Administrative Agent all material consents listed on Schedule 4.01(l) .

(m) Corporate and Judicial Proceedings . All corporate and judicial proceedings and all instruments and agreements in connection with the transactions among the Borrower, the Guarantors, the Agents and the Lenders contemplated by this Agreement shall be reasonably satisfactory in form and substance to the Administrative Agent, and the Administrative Agent shall have received all information and copies of all material documents and papers which the Administrative Agent may have reasonably requested in connection

therewith, such documents and papers where appropriate to be certified by proper corporate, governmental or judicial authorities.

(n) Information . The Administrative Agent shall have received such information (financial or otherwise) as may be reasonably requested by the Administrative Agent.

(o) Projections . The Administrative Agent and the Lenders shall have received a copy of the initial Projections of Parent, which Projections shall cover a period commencing on or prior to the Closing Date and ending December 31, 2008, such Projections to be satisfactory in form and substance to the Administrative Agent.

(p) Compliance with Material Laws and Regulations . The Borrower and the Guarantors shall have granted the Administrative Agent access to and the right to inspect all reports, audits and other internal information of the Borrower and the Guarantors relating to environmental matters, and any third party verification of certain matters relating to compliance with Environmental Laws reasonably requested by the Administrative Agent, and the Administrative Agent shall be reasonably satisfied (x) that the Borrower and the Guarantors are in compliance in all material respects with all applicable material laws and regulations (including but not limited to ERISA (except for such violations as set forth on Schedule 3.07 ), margin regulations, bank regulatory limitations and Environmental Laws) and (y) that the Borrower and Guarantors have made adequate provision for the costs of maintaining such compliance.

(q) UCC Searches . The Administrative Agent shall have received UCC searches (including tax liens and judgments) and patent and trademark searches conducted in the jurisdictions in which the Borrower and the Guarantors conduct business (dated as of a date reasonably satisfactory to the Agent), reflecting the absence of Liens and encumbrances on the assets of the Borrower and the Guarantors other than such Liens permitted under the Loan Documents and other Liens as may be satisfactory to the Administrative Agent.

(r) Closing Documents . The Administrative Agent shall have received all documents required by this Section 4.01 and each item listed on the closing checklist, in each case, each reasonably satisfactory in form and substance to the Administrative Agent.

(s) Representations and Warranties . All representations and warranties contained in this Agreement and the other Loan Documents shall be true and correct on and as of the Closing Date with the same effect as if made on and as of such date except to the extent such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct as of such earlier date.

(t) No Default . At the time of and immediately after giving effect to the execution and delivery of this Agreement, no Default shall have occurred and be continuing.

The execution and delivery by the Borrower of this Agreement on the Closing Date shall be deemed to be a representation and warranty by the Borrower that the conditions specified in this Section 4.01 have been satisfied or waived at that time.

Section 4.02 Conditions Precedent to Funding Date . The obligation of the Lenders to make the Term Loans on the Funding Date is subject to the satisfaction (or waiver in accordance with Section 9.02 ) of the following conditions precedent:

(a) Notice . The Administrative Agent shall have received a notice with respect to such borrowing as required by Article II .

(b) Representations and Warranties . All representations and warranties contained in this Agreement and the other Loan Documents shall be true and correct on and as of the Funding Date with the same effect as if made on and as of such date except to the extent such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct as of such earlier date.

(c) No Default . At the time of and immediately after giving effect to the making of the Term Loans, no Default shall have occurred and be continuing.

(d) Payment of Fees . Parent or the Borrower shall have paid to the Administrative Agent the then unpaid balance of all accrued and unpaid Fees then due under and pursuant to this Agreement and the Fee Letter.

The acceptance by the Borrower of the proceeds of the Term Loans on the Funding Date shall be deemed to be a representation and warranty by the Borrower that the conditions specified in this Section 4.02 have been satisfied or waived at that time. The Administrative Agent may (but shall not be obligated to) require a duly completed compliance certificate with respect to the foregoing as a condition to making the Term Loans.

ARTICLE V
AFFIRMATIVE COVENANTS

From the date hereof and for so long as any Commitment shall be in effect or any Term Loan shall remain outstanding or any amount shall remain outstanding or unpaid under this Agreement or any other Loan Document, the Borrower and each of the Guarantors agree, jointly and severally with the Borrower and each other Guarantor, that the Borrower and each of the Guarantors will:

Section 5.01 Financial Statements, Reports, etc. In the case of the Borrower and the Guarantors, deliver to the Administrative Agent:

(a) on or before the date upon which Parent’s annual report on Form 10-K is required to be filed with the SEC (and in any event within one hundred five (105) days after the end of each Fiscal Year), Parent’s (i) audited consolidated balance sheet and related statements of income, stockholders’ equity and cash flows, showing the financial condition of Parent and its Subsidiaries on a consolidated basis as of the close of such Fiscal Year and the results of their operations during such year, such consolidated financial statements to be audited for Parent and its Subsidiaries by Deloitte & Touche LLP or other independent public accountants of recognized national standing and accompanied by an audit opinion of such accountants (without (i) in the case of Fiscal Years ending on or after December 31, 2006, a “going concern” or like qualification, exception, or explanatory paragraph and (ii) in the case of

any Fiscal Year, without any qualification or exception as to the scope of such audit) and to be certified by a Financial Officer of Parent to the effect that such consolidated financial statements fairly present the financial condition and results of operations of Parent and its Subsidiaries on a consolidated basis in accordance with GAAP and (ii) unaudited consolidating balance sheet and related unaudited consolidating statements of income as of the close of the fourth Fiscal Quarter and as of the close of such Fiscal Year, all such consolidating financial statements showing separately the financial condition of Parent and its Significant Subsidiaries; provided , however , that any document required to be delivered pursuant to this Section 5.01(a) shall be deemed to have been furnished to the Administrative Agent if the Borrower or Parent has provided the Administrative Agent with a link to such documents that have been made available through its website or that have been filed with the SEC via EDGAR;

(b) on or before the date upon which Parent’s quarterly report on Form 10-Q is required to be filed with the SEC (and in any event, within fifty (50) days after the end of each of the first three Fiscal Quarters of Parent), Parent’s (i) unaudited consolidated balance sheets and related unaudited statements of income, stockholders’ equity and cash flows, showing the financial condition of Parent and its Subsidiaries on a consolidated basis as of the close of such Fiscal Quarter and the results of their operations during such Fiscal Quarter and the then elapsed portion of the Fiscal Year, certified by a Financial Officer of Parent as fairly presenting the financial condition and results of operations of Parent and its Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes and (ii) unaudited consolidating balance sheet and related unaudited consolidating statements of income as of the close of the such Fiscal Quarter, all such consolidating financial statements showing separately the financial condition of Parent and its Significant Subsidiaries; provided , however , that any document required to be delivered pursuant to this Section 5.01(b) shall be deemed to have been furnished to the Administrative Agent if the Borrower or Parent has provided the Administrative Agent with a link to such documents that have been made available through its website or that have been filed with the SEC via EDGAR;

(c) commencing with the first Fiscal Month following the Closing Date as soon as available, but no more than 30 days after the end of each month, the unaudited consolidated balance sheet as of the close of such Fiscal Month and related unaudited consolidated statements of income and cash flow of Parent and its Subsidiaries during such month and the year to date period;

(d) (i) concurrently with any delivery of financial statements under paragraphs (a) , (b) and (c) above, a certificate of a Financial Officer of Parent certifying that such financial statements fairly present the financial condition and results of operations of Parent and its Subsidiaries in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes; and (ii) concurrently with any delivery of financial statements under paragraph (a) above, a certificate in accordance with prevailing professional standards (which certificate may be limited to accounting matters and disclaim responsibility for legal interpretations) of the accountants auditing the consolidated financial statements delivered under paragraph (a) above certifying that, in the course of the regular audit of the business of Parent and its Subsidiaries, such accountants have obtained no knowledge that a Default or Event of Default has occurred and is continuing or if, in the opinion of such accountants, a Default or

Event of Default has occurred and is continuing, specifying the nature thereof and all relevant facts with respect thereto;

(e) as soon as available, but not more than sixty (60) days after the end of each Fiscal Year, commencing with the Fiscal Year ending December 31, 2006, a copy of the plan and forecast (including a projected consolidated balance sheet, income statement and funds flow statement) of Parent on a consolidated basis for each month of the then current Fiscal Year (the “ Projections ”) in form reasonably satisfactory to the Administrative Agent;

(f) such other information respecting the Borrower, any Guarantor or any of their Subsidiaries as the Administrative Agent may from time to time reasonably request;

(g) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower, any Guarantor or any of their Subsidiaries with the SEC ( provided that any such documents shall be deemed delivered on the date the Borrower or Parent provides to Administrative Agent a link to where such documents were filed electronically via EDGAR or such documents have been made publicly available on Parent’s website), or any governmental authority succeeding to any of or all the functions of said commission, or with any national securities exchange, as the case may be;

(h) as soon as available and in any event within thirty (30) days after the Borrower or any ERISA Affiliate knows that any Termination Event has occurred with respect to any Plan, a statement of a Financial Officer of Parent describing the full details of such Termination Event and the action, if any, which the Borrower or such ERISA Affiliate is required or proposes to take with respect thereto, together with any notices required or proposed to be given to or filed with or by the Borrower, such ERISA Affiliate, the PBGC, a Plan participant or the Plan administrator with respect thereto;

(i) promptly and in any event within ten (10) days after receipt thereof by the Borrower or any ERISA Affiliate from a Multiemployer Plan sponsor, a copy of each notice received by the Borrower or any ERISA Affiliate concerning (A) the imposition of Withdrawal Liability by a Multiemployer Plan, (B) the determination that a Multiemployer Plan is, or is expected to be, in reorganization within the meaning of Title IV of ERISA, (C) the termination of a Multiemployer Plan within the meaning of Title IV of ERISA, or (D) the amount of liability incurred, or which may be incurred, by the Borrower or any ERISA Affiliate in connection with any event described in clause (A), (B) or (C) above;

(j) promptly and in any event within ten (10) days after receipt thereof by the Borrower or any ERISA Affiliate from the PBGC copies of each notice received by the Borrower or any such ERISA Affiliate of the PBGC’s intention to terminate any Single Employer Plan of the Borrower or such ERISA Affiliate other than the Terminated Plans or to have a trustee appointed to administer any such Plan;

(k) within 10 days after notice is given or required to be given to the PBGC under Section 302(f)(4)(A) of ERISA of the failure of the Borrower or any ERISA Affiliate to make timely payments to a Plan other than such payments as are required to be made within 31 days after the effective date of the Settlement Agreement, a copy of any such notice

filed and a statement of a Financial Officer of Parent setting forth (A) sufficient information necessary to determine the amount of any lien under Section 302(f)(3), (B) the reason for the failure to make the required payments and (C) the action, if any, which the Borrower or any ERISA Affiliate proposed to take with respect thereto;

(l) promptly upon obtaining knowledge thereof, notice by the holder of any Equity Interests of the Borrower or any Guarantor or the holder of any Indebtedness of the Borrower or any Guarantor in excess of $20,000,000 that any default exists with respect thereto or that the Borrower or any Guarantor is not in compliance therewith;

(m) promptly upon receipt thereof, any notice of any governmental investigation or any litigation commenced or threatened against the Borrower or any Guarantor that could reasonably be expected to have a Material Adverse Effect;

(n) promptly upon the Borrower or any Guarantor obtaining knowledge thereof, notice of any Lien (other than Permitted Liens and other Liens permitted under the Loan Documents) or any claim made or asserted against the Collateral having a value in excess of $5,000,000;

(o) promptly upon the commencement thereof, notice of any proceedings with respect to any Tax, fee, assessment, or other governmental charge in excess of $5,000,000;

(p) promptly upon obtaining knowledge thereof, notice of any loss, damage, or destruction to Collateral having a book value of $5,000,000 or more, whether or not covered by insurance;

(q) immediately after the Borrower or any Guarantor obtaining knowledge thereof, notice of any pending strike, work stoppage, unfair labor practice claim, or other labor dispute affecting the Borrower, any Guarantor or any of their respective Subsidiaries in a manner which could reasonably be expected to have a Material Adverse Effect; and

(r) promptly upon obtaining knowledge thereof, notice of any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

With respect to any report, balance sheet, statement, certificate, plan, forecast, schedule, summary or other document delivered by Parent or the Borrower to the Administrative Agent pursuant to clauses (a) through (f) of this Section , the Administrative Agent shall deliver each such document to the Lenders by complying with the requirements contained in Section 9.01 or by posting such document to Intralinks or an equivalent means of electronic delivery to which the Lenders have access. Each notice delivered under clauses (j) through (r) of this Section shall be accompanied by a statement of a Financial Officer or other executive officer of Parent or the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

Section 5.02 Corporate Existence . Preserve and maintain in full force and effect all governmental rights, privileges, qualifications, permits, licenses and franchises necessary or

desirable in the normal conduct of its business except (i) if (A) in the reasonable business judgment of Parent, it is in the best economic interest of the Borrower and the Guarantors taken as a whole not to preserve and maintain such rights, privileges, qualifications, permits, licenses and franchises, and (B) such failure to preserve the same could not, in the aggregate, reasonably be expected to have a Material Adverse Effect on the operations, business, properties, assets, prospects or financial condition (of the Borrower and the Guarantors, taken as a whole, and (ii) as otherwise permitted in connection with sales of assets permitted by Section 6.10 .

Section 5.03 Insurance . Maintain with financially sound and reputable carriers acceptable to the Administrative Agent in its Permitted Discretion (including, consistent with past practice, insurance companies affiliated with Parent), insurance with respect to their Properties and business (including business interruption insurance, fire insurance and public liability insurance) in such amounts, of such character and against such risks acceptable to the Administrative Agent in its Permitted Discretion and as are usually maintained by companies engaged in the same or similar business or having comparable properties, and in any case having a coverage which is not materially less than the insurance of such type maintained by the Borrower and the Guarantors on the date of this Agreement, provided that neither the Borrower nor any Guarantor will use or permit any property to be used in any manner which might render inapplicable any insurance coverage; provided , however , that all such proceeds shall be applied in accordance with Section 2.06 . Upon repayment in full of all obligations outstanding under the Revolving Loan Facility and termination of the commitments thereunder, all property insurance covering Collateral maintained by the Borrower and the Guarantors shall name the Collateral Agent as sole loss payee. All liability insurance maintained by the Borrower and the Guarantors with respect to occurrences arising out of or relating to the Collateral shall name the Administrative Agent, the Collateral Agent and the Lenders as additional insured. All such property and liability insurance shall further provide for at least thirty (30) days’ prior written notice (ten (10) days’ prior written notice with respect to cancellation for non-payment of premium or at the request of the insured) to the Administrative Agent of the cancellation or substantial modification thereof.

Section 5.04 Obligations and Taxes . With respect to the Borrower and each Guarantor, pay all its material obligations promptly and in accordance with their terms and pay and discharge promptly all material Taxes imposed upon it or upon its income or profits or in respect of its property, before the same shall become delinquent, as well as all material lawful claims for labor, materials and supplies or otherwise which, if unpaid, would become a Lien or charge upon such properties or any part thereof (other than a Permitted Lien); provided , however , that neither the Borrower nor any Guarantor shall be required to pay and discharge or to cause to be paid and discharged any such obligation, Tax or claim to the extent that (i) it is being contested in good faith by appropriate proceedings, (ii) adequate reserves for it have been set aside on the books of the Borrower and the Guarantors, and (iii) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

Section 5.05 Notice of Event of Default, etc. Promptly but no later than five (5) Business Days after the Borrower has knowledge of a Default or an Event of Default, give to the Administrative Agent notice in writing of such Default or Event of Default.

Section 5.06 Access to Books and Records . Maintain or cause to be maintained at all times true and complete books and records in accordance with GAAP of the financial operations of the Borrower and the Guarantors; and provide the Agents and their representatives and advisors access to all such books and records during regular business hours, in order that the Agents may upon reasonable prior notice examine and make abstracts from such books, accounts, records, appraisals and other papers for the purpose of verifying the accuracy of the various reports delivered by the Borrower or the Guarantors to the Agents or the Lenders pursuant to this Agreement or for otherwise ascertaining compliance with this Agreement; and at any reasonable time and from time to time during regular business hours, upon reasonable notice and with reasonable frequency, permit the Agents and any agents or representatives (including, without limitation, appraisers) thereof to visit the properties of the Borrower and the Guarantors and to conduct examinations of and to monitor the Collateral held by the Collateral Agent, in each case at the expense of the Borrower.

Section 5.07 Projections . Make the Financial Officers of Parent available to discuss the Projections (copies of which have heretofore been delivered to the Administrative Agent and the Lenders pursuant to clause (o) of Section 4.01 or Section 5.01(e) (as applicable)) with the Administrative Agent and/or the Lenders upon the Administrative Agent’s reasonable request.

Section 5.08 Maintenance of Properties and Intellectual Property Rights . (a) Keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, and (b) obtain and maintain in effect at all times all material intellectual property rights, licenses and permits, which are necessary for it to own its property or conduct its business as currently conducted and not dispose of, grant, or permit to lapse any rights to any material intellectual property except as otherwise expressly permitted hereunder.

Section 5.09 Compliance with Laws . Comply in all material respects with all laws (except those relating to Environmental Laws, which compliance is subject to Section 5.12 ), rules, regulations and orders of any Governmental Authority applicable to it or its property.

Section 5.10 Use of Proceeds . Use the proceeds of the Term Loans only for (i) refinancing of the amounts outstanding under the Existing Credit Agreement, (ii) financing of administrative expenses incurred in connection with emerging from bankruptcy, (iii) payment of the Claims contemplated by the Reorganization Plan, (iv) working capital and capital expenditures, including Permitted Acquisitions, (v) other general corporate purposes of the Borrower and the Guarantors and (vi) payment of any related transaction costs, fees and expenses. Such proceeds may not be used (a) in connection with the investigation (including discovery proceedings), initiation or prosecution of any claims, causes of action, adversary proceedings or other litigation against the Lenders or the Agents in their capacities as such and (b) for any purpose that would violate any of the Regulations of the Board, including Regulations T, U and X.

Section 5.11 Additional Collateral; Further Assurances . (a) Unless the Required Lenders otherwise consent and subject to the requirements of applicable law, cause each of its wholly owned Subsidiaries (excluding any foreign Subsidiary and all Excluded Subsidiaries)

formed or acquired after the Closing Date in accordance with the terms of this Agreement to (i) become a Guarantor by executing a Joinder Agreement substantially in the form of Exhibit E hereto (the “ Joinder Agreement ”) and (ii) grant Liens to the Collateral Agent, for the benefit of the Administrative Agent, the Collateral Agent and the Lenders, in any Property of such new Guarantor, as the case may be, which constitutes Collateral.

(b) Cause (i) 100% of the issued and outstanding Equity Interests of (A) each of the Borrower’s and each Guarantor’s domestic Subsidiaries and (B) Reorganized KACC (provided however that neither this provision nor any such pledge of Reorganized KACC shall effect, nor shall either be construed as effecting, a pledge of the Equity Interests of any Subsidiary of Reorganized KACC) and Kaiser Bauxite, and (ii) 65% of the issued and outstanding Equity Interests in (A) each foreign Subsidiary directly owned by the Borrower or any Guarantor and (B) Trochus, to be subject at all times to a first priority Lien in favor of the Collateral Agent (second priority so long as the Revolving Loan Facility is in existence) pursuant to the terms and conditions of the Loan Documents or other security documents as the Agents shall reasonably request; provided , that , with respect to (y) any Subsidiary that is organized outside of the United States, Canada, or Bermuda, and is not a Significant Subsidiary, and (z) Trochus, no Borrower or Guarantor shall be required to take any action under the laws of the jurisdiction of organization of such Person to perfect or register the pledge of such shares and that the Borrower and the Guarantors shall have until the date that is the 30th day after the Closing Date to perfect the pledge of shares of (i) KACL under the laws of Canada or Ontario and (ii) Trochus under the laws of Bermuda.

(c) Execute and deliver, or cause to be executed and delivered, to the Agents such documents and agreements, and take or cause to be taken such actions as the Agents may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents, including but not limited to all items of the type required by Article IV (as applicable).

(d) If any material assets (including any real Property or improvements thereto or any interest therein) are acquired by the Borrower or any Guarantor after the Closing Date (other than assets constituting Collateral under the Security and Pledge Agreement that become subject to a Lien in favor of the Collateral Agent upon acquisition thereof), notify the Agents and the Lenders thereof, and, if requested by any Agent or the Required Lenders after consultation with the Borrower, the Borrower will cause such assets to be subjected to a Lien securing the Obligations and will take, or cause the Guarantors to take, such actions as shall be necessary or reasonably requested by any Agent, to grant and perfect such Lien, including actions described in Section 5.11(c) and, in the case of acquired owned real Property, a Mortgage, all at the expense of the Borrower.

(e) If the Borrower or any Guarantor delivers to the “Administrative Agent” or the “Lenders” under, and as defined in, the Revolving Loan Documents, any environmental reports, surveys, documentation regarding flood insurance, title insurance policies or commitments, appraisals, opinions of local counsel, UCC fixture financing statements, or other documentation pursuant to the terms of the Revolving Loan Documents with respect to any real Property (i) listed on Schedule 4.01(e) or (ii) with respect to which a mortgage has been delivered pursuant to Section 5.11(c) , such Borrower or Guarantor shall simultaneously deliver

to the Administrative Agent comparable documents, mutatis mutandis , for the benefit of the Administrative Agent, the Collateral Agent and/or the Lenders, as applicable.

Section 5.12 Environmental Covenant . The Borrower and the Guarantors will, and will cause each of their Subsidiaries to:

(b) (i) as soon as possible and in any event not later than fifteen (15) Business Days after the Borrower becomes aware of the receipt thereof, notify the Administrative Agent and provide copies of all written claims, complaints, notices, or inquiries by a Governmental Authority, or any Person which has commenced a legal proceeding against the Borrower, any of the Guarantors, or any of their Subsidiaries, relating to compliance by the Borrower, any of the Guarantors or any of their Subsidiaries with, or potential liability of the Borrower, any of the Guarantors or any of their Subsidiaries under, Environmental Laws; and

(ii) with reasonable diligence cure all environmental defects and conditions which are the subject of any actions and proceedings against the Borrower, any of the Guarantors or any of their Subsidiaries relating to compliance with Environmental Laws, except to the extent such actions and proceedings (or the obligation of the Borrower, any of the Guarantors or any of their Subsidiaries to cure such defects and conditions) are stayed or are being contested by the Borrower, any of the Guarantors or any of their Subsidiaries in good faith by appropriate proceedings; and

(c) provide such information, access, and certifications which the Administrative Agent may reasonably request form time to time to evidence compliance with this Section 5.12 .

ARTICLE VI
NEGATIVE COVENANTS

From the date hereof and for so long as any Commitment shall be in effect or any amount shall remain outstanding or unpaid under this Agreement, the Borrower and each Guarantor covenants and agrees that it will not, nor will it permit any of their respective Significant Subsidiaries to ( provided that nothing in this Article VI shall prohibit (x) the consummation of the Restructuring Transactions on or about the Consummation Date or (y) the creation or funding of the PI Trusts with the PI Trust Assets, in each case, pursuant to, and in accordance with, the Reorganization Plan):

Section 6.01 Liens . Incur, create, assume or suffer to exist any Lien on any asset of the Borrower or any Guarantor, now owned or hereafter acquired by the Borrower or any Guarantor, other than (i) Liens described in Schedule 3.06 ; (ii) Permitted Liens; (iii) Liens in favor of the Collateral Agent and the Lenders securing the Obligations; (iv) Liens securing the

“Secured Obligations” (as defined in the Revolving Loan Documents) granted pursuant to the Revolving Loan Documents; (v) Liens securing purchase money Indebtedness or Capital Leases permitted by Section 6.03(iii) ; provided that (y) such security interests and the Indebtedness secured thereby are incurred prior to or within ninety (90) days after acquisition of the financed Property or assets; and (z) such security interests shall not apply to any property or assets of the Borrower, any Guarantor or any of their Subsidiaries other than assets or property financed by such Indebtedness or subject to such Capital Leases; (vi) Liens securing judgment for the payment of money not constituting an Event of Default under Section 7.01(k) ; (vii) Liens on property of a Person existing at the time such Person is merged into or consolidated with a Borrower or Guarantor or Significant Subsidiary or becomes a Borrower or Guarantor or a Significant Subsidiary or on any acquired property, in each case, in connection with an Investment or acquisition permitted under Section 6.07 ; provided that (x) such Liens were not created in contemplation of or in connection with such acquisition or such Person becoming a Borrower or Guarantor or a Significant Subsidiary, as the case may be, (y) such Lien shall not apply to any other property or assets of such Person, and (z) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Borrower or Guarantor or a Significant Subsidiary, as the case may be, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount of the obligations secured by such Lien and that are otherwise permitted hereunder; and (viii) precautionary UCC filings by lessors under operating leases covering the Property subject to such leases and UCC filings in respect of Liens permitted under this Section 6.01 .

Section 6.02 Merger, etc. Consolidate or merge with or into another Person; provided that (i) any Guarantor, other than Parent, may dissolve, merge or liquidate with or into the Borrower so long as the Borrower is the entity surviving such merger; (ii) any Guarantor may dissolve, merge or liquidate with or into any other Guarantor, so long as, in the case of a merger with Parent, Parent is the entity surviving such merger; (iii) any Subsidiary of the Borrower or a Guarantor may dissolve, merge or liquidate with or into the Borrower or a Guarantor so long as the Borrower or Guarantor is the entity surviving any such dissolution, merger or liquidation; (iv) any Subsidiary of the Borrower or a Guarantor that is not the Borrower or a Guarantor may dissolve, merge or liquidate with or into any other Subsidiary of the Borrower or a Guarantor other than an Excluded Subsidiary; and (v) in connection with any Permitted Acquisition under Section 6.07(vi) , any subsidiary of the Borrower or Guarantor may merge or consolidate with another Person or permit any other Person to merge into or consolidate with it (subject to clause (f) of the definition of the term “ Permitted Acquisition ”).

Section 6.03 Indebtedness . Contract, create, incur, assume or suffer to exist any Indebtedness, except for (i) the Obligations; (ii) Revolving Loan Indebtedness and extensions, refinancings, refundings, replacements or renewals of such Indebtedness, provided that the sum of (x) the aggregate principal amount of all “Loans” (as defined in the Revolving Loan Documents), plus (y) without duplication of amounts included in clause (x), the aggregate amount of “Letter of Credit Exposure” (as defined in the Revolving Loan Documents) shall not exceed $275,000,000; (iii) Indebtedness with respect to existing Capital Lease Obligations and purchase money Indebtedness for fixed or capital assets and extensions, refinancings, replacements or renewals of such Indebtedness permitted by clause (xii) below; (iv) intercompany Indebtedness of the Borrower or any Guarantor to the Borrower or any Guarantor; provided such intercompany Indebtedness is subordinated to the Obligations pursuant to an

Intercompany Subordination Agreement substantially in the form of Exhibit G hereto (the “ Intercompany Subordination Agreement ”) or otherwise in a manner satisfactory to the Administrative Agent; (v) Indebtedness arising from Investments (other than Permitted Acquisitions) permitted by Section 6.07 and Indebtedness of a Person existing at the time such Person is merged into or consolidated with a Borrower or Guarantor or Significant Subsidiary or becomes a Borrower or Guarantor or a Significant Subsidiary, in each case, in connection with an Investment or acquisition permitted under Section 6.07 ; provided that such Indebtedness was not incurred in contemplation of or in connection with such Investment or Permitted Acquisition; (vi) Indebtedness in respect of obligations pursuant to any Permitted Commodity Swap Agreement; (vii) Indebtedness incurred by the Borrower or any Guarantor under Swap Agreements entered into in the ordinary course of financial management and not for speculative purposes; provided that , except to the extent any such Indebtedness is a “Secured Obligation” under (and as defined in) the Revolving Loan Documents, all such obligations shall be unsecured; (viii) Indebtedness in respect of performance, surety and appeal bonds arising in the ordinary course of business; (ix) Indebtedness existing on the Closing Date and described on Schedule 6.03 and extensions, refinancings, replacements or renewals of such Indebtedness permitted by clause (xii) below; (x) Guarantees by the Borrower or any Guarantor of Indebtedness of Parent or any Subsidiary and by Parent or any Subsidiary of Indebtedness of the Borrower or any Guarantor or any other Subsidiary, provided that (1) the Indebtedness so Guaranteed is permitted by this Section 6.03 , (2) Guarantees by the Borrower or any Guarantor of Indebtedness of any Subsidiary that is not a Borrower or Guarantor shall be subject to Section 6.07 , and (3) Guarantees permitted under this clause (x) shall be subordinated to the Obligations of the Borrower or applicable Guarantor on the same terms as the Indebtedness so Guaranteed is subordinated to the Obligations; (xi) Indebtedness in respect of advanced payments by customers under purchase contracts in the ordinary course of business of the Borrower or applicable Guarantor; (xii) Indebtedness incurred that represents an extension, refinancing, or renewal of any of the Indebtedness described in clauses (iii) and (ix) hereof; provided that (1) the principal amount of such Indebtedness is not increased, (2) any Liens securing such Indebtedness are not extended to any additional property of the Borrower or any Guarantor, except to the extent that the Lien of the Collateral Agent extends to (and is a perfected, first priority Lien in) such additional property, (3) the Borrower or Guarantor that is obligated with respect to repayment of such Indebtedness at the time of such refinancing is not required to become obligated with respect thereto, (4) such extension, refinancing, replacement or renewal does not result in a shortening of the average weighted maturity of the Indebtedness so extended, refinanced, replaced or renewed, (5) the terms of any such extension, refinancing, replacement or renewal are not less favorable to the obligor thereunder than the original terms of such Indebtedness, and (6) the terms and conditions of the refinancing, renewal, replacement or extension Indebtedness include subordination terms and conditions that are at least as favorable to the Administrative Agent and the Lenders as those that were applicable to the refinanced, renewed, replaced or extended Indebtedness; (xiv) Indebtedness owed to JPMorgan Chase or any Affiliate of the “Administrative Agent” (under and as defined in the Revolving Loan Documents) in respect of any “Banking Services Obligations” (as defined in the Revolving Loan Documents), and (xv) other unsecured Indebtedness not to exceed $20,000,000 in the aggregate at any time outstanding.

Section 6.04 Guarantees and Other Liabilities . Purchase or repurchase (or agree, contingently or otherwise, so to do) the Indebtedness of, or assume, Guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance of

any obligation or capability of so doing, or otherwise), endorse or otherwise become liable, directly or indirectly, in connection with the obligations, stock or dividends of any Person, except (i) for any guaranty of Indebtedness or other obligations of the Borrower or any Guarantor if such Person could have incurred such Indebtedness or obligations under this Agreement; (ii) by endorsement of negotiable instruments for deposit or collection in the ordinary course of business; and (iii) with respect to Guarantees of Indebtedness pursuant to clause (ii) , (viii) or (x) of Section 6.03 .

Section 6.05 Dividends; Capital Stock . Declare or pay, directly or indirectly, any dividends or make any other distribution or payment, whether in cash, property, securities or a combination thereof, with respect to (whether by reduction of capital or otherwise) any shares of capital stock or membership interests (or any options, warrants, rights or other equity securities or agreements relating to any capital stock or membership interests), or set apart any sum for the aforesaid purposes (all of the foregoing, “ Restricted Payments ”); provided that (i) any Guarantor may pay dividends to the Borrower and to any other Guarantor that is its direct parent; (ii) the Borrower or any Guarantor may declare and pay dividends ratably with respect to their Equity Interests; (iii) the Borrower may pay dividends to any Guarantor that is its direct parent, and (iv) Parent may make Restricted Payments, so long as at the time of and after giving effect to such Restricted Payment, (A) no Default is continuing or would result therefrom and (B) the amount of such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Parent after the Closing Date, is less than the sum of (1) 50% of the Net Income of Parent and its Subsidiaries for the period, taken as one accounting period, from the “Closing Date” (under and as defined in the Revolving Loan Documents) to the end of Parent’s most recently ended Fiscal Quarter for which financial statements complying with Section 5.01(a) or 5.01(b) (as applicable) have been delivered at the time of such Restricted Payment, or, if such Net Income for such period is a deficit, less 100% of such deficit, plus (2) up to 100% of the proceeds (such proceeds to be determined in accordance with clause (c) of the definition of Net Proceeds without giving effect to the proviso therein) from the sale or issuance by Parent of any of its Equity Interest remaining after making any mandatory prepayment of Net Proceeds that may be required at such time, if any, pursuant to Section 2.06(b) and not used to make any Investments or other Restricted Payments, plus (3) $2,000,000.

Section 6.06 Transactions with Affiliates . Sell or transfer any property or assets to, or otherwise engage in any other material transactions with, any of its Affiliates (other than the Borrower and the Guarantors), other than (i) any transaction (or, in the case of a series of related transactions, any series of related transactions taken as a whole) in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower or such Guarantor than could be obtained on an arm’s-length basis from unrelated third parties; (ii) dividends, distributions or payments permitted under Section 6.05 ; (iii) issuances of securities pursuant to employee stock benefit plans approved by the board of directors of such person; (iv) granting of stock options to employees or directors pursuant to a plan approved by the board of directors of such person; (v) loans or advances to employees permitted pursuant to Section 6.07 ; and (vi) reasonable fees to directors of the Borrower, any Guarantor or any Significant Subsidiary who are not employees of the Borrower, any Guarantor or any Significant Subsidiary.

Section 6.07 Investments, Loans, Advances, Guaranties and Acquisitions . Purchase, hold or acquire (including pursuant to a merger with any Person that was not the

Borrower, a Guarantor or a wholly-owned subsidiary of the Borrower or a Guarantor prior to such merger) any capital stock, evidences of indebtedness or other securities of (including any option, warrant or other right to acquire any of the foregoing), make or permit to exist any loans or advances to Guarantee any obligations of, or make or permit to exist any investment in, any other Person or purchase or otherwise acquire (in one transaction or series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise) (all of the foregoing, “ Investments ”), except for (i) ownership by the Borrower and the Guarantors of the capital stock or membership interests of each of their Subsidiaries; provided that no further equity investments may be made in any such Person that is not the Borrower or a Guarantor; (ii) Investments of the Borrower in any Guarantor; (iii) Investments of any Guarantor in the Borrower or another Guarantor; (iv) Investments by Subsidiaries that are not a Guarantor in the Borrower, a Guarantor or a Significant Subsidiary, provided that any such Investment which is a loan, advance, guaranty or other debt Investment shall be subordinated to the Obligations pursuant to the Intercompany Subordination Agreement, or such other form acceptable to the Administrative Agent; (v) Permitted Investments; (vi) Permitted Acquisitions; (vii) advances and loans to KACL in the ordinary course of business consistent with past practices, provided that no Event of Default has occurred and is continuing, and provided further that in no event shall the aggregate principal amount of advances or loans made after the Closing Date be greater than $20,000,000 at any one time outstanding; (viii) advances and loans to, and Investments in, Trochus in the ordinary course of business consistent with past practices; provided that no Event of Default has occurred and is continuing, and provided further that in no event shall the sum of (A) the aggregate principal amount of such advances or loans made after the Closing Date at any one time outstanding plus (B) the amount of such Investments (other than such advances and loans under clause (A) above) made after the Closing Date in the aggregate be greater than $10,000,000; (ix) Investments in the form of advance payments in connection with any Permitted Commodity Swap Agreement; (x) Investments in respect of, including by way of contributions to, voluntary employee beneficiary associations established for the benefit of certain hourly retirees and for the benefit of certain salaried retirees pursuant to agreements, as amended and/or modified, that KACC and Kaiser Bellwood negotiated with the United Steelworkers of America, the International Association of Machinists and Aerospace Workers, the Official Committee of Retired Employees in the Cases, the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America and/or its Local Union No. 1186, the Paper, Allied-Industrial, Chemical and Energy Workers International Union, AFL-CIO, CLC and the International Chemical Workers Union Council-United Food & Commercial Workers and approved by orders of the Bankruptcy Court entered on March 22, 2004, March 25, 2004, June 1, 2004, February 1, 2005, October 21, 2005 and January 9, 2006; (xi) loans or advances made by the Borrower or a Guarantor to its employees in the ordinary course of business for travel and entertainment expenses, relocation costs and similar purposes (up to a maximum of $2,000,000 in the aggregate at any one time outstanding), and loans or advances to directors, officers or employees of the Borrower or any Guarantor the proceeds of which are concurrently used to purchase Equity Interests in the Borrower or a Guarantor; (xii) Investments described on Schedule 6.07 hereto and modifications, extensions, and renewals of such Investments; (xiii) other Investments not to exceed $20,000,000 in the aggregate at any time outstanding; and (xiv) advances and loans to Reorganized KACC from time to time in accordance with the Reorganization Plan, provided that in no event shall the

aggregate principal amount of such advances or loans made after the Closing Date be greater than $10,000,000 at any one time outstanding.

Section 6.08 Creation of Subsidiaries . Create or acquire any Subsidiary of the Borrower or any Guarantor after the Closing Date except for Subsidiaries created or acquired in accordance with the terms of Section 5.11 .

Section 6.09 Disposition of Assets . Sell or otherwise dispose of any assets (including, without limitation, the Equity Interests of any Subsidiary), except for (i) sales of Permitted Investments; (ii) sales of inventory in the ordinary course of business; (iii) dispositions of surplus, obsolete or damaged assets no longer used in the business of Parent and its Subsidiaries; (iv) sales of assets set forth on Schedule 1.01(a) or Schedule 6.09 hereto (v) the disposition of assets by Parent or any of its Subsidiaries in any single transaction or series of related transactions with an aggregate fair market value of less than $500,000; (vi) the disposition of assets by Parent or its Subsidiaries not otherwise permitted under this Section 6.09 having a fair market value not exceeding $10,000,000 (excluding the fair market value of any asset sold or disposed of in an Excluded Asset Sale) in the aggregate in each Fiscal Year; provided that at least 75% of the consideration received by Parent or a Subsidiary of Parent in connection with such disposition shall be cash or assets that can be readily converted to cash without discount within ninety (90) days; (vii) dispositions of property by (A) the Borrower to any Guarantor, (B) Parent or any Subsidiary to the Borrower or any other Guarantor, and (C) any Subsidiary (other than Borrower) that is not a Guarantor to any other Subsidiary (other than Borrower) that is not a Guarantor; (ix) the grant of any Liens permitted under Section 6.01 ; (ix) non-exclusive licenses of intellectual property in the ordinary course of business; and (x) sale-leaseback transactions with respect to fixed or capital assets, provided that any such sale is made for cash consideration in an amount not less than the fair market value of such asset and is consummated within ninety (90) days of the acquisition or completion of construction of such asset by such Person.

Section 6.10 Nature of Business . Modify or alter in any material manner the nature and type of its business as conducted on the Closing Date or the manner in which such business is conducted (except such activities as may be incidental or related thereto or reasonably related extensions thereof), it being understood that dispositions of assets permitted by Section 6.09 shall not constitute such a material modification or alteration.

Section 6.11 Restrictive Agreements . Enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Guarantor or any of their Significant Subsidiaries to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary of the Borrower or any Guarantor to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to Parent or any Subsidiary of Parent or to guarantee Indebtedness of Parent or any Subsidiary of Parent; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by this Agreement or the Revolving Loan Documents, (ii) the foregoing shall not apply to restrictions and conditions existing on the Closing Date which are identified on Schedule 6.11 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition); (iii) the foregoing shall not apply to customary restrictions and

conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder; (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement; and (v) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.

Section 6.12 Prepayment of Indebtedness; Subordinated Indebtedness . (a)Directly or indirectly, voluntarily purchase, redeem, defease or prepay any principal of, premium, if any, interest on or other amount payable in respect of any Indebtedness prior to its scheduled maturity, other than (i) the “Secured Obligations” (as defined in the Revolving Loan Documents); (ii) the Obligations; (iii) Capital Lease Obligations permitted by Section 6.03(iii) not to exceed $10,000,000 in the aggregate in any Fiscal Year; (iv) prepayment of Indebtedness in connection with the cancellation, termination or unwinding of Permitted Commodity Swap Agreements; (v) prepayment of Indebtedness in connection with the cancellation, termination or unwinding of Swap Obligations described in Section 6.03(vii) ; and (vi) prepayments in respect of Indebtedness in respect of advanced payments permitted by Section 6.03(xi) .

(b) (i) Make any amendment or modification to any indenture, note or other agreement evidencing or governing any Indebtedness of such Person the payment of which is subordinated to payment of the Obligations, which amendment or modification has the effect of (v) shortening the maturity thereof, (w) accelerating the date of any payment of principal or interest thereunder, (x) increasing the interest rate or fees payable thereunder or converting any interest payable in kind to current cash pay interest, (y) amending, modifying, supplementing or otherwise modifying any of the subordination provisions of such indenture, note or other agreement or (z) making any provision of such indenture, note or other agreement more restrictive or burdensome on the Borrower, any Guarantor or any Subsidiary of the Borrower or any Guarantor or (ii) directly or indirectly voluntarily prepay, defease or in substance defease, purchase, redeem, retire or otherwise acquire, any such Indebtedness.

Section 6.13 Fixed Charge Coverage . Permit the Fixed Charge Coverage Ratio as of the last day of any trailing fiscal period of Parent set forth below to be less than the ratio set forth opposite such period:


Period Ending	Fixed Charge Coverage Ratio
the Fiscal Quarter ending September 30, 2006		1.00:1.00

the last two Fiscal Quarters ending December 31, 2006		1.00:1.00

the last three Fiscal Quarters ending March 31, 2007		1.00:1.00

the last four Fiscal Quarters ending June 30, 2007		1.00:1.00

the last four Fiscal Quarters ending the last day of each Fiscal Quarter thereafter		1.10:1.00

provided that neither the Borrower nor the Guarantors shall be required to comply with this covenant as of the last day of any Fiscal Quarter so long as (i) no Covenant Trigger Event has occurred and is continuing on the last day of such Fiscal Quarter and (ii) no Covenant Trigger Event occurs after the last day of such Fiscal Quarter and on or prior to the last day of the next succeeding Fiscal Quarter.

Section 6.14 Amendments to Orders . Directly or indirectly consent to, or file any motion or pleading in any court supporting or seeking, any amendment, supplement, modification or stay of the Confirmation Order or the District Court Order.

ARTICLE VII
EVENTS OF DEFAULT

Section 7.01 Events of Default . If any of the following events (“ Events of Default ”) shall occur:

(a) the Borrower shall fail to pay any principal of any Term Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise; or

(b) the Borrower shall fail to pay any interest on any Term Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Section 7.01 ) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three (3) Business Days after the date due; or

(c) any representation or warranty made or deemed made by or on behalf of the Borrower or any Guarantor in or in connection with this Agreement or any other Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made; or

(d) the Borrower or any Guarantor shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02 (with respect to the Borrower’s or any Guarantor’s existence), 5.05 , 5.10 or in Article VI ; or

(e) the Borrower or any Guarantor shall fail to observe or perform any covenant, condition or agreement contained in this Agreement or any other Loan Document (other than those which constitute a default under another clause of this Section ), and such failure shall continue unremedied for a period of (i) five (5) Business Days after the earlier of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of Section 5.01 and Article X of this Agreement or (ii) thirty (30) days after the earlier of such breach or notice thereof from

any Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of any other section of this Agreement or any other Loan Document; or

(f) (i) the Borrower or any Guarantor shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable or (ii) any event or condition occurs (other than a payment default which is addressed in clause (i) ) under the Revolving Loan Documents that results in the “ Obligations ” (as defined in the Revolving Loan Documents) becoming due prior to their scheduled maturity; or

(g) any event or condition (other than a payment default or a default under the Revolving Loan Documents, each of which is addressed in clause (f) above) occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; or

(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower, any Guarantor or any Significant Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower, any Guarantor or any Significant Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered; or

(i) the Borrower, any Guarantor or any Significant Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Section 7.01 , (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower, any Guarantor or any Significant Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing; or

(j) the Borrower, any Guarantor or any Significant Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due; or

(k) one or more judgments for the payment of money in an aggregate amount in excess of $10,000,000 shall be rendered against the Borrower, any Guarantor, any

Significant Subsidiary or any combination thereof (to the extent not covered by insurance as to which the relevant insurance company does not dispute coverage) and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower, any Guarantor or any Significant Subsidiary to enforce any such judgment or the Borrower, any Guarantor or any Significant Subsidiary shall fail within 30 days to discharge one or more non-monetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal or otherwise being appropriately contested in good faith by proper proceedings diligently pursued; or

(l) a Change of Control shall occur; or

(m) any material provision of any Loan Document shall, for any reason, cease to be valid and binding on the Borrower or any Guarantor, or the Borrower, any Guarantor, or any Affiliate of the Borrower or any Guarantor shall so assert in any pleading filed in any court or any material portion of any Lien (as determined by the Administrative Agent) intended to be created by the Loan Documents shall cease to be or shall not be a valid and perfected Lien having the priorities contemplated hereby or thereby; or

(n) (i) any Termination Event shall have occurred and shall continue unremedied (if applicable) for more than ten (10) days and the sum (determined as of the date of occurrence of such Termination Event) of the Insufficiency of the Plan in respect of which such Termination Event shall have occurred and be continuing and the Insufficiency of any and all other Plans with respect to which such a Termination Event shall have occurred and then exist is equal to or greater than $10,000,000, or (ii) there exists any fact or circumstance that reasonably could be expected to result in the imposition of a Lien or security interest under Section 401(a)(29) or 412(n) of the Code or under ERISA with respect to any Plan of the Borrower, any Guarantor or any ERISA Affiliate; or

(o) (i) the Borrower or any ERISA Affiliate shall have been notified by the sponsor or trustee of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan, (ii) the Borrower or such ERISA Affiliate does not have reasonable grounds, in the opinion of the Administrative Agent, to contest such Withdrawal Liability or is not in fact contesting such Withdrawal Liability in a timely and appropriate manner, and (iii) the amount of such Withdrawal Liability specified in such notice, when aggregated with all other amounts required to be paid to Multiemployer Plans in connection with Withdrawal Liabilities (determined as of the date of such notification), exceeds $10,000,000 allocable to obligations or requires payments exceeding $1,000,000 per annum in excess of the annual payments made with respect to such Multiemployer Plans by the Borrower or such ERISA Affiliate for the plan year immediately preceding the plan year in which such notification is received; or

(p) the Borrower or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, if as a result of such reorganization or termination the aggregate annual contributions of the Borrower and its ERISA Affiliates to all Multiemployer Plans that are then in reorganization or being terminated have been or will be

increased over the amounts contributed to such Multiemployer Plans for the plan years that include the date hereof by an amount exceeding $10,000,000; or

(q) a material breach by the Borrower or any ERISA Affiliate of the Settlement Agreement shall have occurred; or

(r) the Borrower or any Guarantor is criminally indicted or convicted under any law that may reasonably be expected to lead to a forfeiture of any property of such party having a fair market value in excess of $10,000,000; or

(s) an order of any court of competent jurisdiction is entered amending, supplementing, staying for any period, vacating or otherwise modifying the Confirmation Order, the District Court Order or the PI Trust or the Borrower or any of the Guarantors shall apply for authority to do so; provided, however, no Default shall occur under this subsection so long as (x) neither the District Court Order nor the Confirmation Order is stayed or vacated and (y) any such amendment, supplement or other modification is not adverse to the rights and interests of the Lenders under this Agreement and the other Loan Documents and could not reasonably be expected to have a Material Adverse Effect;

then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Section 7.01 ), and at any time thereafter during the continuance of such event, at the same or different times: (i) the Administrative Agent may, and at the request of the Required Lenders shall, terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower declare the Term Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Term Loans so declared to be due and payable, together with accrued and unpaid interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Section 7.01 , the Commitments shall automatically terminate and the unpaid principal of the Term Loans then outstanding, together with accrued and unpaid interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. Upon the occurrence and the continuance of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, increase the rate of interest applicable to the Term Loans and other Obligations as set forth in Section 2.08(c) and exercise any rights and remedies provided to the Administrative Agent or Collateral Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC.

ARTICLE VIII

THE AGENTS

Each of the Lenders hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf, including

execution of the other Loan Documents, and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto. Each of the Lenders hereby irrevocably appoints the Collateral Agent as its agent and authorizes the Collateral Agent to take such actions on its behalf, including execution of the other Loan Documents, and to exercise such powers as are delegated to the Collateral Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto. In addition, each of the Lenders and the Administrative Agent irrevocably appoints the Collateral Agent to act as “Term Loan Representative” under the Intercreditor Agreement and authorizes the Collateral Agent, acting as “Term Loan Representative”, to execute the Intercreditor Agreement and agrees to be bound by the terms thereof.

Each Person serving as an Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not an Agent, and such Person and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower and the Guarantors or any Subsidiary of the Borrower or any Guarantor or other Affiliate thereof as if it were not an Agent hereunder.

No Agent shall have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) no Agent shall be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) no Agent shall have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that such Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02 ) and (c) except as expressly set forth in the Loan Documents, no Agent shall have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any Guarantor or any of their respective Subsidiaries that is communicated to or obtained by the Person serving as an Agent or any of its Affiliates in any capacity. No Agent nor any of such Agent’s Related Parties shall be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02 ) or in the absence of its own gross negligence or willful misconduct, or, in the case of the Collateral Agent, at the request of the Administrative Agent. No Agent nor any Related Party of such Agent shall be deemed to have knowledge of any Default unless and until written notice thereof is given to such Agent or Related Party of such Agent by the Borrower or a Lender, and no Agent nor any Related Party of such Agent shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the creation, perfection or priority of Liens on the Collateral or the existence of the Collateral (including, without limitation, the filing of any UCC financing statement or continuation statement) or (vi) the satisfaction of

any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to such Agent.

The Collateral Agent is authorized on behalf of all the Lenders, without the necessity of any notice to or further consent from the Lenders, from time to time to take any action with respect to any Collateral or the Loan Documents that may be necessary to perfect and maintain a perfected security interest in and Liens upon the Collateral granted pursuant to the Loan Documents. Except for the safe custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder or under any of the other Loan Documents, the Collateral Agent shall have no duty as to any Collateral to ascertain or take action with respect to calls, conversions exchanges, maturities, trades or other matters relative to any Collateral, whether or not the Collateral Agent is deemed to have knowledge of such matters, or to take any necessary steps to preserve rights against any parties or any other rights pertaining to any Collateral (including the filing of UCC continuation statements). The Collateral Agent shall be deemed to have exercised appropriate and due care in the custody and preservation of any Collateral in its possession if such Collateral is accorded treatment substantially equal to that which other collateral agents accord similar property.

Each Agent and the Related Parties of such Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. Each Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. Each Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. Without limiting the foregoing, each Agent shall have the right at any time to seek instructions concerning the administration of this Agreement and the other Loan Documents, from the Required Lenders, a court of competent jurisdiction or, in the case of the Collateral Agent, the Administrative Agent. No Agent nor the Related Parties of such Agent shall incur any liability for failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such instruction from the Required Lenders (or, in the case of the Collateral Agent, instruction from the Administrative Agent) as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action.

Each Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by such Agent. Each Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of such Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as an Agent.

Subject to the appointment and acceptance of a successor Agent as provided in this paragraph, an Agent may resign at any time by notifying the Lenders and the Borrower.

Upon any such resignation, the Required Lenders shall have the right, with the consent of the Borrower, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Agent gives notice of its resignation, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent which shall be a commercial bank or an Affiliate of any such commercial bank, with the consent of the Borrower, such consent not to be unreasonably withheld or delayed; provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing. Upon the acceptance of its appointment as an Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After such Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Agent.

Each Lender acknowledges that it has, independently and without reliance upon any Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon any Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or related agreement or any document furnished hereunder or thereunder.

Each Lender hereby agrees that (a) it has requested a copy of each Report prepared by or on behalf of any Agent; (b) no Agent (i) makes any representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report, and (ii) shall be liable for any information contained in any Report; (c) the Reports are not comprehensive audits or examinations, and that any Person performing any field examination will inspect only specific information regarding the Borrower and the Guarantors and will rely significantly upon the Borrower’s and the Guarantors’ books and records, as well as on representations of the Borrower’s and the Guarantors’ personnel and that no Agent undertakes obligation to update, correct or supplement the Reports; (d) it will keep all Reports confidential and strictly for its internal use, not share the Report with the Borrower or any Guarantor or any other Person except as otherwise permitted pursuant to this Agreement; and (e) without limiting the generality of any other indemnification provision contained in this Agreement, it will pay and protect, and indemnify, defend, and hold each Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorney fees) incurred as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

The Borrower, each Guarantor and the Administrative Agent will furnish such information reasonably known to it (and subject to applicable confidentiality restrictions) about the Collateral and any other information the Collateral Agent deems necessary to exercise any of

the rights and powers vested in it by the Loan Documents as the Collateral Agent may reasonably request from time to time.

The Lenders hereby empower, authorize and direct each of the Administrative Agent and the Collateral Agent, on behalf of the Lenders, to execute and deliver this Agreement, the other Loan Documents, the Intercreditor Agreement and all related agreements, certificates, documents, or instruments as shall be necessary or appropriate to effect the purposes of the Loan Documents. Each Lender agrees that any action taken by the Administrative Agent or the Collateral Agent or the Required Lenders in accordance with the terms of this Agreement, the Intercreditor Agreement or the other Loan Documents, and the exercise by the Administrative Agent or the Collateral Agent or the Required Lenders of their respective powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Lenders.

ARTICLE IX

MISCELLANEOUS

Section 9.01 Notices . (a) Except in the case of notices and other communications expressly permitted to be given by telephone or by other electronic communication (and subject to Section 9.01(b) ), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:

(i) if to the Borrower or any Guarantor, c/o Parent at:

Kaiser Aluminum Corporation
27422 Portola Parkway, Suite 350
Foothill Ranch, CA 92610-2831
Attention: Office of the Chief Financial Officer
Facsimile No: (949) 636-1930

with a copy to:

Jones Day
77 West Wacker
Chicago, IL 60601-1692
Attention: Robert J. Graves
Facsimile No.: (312) 782-8585

(ii) if to the Administrative Agent, to JPMorgan Chase at:

JPMorgan Chase Bank, N.A.
2200 Ross Avenue, 6th Floor

Mail Code: TX1-2921
Dallas, TX 75201
Attention: Portfolio Manager
Facsimile No: (214) 965-2594

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP
333 West Wacker Drive
Chicago, IL 60606
Attention: Seth Jacobson
Facsimile No: (312) 407-0411

(iii) if to the Collateral Agent, to Wilmington Trust Company at:

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Administrator
Facsimile No: (302) 636-4140

(iv) if to any other Lender, to it at its address or facsimile number set forth in its Administrative Questionnaire.

(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications (including e-mail and internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II or to compliance and no Event of Default certificates delivered pursuant to Section 5.01 unless expressly provided for therein or otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent and the Borrower (on behalf of the Borrower and each Guarantor) may, in their discretion, agree to accept notices and other communications hereunder by electronic communications pursuant to procedures approved by them; provided that approval of such procedures may be limited to particular notices or communications. All such notices and other communications (i) sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii)

posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause of this Section 9.01(b) of notification that such notice or communication is available and identifying the website address therefor.

(c) Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.

Section 9.02 Waivers; Amendments . (a) No failure or delay by any Agent or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Agents and the Lenders hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by the Borrower or any Guarantor therefrom shall in any event be effective unless the same shall be permitted by Section 9.02(b) , and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Term Loan shall not be construed as a waiver of any Default, regardless of whether any Agent or any Lender may have had notice or knowledge of such Default at the time.

(b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and each Guarantor and the Required Lenders or, (ii) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the applicable Agent and the Borrower and/or Guarantor(s) that are parties thereto, with the consent of the Required Lenders; provided , however , that no such waiver, modification or amendment shall, without the written consent of (1) 100% of Lenders, (A) except as provided in Section 9.02(d) , release all or substantially all of the Collateral, (B) change Section 2.13(b) or (c) in a manner that would alter the manner in which payments are shared, (C) modify any of the voting percentages, (D) release the Borrower or any Guarantor as a party to, or from all of its obligations under, this Agreement (except as permitted under Section 6.02 ), or (E) amend this Section 9.02(b) to change the percentage of Lenders required to approve any waiver, amendment or modification, and (2) the Lender directly affected thereby, (A) increase the Commitment of a Lender (it being understood that a waiver of an Event of Default shall not constitute an increase in the Commitment of a Lender) or extend the expiry date of such Lender’s Commitment, or (B) reduce or forgive the principal amount of any Term Loan or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, or postpone any scheduled date of payment of the principal amount of any Term Loan, or any date for the payment of any interest, fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of an Agent hereunder without the prior written consent of such Agent.

(c) The Administrative Agent may (i) amend the Commitment Schedule to reflect assignments entered into pursuant to Section 9.04 , and (ii) waive payment of the fee required under Section 9.04(b)(ii)(C) without obtaining the consent of any other party to this Agreement.

(d) The Lenders hereby irrevocably authorize the Collateral Agent, at its option and in its sole discretion, to release any Liens granted to the Collateral Agent by the Borrower or any Guarantor on any Collateral (i) upon the termination of the Commitment, payment and satisfaction in full in cash of all Obligations (other than Unliquidated Obligations), and the cash collateralization of all Unliquidated Obligations in a manner satisfactory to each affected Lender, (ii) constituting property being sold, assigned, transferred or otherwise disposed of if the Borrower or Guarantor disposing of such property certifies to the Collateral Agent that such sale, assignment, transfer or disposition is made in compliance with the terms of this Agreement (and the Collateral Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting property leased to the Borrower or a Guarantor under a lease which has expired or been terminated in a transaction permitted under this Agreement with respect to which the Collateral Agent has received a certification from the Borrower (and the Collateral Agent may rely conclusively on such certification without further inquiry) or (iv) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Collateral Agent or the Lenders pursuant to Section 7.01 . Except as provided in the preceding sentence, the Collateral Agent will not release any Liens on Collateral without the prior written authorization of the Required Lenders; provided that the Administrative Agent may, in its discretion, instruct the Collateral Agent to release its Liens on Collateral valued in the aggregate not in excess of $2,000,000 during any calendar year without the prior written authorization of the Required Lenders, and the Collateral Agent shall comply with such an instruction upon receipt. Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Borrower and Guarantors in respect of) all interests retained by the Borrower and Guarantors, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral.

(e) If, in connection with any proposed amendment, waiver or consent requiring the consent of “100% of Lenders” or “the Lender directly affected thereby,” the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but not obtained being referred to herein as a “ Non-Consenting Lender ”), then, so long as the Administrative Agent is not a Non-Consenting Lender, the Borrower may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided that , concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrower and the Administrative Agent shall agree, as of such date, to purchase for cash the Term Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and Assumption and, to the extent any such assignee is not already a Lender, to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of Section 9.04(b) , and (ii) the Borrower shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (1) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrower hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 2.10 and 2.12 , and (2) an amount, if any, equal to

the payment which would have been due to such Lender on the day of such replacement under Section 2.11 had the Term Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender.

Section 9.03 Expenses; Indemnity; Damage Waiver . (a) The Borrower shall pay (i) all reasonable out of pocket expenses incurred by each Agent and its Affiliates and sub-agents, including the reasonable fees, charges and disbursements of counsel for each Agent, in connection with the syndication and distribution (including, without limitation, via the internet or through a service such as Intralinks) of the credit facilities provided for herein, the preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by any Agent or any Lender, including the fees, charges and disbursements of any counsel for any Agent or any Lender, in connection with the enforcement, collection or protection of its rights in connection with the Loan Documents, including its rights under this Section 9.03 , or in connection with the Term Loans made hereunder, including all such out-of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Term Loans. Expenses being reimbursed by the Borrower under this Section 9.03 include, without limiting the generality of the foregoing, costs and expenses incurred in connection with:

(i) appraisals of all or any portion of the Collateral (including reasonable travel, lodging, meals and other out of pocket expenses of the appraisers);

(ii) lien and title searches and title insurance;

(iii) taxes, fees and other charges, if any, for recording the Mortgages, filing financing statements and continuations, and other actions to perfect, protect, and continue the Collateral Agent’s Liens; and

(iv) sums paid or incurred to take any action required of the Borrower or any Guarantor under the Loan Documents that the Borrower or such Guarantor fails to pay or take.

(b) The Borrower shall indemnify each Agent, each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, penalties, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Term Loan or the use of proceeds thereof, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by Parent or any of its Subsidiaries, or any Environmental Liability related in any way to Parent or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory

and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, penalties, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

(c) To the extent that the Borrower fails to pay any amount required to be paid by the Borrower to any Agent or Related Party under Section 9.03(a) or (b) , each Lender severally agrees to pay to such Agent or Related Party such Lender’s Commitment Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, penalty, liability or related expense, as the case may be, was incurred by or asserted against such Agent or Related Party in its capacity as such.

(d) To the extent permitted by applicable law, neither the Borrower nor any Guarantor shall assert, and the Borrower and each Guarantor hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Term Loan or the use of the proceeds thereof.

(e) All amounts due under this Section 9.03 shall be payable promptly after written demand therefor.

Section 9.04 Successors and Assigns . (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby except that (i) neither the Borrower nor any Guarantor may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower or any Guarantor without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section 9.04 (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (to the extent provided in Section 9.04(c) ) and, to the extent expressly contemplated hereby, the Related Parties of each of the Agents and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in Section 9.04(b)(ii) , any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Term Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

(A) the Administrative Agent;

(B) the Borrower; provided that no consent of the Borrower shall be required for an Assignment to a

Lender, an Affiliate of a Lender, an Approved Fund, or if an Event of Default has occurred, any other assignee.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment and Term Loans at the time owing to it, the amount of the Commitment or Term Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Agent) shall not be less than $5,000,000 unless each of the Administrative Agent and the Borrower otherwise consents, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;

(C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and

(D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(iii) Subject to acceptance and recording thereof pursuant to Section 9.04 (b)(iv) , from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.10 , 2.11 , 2.12 and 9.03 ). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 9.04(c) .

(iv) The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in the United States of America a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of and accrued interest on the Term Loans, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive, and the Borrower, the Agents, and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in Section 9.04(b) and any written consent to such assignment required by Section 9.04(b) , the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.13(c) or 9.03(c) , the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

For the purposes of this Section 9.04(b) , the term “ Approved Fund ” has the following meaning: “Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

(c) (i) Any Lender may, without the consent of the Borrower or the Administrative Agent sell participations to one or more banks or other entities (a “ Participant ”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Term Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Agents, and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve any amendment, modification or waiver of any provision of any Loan Document; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to

Section 9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this Section , the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.10 , 2.11 and 2.12 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section . To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.13(c) as though it were a Lender.

(ii) A Participant shall not be entitled to receive any greater payment under Section 2.10 or 2.12 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the prior written consent of the Borrower. A Participant that would be a Foreign Lender or other Lender that would be required to furnish documentation pursuant to Section 2.12(e) if it were a Lender shall not be entitled to the benefits of Section 2.12 unless the Borrower is notified of the participation sold to such Participant and such Participant complies with Section 2.12(e) as though it were a Lender. In addition, by acquiring its participation, any Participant shall be deemed to have agreed to comply with Section 2.12(f) as if it were a Lender.

(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

Section 9.05 Survival . All covenants, agreements, representations and warranties made by the Borrower, any Guarantor or any of their Subsidiaries party thereto in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Term Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that any Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Term Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated. The provisions of Sections 2.10 , 2.11 , 2.12 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Term Loans, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.

Section 9.06 Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to

fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01 , this Agreement shall become effective when it shall have been executed by the Agents and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Agreement.

Section 9.07 Severability . Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

Section 9.08 Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender, each Agent and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Person to or for the credit or the account of the Borrower or any Guarantor against any of and all the Obligations held by such Lender, irrespective of whether or not such Person shall have made any demand under the Loan Documents and although such obligations may be unmatured. The applicable Lender or Agent shall notify the Borrower and the Administrative Agent of such set-off or application, provided that any failure to give or delay in giving such notice shall not effect the validity of any such set-off or application under this Section 9.08 . The rights of each Lender and Agent under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have. NOTWITHSTANDING THE FOREGOING, AT ANY TIME THAT ANY OF THE OBLIGATIONS SHALL BE SECURED BY REAL PROPERTY LOCATED IN CALIFORNIA, NO LENDER SHALL EXERCISE A RIGHT OF SETOFF, LENDER’S LIEN OR COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION OR INSTITUTE ANY PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT UNLESS IT IS TAKEN WITH THE CONSENT OF THE LENDERS REQUIRED BY SECTION 9.02 OF THIS AGREEMENT, IF SUCH SETOFF OR ACTION OR PROCEEDING WOULD OR MIGHT (PURSUANT TO SECTIONS 580a, 580b, 580d AND 726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE OR SECTION 2924 OF THE CALIFORNIA CIVIL CODE, IF APPLICABLE, OR OTHERWISE) AFFECT OR IMPAIR THE VALIDITY, PRIORITY, OR ENFORCEABILITY OF THE LIENS GRANTED TO THE ADMINISTRATIVE AGENT PURSUANT TO THE COLLATERAL DOCUMENTS OR THE ENFORCEABILITY OF THE OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE BY ANY LENDER OR ANY SUCH RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE PARTIES AS REQUIRED ABOVE, SHALL BE NULL AND VOID. THIS PARAGRAPH SHALL BE SOLELY FOR THE BENEFIT OF EACH OF THE LENDERS.

Section 9.09 Governing Law; Jurisdiction; Consent to Service of Process . (a) The Loan Documents (other than those containing a contrary express choice of law provision) shall be governed by and construed in accordance with the laws of the State of New York, but giving effect to federal laws applicable to national banks.

(b) The Borrower and each Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any U.S. Federal or New York State court sitting New York, New York in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto 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. Nothing in this Agreement or any other Loan Document shall affect any right that any Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or any Guarantor or its properties in the courts of any jurisdiction.

(c) The Borrower and each Guarantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section . Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

Section 9.10 WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY (INCLUDING, WITHOUT LIMITATION, THE ADMINISTRATIVE AGENT) HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION .

Section 9.11 Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

Section 9.12 Confidentiality . The Agents and the Lenders each agree to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by Requirement of Law or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section , to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower or any Guarantor and any of their obligations, so long as such counterparty agrees to be bound by the provisions of this Section 9.12 , (g) with the consent of the Borrower, or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to any Agent or any Lender on a nonconfidential basis from a source other than the Borrower or any Guarantor. For the purposes of this Section , “ Information ” means all information received from the Borrower or the Guarantors relating to the Borrower, the Guarantors or their business, operations, assets, liabilities, financial condition or position, results or operations, or prospects, other than any such information that is available to the Agents or any Lender on a nonconfidential basis prior to disclosure by the Borrower or the Guarantors. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

Section 9.13 Several Obligations; Nonreliance; Violation of Law . The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to make any Term Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. Each Lender hereby represents that it is not relying on or looking to any margin stock for the repayment of the Term Loans provided for herein. Anything contained in this Agreement to the contrary notwithstanding, no Lender shall be obligated to extend credit to the Borrower in violation of any Requirement of Law.

Section 9.14 USA PATRIOT Act . Each Lender that is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Act ”) hereby notifies the Borrower and the Guarantors that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrower and the Guarantors, which information includes the name and address of the Borrower and the Guarantors and other information that will allow such Lender to identify the Borrower and the Guarantors in accordance with the Act.

Section 9.15 Disclosure . The Borrower, each Guarantor and each Lender hereby acknowledges and agrees that any Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with the Borrower or any of the Guarantors and their respective Affiliates.

Section 9.16 Appointment for Perfection . Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Collateral Agent and the Lenders, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession. Should any Lender (other than the Collateral Agent) obtain possession of any such Collateral, such Lender shall notify the Collateral Agent thereof, and, promptly upon the Collateral Agent’s request therefor shall deliver such Collateral to the Collateral Agent or otherwise deal with such Collateral in accordance with the Collateral Agent’s instructions.

Section 9.17 Interest Rate Limitation . Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Term Loan, together with all fees, charges and other amounts which are treated as interest on such Term Loan under applicable law (collectively the “ Charges ”), shall exceed the maximum lawful rate (the “ Maximum Rate ”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Term Loan in accordance with applicable law, the rate of interest payable in respect of such Term Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Term Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

ARTICLE X

LOAN GUARANTY

Section 10.01 Guaranty . Each Guarantor hereby agrees that it is jointly and severally liable for, and, as primary obligor and not merely as surety, absolutely and unconditionally guarantees to the Lenders and Agents the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Obligations and all costs and expenses including, without limitation, all court costs and reasonable attorneys’ and paralegals’ fees and expenses paid or incurred by any Agent and any Lender in endeavoring to collect all or any part of the Obligations from, or in prosecuting any action against, the Borrower, any Guarantor or any other guarantor of all or any part of the Obligations (such costs and expenses, together with the Obligations, collectively the “ Guaranteed Obligations ”). Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. All terms of this Guaranty apply to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any portion of the Guaranteed Obligations.

Section 10.02 Guaranty of Payment . This Guaranty is a guaranty of payment and not of collection. Each Guarantor waives any right to require any Agent or any Lender to sue the Borrower, any Guarantor, any other guarantor, or any other person obligated for all or any part of the Guaranteed Obligations (each, an “ Obligated Party ”), or otherwise to enforce its payment against any Collateral securing all or any part of the Guaranteed Obligations.

Section 10.03 No Discharge or Diminishment of Guaranty . (a) Except as otherwise provided for herein, the obligations of each Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Guaranteed Obligations), including: (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of the Borrower, any Guarantor or any other guarantor of or other person liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party, or their assets or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or other rights which any Guarantor may have at any time against any Obligated Party, any Agent, any Lender, or any other person, whether in connection herewith or in any unrelated transactions.

(b) The obligations of each Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any part thereof.

(c) Further, the obligations of any Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of any Agent or any Lender to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection, or invalidity of any indirect or direct security for the obligations of the Borrower for all or any part of the Guaranteed Obligations or any obligations of any other guarantor of or other person liable for any of the Guaranteed Obligations; (iv) any action or failure to act by any Agent or any Lender with respect to any Collateral securing any part of the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Guarantor or that would otherwise operate as a discharge of any Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of the Guaranteed Obligations).

Section 10.04 Defenses Waived . To the fullest extent permitted by applicable law, each Guarantor hereby waives any defense based on or arising out of any defense of the Borrower or any Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or the cessation from any cause of the liability of the Borrower or any Guarantor, other than the indefeasible payment in full in cash of the Guaranteed Obligations. Without limiting the generality of the foregoing, each Guarantor irrevocably waives acceptance

hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any person against any Obligated Party, or any other Person. The Collateral Agent may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any Collateral securing all or a part of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without affecting or impairing in any way the liability of such Guarantor under this Guaranty except to the extent the Guaranteed Obligations have been fully and indefeasibly paid in cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Guarantor against any Obligated Party or any security.

Section 10.05 Rights of Subrogation . No Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification that it has against any Obligated Party, or any Collateral, until the Borrower and the Guarantors have fully performed all their obligations to the Agents and the Lenders.

Section 10.06 Reinstatement; Stay of Acceleration . If at any time any payment of any portion of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, each Guarantor’s obligations under this Guaranty with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not the Agents and the Lenders are in possession of this Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Guarantors forthwith on demand by the Lenders.

Section 10.07 Information . Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Guarantor assumes and incurs under this Guaranty, and agrees that none of the Administrative Agent, the Collateral Agent or any Lender shall have any duty to advise any Guarantor of information known to it regarding those circumstances or risks.

Section 10.08 Termination . The Lenders may continue to make loans or extend credit to the Borrower based on this Guaranty until five days after it receives written notice of termination from any Guarantor. Notwithstanding receipt of any such notice, each Guarantor will continue to be liable to the Lenders for any Guaranteed Obligations created, assumed or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals, extensions, modifications and amendments with respect to, or substitutions for, all or any part of that Guaranteed Obligations.

Section 10.09 Maximum Liability . The provisions of this Guaranty are severable, and in any action or proceeding involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor under this Guaranty would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of such Guarantor’s liability under this Guaranty, then, notwithstanding any other provision of this Guaranty to the contrary, the amount of such liability shall, without any further action by the Guarantors or the Lenders, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined hereunder being the relevant Guarantor’s “ Maximum Liability ”). This Section with respect to the Maximum Liability of each Guarantor is intended solely to preserve the rights of the Lenders to the maximum extent not subject to avoidance under applicable law, and no Guarantor nor any other person or entity shall have any right or claim under this Section with respect to such Maximum Liability, except to the extent necessary so that the obligations of any Guarantor hereunder shall not be rendered voidable under applicable law. Each Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the Maximum Liability of each Guarantor without impairing this Guaranty or affecting the rights and remedies of the Lenders hereunder, provided that , nothing in this sentence shall be construed to increase any Guarantor’s obligations hereunder beyond its Maximum Liability.

Section 10.10 Contribution . In the event any Guarantor (a “ Paying Guarantor ”) shall make any payment or payments under this Guaranty or shall suffer any loss as a result of any realization upon any collateral granted by it to secure its obligations under this Guaranty, each other Guarantor (each a “ Non-Paying Guarantor ”) shall contribute to such Paying Guarantor an amount equal to such Non-Paying Guarantor’s “Applicable Percentage” of such payment or payments made, or losses suffered, by such Paying Guarantor. For purposes of this Article X , each Non-Paying Guarantor’s “ Applicable Percentage ” with respect to any such payment or loss by a Paying Guarantor shall be determined as of the date on which such payment or loss was made by reference to the ratio of (i) such Non-Paying Guarantor’s Maximum Liability as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has not been determined, the aggregate amount of all monies received by such Non-Paying Guarantor from the Borrower after the date hereof (whether by loan, capital infusion or by other means) to (ii) the aggregate Maximum Liability of all Guarantors hereunder (including such Paying Guarantor) as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder), or to the extent that a Maximum Liability has not been determined for any Guarantor, the aggregate amount of all monies received by such Guarantors from the Borrower after the date hereof (whether by loan, capital infusion or by other means). Nothing in this provision shall affect any Guarantor’s several liability for the entire amount of the Guaranteed Obligations (up to such Guarantor’s Maximum Liability). Each of the Guarantors covenants and agrees that its right to receive any contribution under this Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of payment to the payment in full in cash of the Guaranteed Obligations. This provision is for the benefit of the Agents, the Lenders and the Guarantors and may be enforced by any one, or more, or all of them in accordance with the terms hereof.

Section 10.11 Liability Cumulative . The liability of each Guarantor as a Guarantor under this Article X is in addition to and shall be cumulative with all liabilities of each Guarantor to the Agents and the Lenders under this Agreement and the other Loan Documents to such Guarantor is a party or in respect of any obligations or liabilities of the Borrower and the other Guarantors, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed as of the day and the year first written.


		BORROWER:

		KAISER ALUMINUM FABRICATED PRODUCTS, LLC

		By:		/s/ Daniel J. Rinkenberger
				Name: Daniel J. Rinkenberger
				Title: Vice President and Treasurer

		GUARANTORS:

		KAISER ALUMINUM CORPORATION

		By:		/s/ Daniel J. Rinkenberger
				Name: Daniel J. Rinkenberger
				Title: Vice President and Treasurer

		KAISER ALUMINUM INVESTMENTS COMPANY

		By:		/s/ Daniel J. Rinkenberger
				Name: Daniel J. Rinkenberger
				Title: Vice President and Treasurer

		KAISER ALUMINIUM INTERNATIONAL, INC.

		By:		/s/ Daniel J. Rinkenberger
				Name: Daniel J. Rinkenberger
				Title: Vice President and Treasurer


		JPMORGAN CHASE BANK, N.A., as
		Administrative Agent

		By:		/s/ J. Devin Mock
				Name: J. Devin Mock
				Title: Vice President


		WILMINGTON TRUST COMPANY, as
		Collateral Agent

		By:		/s/ James A. Hanby
				Name: James A. Hanby
				Title: Senior Financial Services Officer


		LENDER:

		J.P. MORGAN SECURITIES INC.

		By:		/s/ Matt J. Downs

		Name:		Matt J. Downs

		Title:		Vice President

ANNEX A

COMMITMENT SCHEDULE


Lender	Commitment
J.P. Morgan Securities Inc.	$	50,000,000
Total	$	50,000,000

Exhibit 10.3

COMPENSATION OF DIRECTORS

Effective as of July 6, 2006

Each non-employee director of Kaiser Aluminum Corporation (the “Company”) shall receive:

	•		an annual retainer of $30,000 per year;

	•		an annual grant of restricted stock having a value equal to $30,000;

	•		a fee of $1,500 per day for each meeting of the Board of Directors (the “Board”) attended in person and $750 per day for each such meeting attended by phone; and

	•		a fee of $1,500 per day for each Board committee meeting attended in person on a date other than a date on which a meeting of the Board is held and $750 per day for each such meeting attended by phone.

In addition, the Lead Independent Director shall receive an additional annual retainer of $10,000, Chairman of the Audit Committee of the Board shall receive an additional annual retainer of $10,000, the Chairman of the Compensation Committee of the Board shall receive an additional annual retainer of $5,000 and the Chairman of the Nominating and Corporate Governance Committee of the Board shall receive an additional annual retainer of $5,000, with all such amounts payable at the same time as the annual retainer.

Each non-employee director may elect to receive shares of common stock, par value $0.01 per share, of the Company (“Common Stock”) in lieu of any or all of his or her annual retainer, including any additional annual retainer for service as the Lead Independent Director or the Chairman of a committee.

The Company shall reimburse all directors for travel and other disbursements relating to meetings of the Board and committees thereof, and non-employee directors shall be provided accident insurance with respect to Company-related business travel.

Exhibit 10.4

Summary of the
Kaiser Aluminum
2006 Short Term Incentive Plan
For Key Managers

This is a summary of the Kaiser Aluminum short term incentive program (STIP) effective January 1, 2006. The STIP performance period is annual. The 2006 program rewards participants for Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) from the Fabricated Products business unit. The 2006 STIP is intended to serve as a bridge to future programs following the transition from Chapter 11 to emergence. The metrics for the 2006 STIP are derived from the design criteria employed in the Fabricated Products business unit from 2000 through 2005.

Purpose of the 2006 Kaiser Aluminum STIP

1.		Focus attention on earnings (as measured by EBITDA) within Fabricated Products, Kaiser’s core business segment.

2.		Reward the achievement of aggressive performance goals.

3.		Align the focus on earnings with achievement of other business objectives.

4.		Provide incentive opportunities that are consistent with competitive market.

5.		Link incentive pay to individual performance as well as the Company’s success and ability to pay.

STIP Philosophy

Compensation should be related as closely as possible to the success and safe operations of our business. In order to achieve success, participants must continue to seek out and find ways to not only enhance earnings but also to move the Company to a higher level of ongoing achievement.

The monetary incentive awards from the 2006 STIP will be based on EBITDA with modifiers for achievement of plant, individual, and safety performance objectives.

Primary Performance Measures

•

The financial performance measure to determine incentive awards is Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) from the Fabricated Products business unit. Fabricated Products safety performance as measured by Total Case Incident Rate (TCIR) will be utilized as a performance modifier.

•

EBITDA for incentive compensation will be as reported in the 10-K. However, the EBITDA may be adjusted for certain re-structuring costs, gains related to divestitures or shutdown of locations, or other extraordinary items. These adjustments may spread certain extraordinary items over a period of years based upon the recommendation of the CEO and the approval of the Compensation Committee of the Board of Directors.

Individual Performance Criteria — Kaiser Aluminum STIP

•		Individual payouts from the 2006 STIP may be adjusted based upon performance against individual objectives and/or business segment earnings.

•		The Business Unit modifier allows for a plus or minus 50% of target or award based on the performance of the specific business segment that applies to individuals.

•		There are up to four categories based on individual objectives or targets set in the first quarter of each year. Each category allows for an individual modifier of plus or minus 25% of target or award.

Target Incentive

•

A monetary target incentive amount for each participant is established for the STIP based on competitive market, internal compensation balance and position responsibilities.

•

Participants’ monetary incentive targets are set at the beginning of each annual STIP performance period.

•

The participant’s monetary incentive target amount represents the incentive opportunity when certain financial, safety, operational and individual performance goals are met.

How Incentive Awards Are Determined

•

At the end of the year “EBITDA” is determined from Fabricated Products operating income plus depreciation and amortization as reported in the 10-K and as adjusted by re-structuring amounts and other special adjustments (if any).

•

The “EBITDA” achievement is then use to determine the Award Multiple.

•

The Award Multiple may be adjusted within a range of plus or minus 10% based upon Fabricated Products TCIR.

•

The maximum Award Multiple is 3.0 times the sum of the individual monetary incentive target.

•

A pool is established based upon the Award Multiple multiplied by the sum of individual monetary incentive targets for the STIP participants. The entire pool is paid to participants.

STIP Award

•

Each participant’s base award is determined as the vested monetary incentive target times Award Multiple.

- 2 -

•

Based on the Fabricated Products EBITDA and TCIR performance as well as business unit and individual performance, the monetary award can be modified in aggregate up to plus or minus 100% of incentive target or base award.

	o		If the award multiple is 1.0 or greater, then the earnings and individual / safety performance modifier will be a percentage of the calculated award.

	o		If the award multiple is less than 1.0, then the earnings and individual / safety performance modifier will be a percentage of incentive target.

Form and Timing of Payment

•

Annual monetary incentive awards from the STIP are paid in cash no later than March 31 following the end of the year.

Other Administrative Provisions

•

Annual monetary incentive awards paid from the STIP count as additional compensation for purposes of the Company’s Defined Contribution and Restoration Plans but not for other Company benefits. All applicable federal, state, local and FICA taxes will be withheld from all incentive award payments.

•

Retirement or termination: If participant dies or retires under “normal” (age 62), full early retirement (position elimination), or is involuntarily terminated due to position elimination, or becomes disabled, on a date other than December 31 of any year, a pro-rata incentive award is earned based on actual eligibility during the performance period. Leave of absence participants earn a prorated award based on the number of months of active employment . Incentive awards are forfeited for all voluntary terminations prior to the end of the performance period (December 31).

•

Beneficiary designation: In the event of your death your designated beneficiary will receive any payments due under the STIP. If there is no designated beneficiary on file with Human Resources, any amounts due will be paid to your surviving spouse or, if no surviving spouse, to your estate. Contact Division Human Resources to designate or change your beneficiary.

•

Non transferability: No amounts earned under the STIP may be sold, transferred, pledged or assigned, other than by will or the laws of descent and distribution until the termination of the applicable performance period. All rights to benefits under the STIP are exercisable only by you or, in the case of your death, by your beneficiary.

•

The STIP may be modified, amended or terminated by the Compensation Committee at any time. If the plan is terminated, modified or amended, then future payments from the STIP are governed by such modifications or amendments. If terminated, then a prorated award will be determined based on number of months up to termination, and paid before April 30 following the end of the year.

- 3 -

•

The STIP constitutes no right to continued employment. The Chairman and CEO, with oversight from the Compensation Committee of the Board of Directors, has the discretionary authority to interpret the terms of the plan and his decisions shall be final, binding and conclusive on all persons affected.

- 4 -

Exhibit 10.5

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this “Agreement”) dated as of July 6, 2006, between KAISER ALUMINUM CORPORATION, a Delaware corporation (the “Company”), and JACK A. HOCKEMA (the “Executive”).

The Company wishes to continue to employ the Executive, and the Executive wishes to continue his employment with the Company, on the terms and conditions set forth in this Agreement.

Accordingly, the Company and the Executive hereby agree as follows:

Employment; Duties and Acceptance .

1.1. Employment Duties . The Company hereby agrees to employ the Executive for the Term (as defined in Section 2.1), to render exclusive and full-time services to the Company , in the capacity of president and chief executive officer of the Company and to perform such other duties consistent with such position (including service as a director or officer of any affiliate of the Company if elected) as may be assigned by the Board of Directors of the Company (the “Board”); provided, however, that the Executive may serve on the Board of Directors of one other business at any time during the Term that does not compete with the Company and may participate in civic, charitable and industry organizations to the extent that such participation does not materially interfere with the performance of his duties hereunder. The Executive’s title shall be President and Chief Executive Officer, or such other titles of at least equivalent level consistent with the Executive’s duties from time to time as may be assigned to the Executive by the Board, and the Executive shall have all authorities as are customarily and ordinarily exercised by executives in similar positions in similar businesses in the United States. The Executive shall report solely to the Board. The Company agrees to use its best efforts to cause the Executive to be elected to the Board and to have the Executive serve as a member of the Board throughout his service during the Term.

1.2. Acceptance . The Executive hereby accepts such employment and agrees to render the services described above. During the Term, and consistent with the above, the Executive agrees to serve the Company faithfully and to the best of the Executive’s ability, to devote the Executive’s entire business time, energy and skill to such employment, and to use the Executive’s best efforts, skill and ability to promote the Company’s interests.

1.3. Location . The duties to be performed by the Executive hereunder shall be performed primarily at the Company’s offices in Foothill Ranch, California or such other location as mutually agreed by the parties, subject to reasonable travel requirements consistent with the nature of the Executive’s duties from time to time on behalf of the Company. The Executive shall not be required to change his principal residence in the event the Company relocates its offices.

Term of Employment .

2.1. Term . The term of the Executive’s employment under this Agreement (the “Term”) shall commence on the effective date of the Company’s Plan of Reorganization in the

pending bankruptcy cases (the “Effective Date”), and shall continue until the earlier of (i) the fifth anniversary of the Effective Date and (ii) such earlier date on which the Term is terminated pursuant to Section 4. The Term shall automatically be renewed and extended for successive periods of one (1) year unless either party hereto shall have notified the other party hereto in writing that such extension shall not take effect at least one (1) year prior to the end of the initial Term or of any extension.

Compensation; Benefits .

3.1. Salary . As compensation for the services to be rendered pursuant to this Agreement, the Company agrees to pay to the Executive during the Term a base salary, payable monthly in arrears, at the initial annual rate of $730,000 (the “Base Salary”). On each anniversary of the Effective Date or such other appropriate date as may be agreed by the parties during the Term, the Company shall review the Base Salary and determine if, and by how much, the Base Salary should be increased. Once the Base Salary has been increased hereunder, it shall not be decreased without the Executive’s consent. All payments of Base Salary or other compensation hereunder shall be less such deductions or withholdings as are required by applicable law and regulations.

3.2. Bonus . In addition to the amounts to be paid to the Executive pursuant to Section 3.1, if the Company achieves 100% or more of the Company’s target objectives for a fiscal year of the Company, such target objectives which are recommended by the Executive and approved by the Compensation Committee of the Board (the “Compensation Committee”) not later than March 31 of such year, the Executive shall receive an annual bonus (an “Annual Bonus”) equal to the product of (i) the Executive’s Base Salary at the rate in effect at the end of such fiscal year and (ii) 68.5%. Should the Company achieve such target objectives in a fiscal year which are significantly beyond expectations for the Company’s performance for such year, the 68.5% multiplier set forth in clause (ii) of the preceding sentence shall be increased up to a maximum of 300% of the target bonus opportunity (or 205.5% of Base Salary). A formula will be established to provide for recognition of threshold objectives below such target objectives and for pro rata awards between the threshold award opportunity and the maximum award opportunity. Any Annual Bonus earned hereunder shall be payable not later than the 15 ^th day of the third month following the end of the fiscal year to which it relates.

In the event that the Executive’s employment shall terminate other than on a date which is the last day of a fiscal year of the Company, the Executive’s target Annual Bonus with respect to the fiscal year in which employment terminates shall be prorated for the actual number of days of the Executive’s employment under this Agreement during the fiscal year in which occurs the Executive’s termination of employment, and such Annual Bonus shall be payable to the Executive within ten (10) business days following such termination of employment. Notwithstanding the foregoing, the Executive shall be entitled to no Annual Bonus in respect of or the fiscal year of the Company in which his Employment terminates if such termination is pursuant to Section 4.4.

3.3. Emergence Grant. As of the Effective Date, the Executive is awarded a one-time grant of 185,000 shares of restricted stock, subject to a three-year cliff vesting schedule and other customary restrictions that shall lapse on the third anniversary of the date of such award or

earlier upon a Change of Control or the Executive’s retirement, death, Disability, termination of employment under this Agreement other than for Cause or termination by the Executive for Good Reason. For purposes of this Section 3.3, the term “retirement” means the Executive’s termination of employment for any reason at or after the earlier of (i) age 65, or (ii) the end of the initial Term of this Agreement.

3.4. Incentive Compensation . For fiscal year 2007 and each fiscal year thereafter, the Executive will be eligible to receive grants of long-term incentive compensation, including, but not limited to equity awards (such as restricted stock, stock options and performance shares) having a target economic value of 165% of the Base Salary for the fiscal year, on similar terms as grants made to senior executives; provided, however, that the grants shall provide for full vesting at retirement (as defined in Section 3.3) and shall further provide that in the event of a termination of the Executive’s employment, other than pursuant to Section 4.4 or a non-renewal of the Term of this Agreement, the Executive’s vested interest in each outstanding grant shall be not less favorable than had such grant provided for vesting in proportion to the actual number of days of the Executive’s employment during the applicable vesting period over the total number of days in such vesting period.

3.5. Business Expenses . The Company shall pay or reimburse the Executive for all reasonable expenses actually incurred or paid by the Executive during the Term in the performance of Executive’s services under this Agreement, subject to and in accordance with applicable expense reimbursement and related policies and procedures as in effect from time to time.

3.6. Vacation . During each year of the Term, the Executive shall be entitled to a paid vacation period or periods of four (4) weeks taken in accordance with applicable vacation policy as in effect from time to time.

3.7. Benefits; Perquisites . During the Term, the Executive shall be entitled to participate in those retirement plans, deferred compensation plans, group insurance, life, medical, dental, disability and other benefit plans of the Company at the same level as those benefits are provided by the Company from time to time to senior executives of the Company generally. Also, during the Term, the Executive shall be entitled to fringe benefits and perquisites at the same level as those benefits are provided by the Company from time to time to senior executives of the Company generally. However, nothing herein shall require the Company to establish and/or maintain any such plans.

3.8. Legal Expenses . The Company agrees to pay the legal fees and expenses incurred by the Executive in connection with the negotiation and consummation of this Agreement.

3.9. Termination of Severance Agreements . Prior to the Effective Date, Executive is a participant in the Company’s Key Employee Retention Program, approved by the Bankruptcy Court on September 3, 2005, consisting of the Retention Plan, Severance Plan, Change in Control Severance Program and Long-Term Incentive Plan. Executive shall continue his participation in the Retention Plan and the Long-Term Incentive Plan following the Effective Date with respect to awards granted prior to the Effective Date, subject to the terms and

conditions set forth in such plans. The parties intend that this Agreement will replace and supersede the Severance Plan and the Change in Control Severance Program.

Termination .

4.1. General . Following any termination of the Executive’s employment, the Company shall pay or provide to the Executive, or his estate or beneficiary, as the case may be, (i) Base Salary earned through the date of such termination; (ii) except in the case of a termination described in Section 4.4, any earned, but unpaid, annual cash incentive or other incentive awards, including the Executive’s Annual Bonus earned pursuant to Section 3.2; (iii) a payment representing the Executive’s accrued but unpaid vacation; (iv) any vested, but not forfeited benefits on the date of such termination under the Company’s employee benefit plans, as determined in accordance with the terms of such plans but subject to the provisions of Section 3.3 and 3.4; and (v) benefit continuation and conversion rights to which the Executive is entitled under the Company’s employee benefit plans.

4.2. Death . If the Executive shall die during the Term, the Term shall immediately terminate and the Executive shall be entitled to no further payments or benefits hereunder, except for those payments and benefits described in Section 4.1. All outstanding equity grants shall vest in the manner provided in the applicable award (subject to the provisions of Section 3.3 and 3.4), and any vested but unexercised grants shall become exercisable and shall remain so for the period commencing on the date of such termination through the second anniversary of such termination.

4.3. Disability . If during the Term the Executive shall become physically or mentally disabled (a “Disability”), whether totally or partially, such that the Executive is unable to perform the Executive’s principal services hereunder for a period of not less than ninety (90) consecutive days, the Company may at any time after the last day of such period (provided that such disability is continuing), by written notice to the Executive, terminate the Term. Upon termination under this Section 4.3, all outstanding equity grants shall vest in the manner provided in the applicable award (subject to the provisions of Section 3.3 and 3.4), and any vested but unexercised grants shall become exercisable and shall remain so for the period commencing on the date of such termination through the second anniversary of such termination. In addition to those payments and benefits described in Section 4.1, the Executive shall be entitled to payments made to the Executive pursuant to a Company insurance plan.

4.4. For Cause; Without Good Reason . If the Company terminates the Executive’s employment for Cause or the Executive terminates his employment other than for Good Reason, the Term shall terminate immediately and (i) the Executive shall be entitled to receive no further amounts or benefits hereunder, except those payments and benefits described in Section 4.1 or as required by law, (ii) all unvested equity grants pursuant to Section 3.3 and 3.4 shall be immediately forfeited, and (iii) all vested but unexercised equity grants shall be forfeited on the date which is ninety (90) days following such termination. For purposes of this Agreement, “Cause” shall mean the Executive (A) being convicted of, or pleading guilty or no contest to, a felony (except for motor vehicle violations); (B) engaging in conduct that constitutes gross misconduct or fraud in connection with the performance of his duties to the Company, or (C) materially breaching this Agreement which the Executive does not cure within thirty (30) days

after the Company provides written notice of such breach to the Executive. The Executive shall not terminate his employment without Good Reason prior to the date which is thirty (30) days following the date on which the Executive provides written notice of such termination to the Company; provided, however, that the Company may waive such notice period in writing.

4.5. Without Cause; For Good Reason . If during the Term the Company terminates the Executive’s employment without Cause or if the Executive terminates his employment with Good Reason, the Term shall immediately terminate and the Executive shall be entitled to no further payments or benefits hereunder other than his Accrued Benefits, except: (i) the Company shall make a lump sum payment to the Executive within ten (10 ) business days of such termination in an amount equal to two hundred percent (200%) of the sum of the Base Salary plus target Annual Bonus opportunity for the fiscal year in which occurs the Executive’s termination of employment; (ii) continuing receipt of group insurance, life, medical, dental, disability and other similar benefits described in Section 3.7 (to the extent to which such are in place from time to time, but excluding perquisites) during the twenty-four month period commencing on the date of such termination; and (iii) all outstanding equity grants shall vest in the manner provided in the applicable award (subject to the provisions of Section 3.3 and 3.4), and any vested but unexercised grants shall become exercisable and shall remain so for the period commencing on the date of such termination through the second anniversary of such termination.

For purposes of this Agreement, “Good Reason” shall mean, without the Executive’s consent, the occurrence of any of the following during the Term: (A) any reduction in the Executive’s Base Salary, target bonus opportunity or benefits pursuant to Section 3 of this Agreement without the Executive’s prior consent; (B) a material change in the Executive’s position causing it to be of materially less stature or responsibility, or a change in the Executive’s duties, authorities, responsibilities or reporting relationship, but in each case only if the Company does not cure such change within thirty (30) days after the Executive provides written notice of such change to the Company; (C) the Company materially breaches this Agreement and does not cure such breach within thirty (30) days after the Executive provides written notice of such breach to the Company; or (D) the Executive is not nominated for election to the Board, or the Executive is not timely renominated for election to the Board or is involuntarily removed from the Board under circumstances that would not constitute Cause or Disability hereunder. The Company shall not terminate the Executive’s employment without Cause prior to the date which is thirty (30) days following the date on which the Company provides written notice of such termination to the Executive; provided, however, that the Executive may waive such notice period in writing.

Notwithstanding anything to the contrary in clause (i) immediately above, if the Executive constitutes a “key employee” as defined in Section 416(i) of the Internal Revenue Code and as applied under Section 409A of the Internal Revenue Code at such termination, the payment under clause (i) immediately above shall be paid on the first business day following the sixth month anniversary of the Executive’s termination of employment if necessary to comply with Section 409A of the Internal Revenue Code and regulations issued thereunder.

4.6. Change of Control .

4.6.1 In the event of a Change of Control, the Executive shall become fully vested in all outstanding equity grants as of the date of the Change of Control. In addition to those payments and benefits described in Section 4.1, if during the Term the Company terminates the Executive’s employment without Cause or the Executive terminates his employment with Good Reason, in each case within two (2) years following a Change of Control or the Effective Date, whichever is later, the Term shall immediately terminate and the Executive shall be entitled to no further payments or benefits hereunder other than his Accrued Benefits, except: (i) the Company shall make a lump sum payment to the Executive within ten (10 ) business days of such termination in an amount equal to three hundred percent (300%) of the sum of the Base Salary plus target Annual Bonus opportunity for the fiscal year in which occurs the Executive’s termination of employment; (ii) continuing receipt of group insurance, life, medical, dental, disability and other similar benefits described in Section 3.7 (to the extent to which such are in place from time to time, but excluding perquisites) during the thirty-six month period commencing on the date of each termination; (iii) any previously unvested grants shall become exercisable and all outstanding grants shall remain exercisable for the period commencing on the date of such termination through the earlier the second anniversary of such termination; and (iv) the payment required, if any, pursuant to Section 4.6.3. If the Executive constitutes a “key employee” as defined in Section 416(i) of the Internal Revenue Code and as applied under Section 409A of the Internal Revenue Code at such termination of employment, the payment due under clause (i) immediately above shall be paid on the first business day following the sixth month anniversary of Executive’s termination of employment if necessary to comply with Section 409A of the Internal Revenue Code and regulations issued thereunder.

4.6.2 For purposes of this Agreement, a “Change of Control” shall be deemed to occur upon: (i) the sale, lease, conveyance or other disposition of all or substantially all of the Company’s assets as an entirety or substantially as an entirety to any person, entity or group of persons acting in concert other than in the ordinary course of business; (ii) any transaction or series of related transactions (as a result of a tender offer, merger, consolidation, issuance of securities pursuant to the Plan of Reorganization, purchase or otherwise) that results in any Person (as defined in Section 13(h)(8)(E) under the Securities Exchange Act of 1934) other than the Union VEBA Trust becoming the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of 20% or more of the aggregate voting power of all classes of common equity of the Company, except if such Person is (w) a subsidiary of the Company, (x) an employee benefit plan for employees of the Company or (y) a company formed to hold the Company’s common equity securities and whose shareholders constituted, at the time such company became such holding company, substantially all the shareholders of the Company; or (iii) a change in the composition of the Board over a period of twenty-four (24) consecutive months or less such that a majority of the then current Board members ceases to be comprised of individuals who either (a) have been Board members continuously since the beginning of such period, or (b) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (a) who were still in office at the time such election or nomination was approved by the Board. The parties recognize that a Change of Control may occur contemporaneous with or prior to the Company’s emergence from bankruptcy or the Effective Date.

4.6.3. If it shall be determined that any payment or distribution of any type to or in respect of the Executive made directly or indirectly by the Company, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”), is or will be subject to the excise tax imposed by Section 4999 of the Internal Code of 1986, as amended (the “Code”), or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.

4.6.4 All computations and determinations relevant to Section 4.6.3 and this 4.6.4 shall be made by an independent accounting firm selected and reimbursed by the Company (The “Accounting Firm”), subject to the Executive’s consent (not to be unreasonably withheld), which firm may be the Company’s accountants. Such determination shall include whether any of the Total Payments are “parachute payments” (within the meaning of Section 280G of the Code). In making the initial determination hereunder as to whether a Gross-Up Payment is required, the Accounting Firm shall determine that no Gross-Up Payment is required if the Accounting Firm is able to conclude that no “Change of Control” has occurred (within the meaning of Section 280G of the Code). If the Accounting Firm determines that a Gross-Up Payment is required, the Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter both to the Company and the Executive by no later than ten (10) days following its Determination, if applicable, or such earlier time as is requested by the Company or the Executive (if the Executive reasonably believes that any of the Total Payments may be subject to the Excise Tax). If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive and the Company with a written statement that such Accounting Firm has concluded that no Excise Tax is payable (including the reasons therefor) and that the Executive has substantial authority not to report any Excise Tax on his federal income tax return.

4.6.5 If a Gross-Up Payment is determined to be payable, it shall be paid to the Executive within twenty (20) days after the Determination (and all accompanying calculations and other material supporting the Determination) is delivered to the Company by the Accounting Firm. Any determination by the Accounting Firm shall be binding upon the Company and the Executive, absent manifest error.

4.6.6 As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the Company should have been made (“Underpayment”) or that Gross-Up Payments will have been made by the Company which should not have been made (“Overpayments”). In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the case of an Underpayment, the amount of such Underpayment (together with any interest and penalties payable by the Executive as a result of such Underpayment) shall be promptly paid by the Company to or for the benefit of the Executive.

4.6.7 In the case of an Overpayment, the Executive shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including the filing of returns and claims for refund), follow reasonable instructions from, and procedures established by, the Company, and otherwise reasonably cooperate with the Company to correct such Overpayment, provided, however, that (i) the Executive shall not in any event be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent of this Section 4.6, which is to make the Executive whole, on an after-tax basis, from the application of the Excise Taxes, it being acknowledged and understood that the correction of an Overpayment may result in the Executive repaying to the Company an amount which is less than the Overpayment.

4.6.8 The Executive shall notify the Company in writing of any claim by the Internal Revenue Service relating to the possible application of the Excise Tax under Section 4999 of the Code to any of the payments and amounts referred to herein and shall afford the Company, at its expense, the opportunity to control the defense of such claim (for the sake of clarity, if the Internal Revenue Service is successful in any such claim or the Executive reaches a final settlement with the Internal Revenue Service with respect to such claim (after having afforded the Company, at its expense, the opportunity to control the defense of such claim), the amount of the Excise Tax resulting from such successful claim or settlement shall be determinative as to whether or not there has been an Underpayment or an Overpayment for purposes of Section 4.6.6).

4.6.9 Without limiting the intent of this Section 4.6.9 to make the Executive whole, on an after-tax basis, from the application of the Excise Taxes, all determinations by the Accounting Firm shall be made with a view to minimizing the application of Sections 280G and 4999 of the Code of any of the Total Payments, subject, however, to the following: the Accounting Firm shall make its determination on the basis of substantial authority and shall provide opinions to that effect to both the Company and the Executive upon the request of either of them.

4.7. End of Term . If the Company notifies the Executive that the Term will not be extended in accordance with the provisions of Section 2.1, the Executive shall be entitled to no further payments or benefits, except for those payments and benefits described in Section 4.1. All outstanding equity grants shall vest in the manner provided in the applicable award (subject to the provisions of Section 3.3 and 3.4), and any vested but unexercised grants shall become exercisable and shall remain so for the period commencing on the expiration of the Term and continuing through the second anniversary of the end of the Term.

4.8. No Mitigation . Upon termination of the Executive’s employment with the Company, the Executive shall be under no obligation to seek other employment or otherwise to mitigate the obligations of the Company under this Agreement.

Protection of Confidential Information; Non-Competition .

5.1. The Executive acknowledges that the Executive’s services will be unique, that they will involve the development of Company-subsidized relationships with key customers,

suppliers, and service providers as well as with key Company employees and that the Executive’s work for the Company will give the Executive access to highly confidential information not available to the public or competitors, including trade secrets and confidential marketing, sales, product development and other data and information which it would be impracticable for the Company to effectively protect and preserve in the absence of this Section 5 and the disclosure or misappropriation of which could materially adversely affect the Company. Accordingly, the Executive agrees:

5.1.1 Except in the course of performing the Executive’s duties provided for in Section 1.1, not at any time, whether before, during or after the Executive’s employment with the Company, to divulge to any other entity or person any confidential information acquired by the Executive concerning the Company’s or its affiliates’ financial affairs or business processes or methods or their research, development or marketing programs or plans, or any other of its or their trade secrets. In the event that the Executive is requested or required to make disclosure of information subject to this Section 5.1.1 under any court order, subpoena or other judicial process, then, except as prohibited by law, the Executive will promptly notify the Company, take all reasonable steps requested by the Company to defend against the compulsory disclosure and permit the Company to control with counsel of its choice any proceeding relating to the compulsory disclosure. The Executive acknowledges that all information, the disclosure of which is prohibited by this section, is of a confidential and proprietary character and of great value to the Company.

5.1.2 to deliver promptly to the Company on termination of the Executive’s employment with the Company, or at any time that the Company may so request, all confidential memoranda, notes, records, reports, manuals, drawings, blueprints and other documents (and all copies thereof) relating to the Company’s business and all property associated therewith, which the Executive may then possess or have under the Executive’s control.

5.2. In consideration of the Company’s entering into this Agreement, the Executive agrees that at all times during the Term and thereafter, until the first anniversary of the date of the termination of the Term for any reason, the Executive shall not, directly or indirectly, for himself or on behalf of or in conjunction with, any other person, company, partnership, corporation, business, group, or other entity (each, a “Person”):

5.2.1 provide services to a “Competitor” (as defined below), as an officer, director, shareholder, owner, partner, joint venturer, or in any other capacity, whether as an executive, independent contractor, consultant, advisor, or sales representative; or

5.2.2 call upon any Person who is or that is, at such date of termination, engaged in activity on behalf of the Company or any affiliate of the Company for the purpose or with the intent of enticing such Person to cease such activity on behalf of the Company or such affiliate.

For purposes of this Agreement, “Competitor” means, on any date, a person or entity that is primarily engaged in a material line of business conducted by the Company.

5.3. If the Executive commits a breach of any of the provisions of Section 5.1 or 5.2 hereof, the Company shall have the right and remedy to have the provisions of this Agreement

specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company, and, if the Executive attempts or threatens to commit a breach of any of the provisions of Section 5.1 or 5.2, the right and remedy to be granted a preliminary and permanent injunction in any court having equity jurisdiction against the Executive with respect to the attempted or threatened breach, it being agreed that each of such rights and remedies shall be independent of the others and shall be severally enforceable, and that all of such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity.

5.4. If any of the covenants contained in Section 5.1, 5.2 or 5.3, or any part thereof, hereafter are construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect, without regard to the invalid portions.

5.5. The period during which the prohibitions of Section 5.2 are in effect shall be extended by any period or periods during which the Executive is in violation of Section 5.2.

5.6. If any of the covenants contained in Section 5.1 or 5.2, or any part thereof are held to be unenforceable because of the duration of such provision or the area covered thereby, the parties agree that the court making such determination shall have the power to reduce the duration and/or area of such provision so as to be enforceable to the maximum extent permitted by applicable law and, in its reduced form, said provision shall then be enforceable.

5.7. The parties hereto intend to and hereby confer jurisdiction to enforce the covenants contained in Sections 5.1, 5.2 and 5.3 upon the courts of any state within the geographical scope of such covenants. In the event that the courts of any one or more of such states shall hold such covenants wholly unenforceable by reason of the breadth of such covenants or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Company’s right to the relief provided above in the courts of any other states within the geographical scope of such covenants as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each state being for this purpose severable into diverse and independent covenants.

Inventions and Patents .

The Executive agrees that all processes, technologies and inventions (collectively, “Inventions”), including new contributions, improvements, ideas and discoveries, whether patentable or not, conceived, developed, invented or made by him during the Term shall belong to the Company, provided that such Inventions grew out of the Executive’s work with the Company or any of its subsidiaries or affiliates, are related in any manner to the business (commercial or experimental) of the Company or any of its subsidiaries or affiliates or are conceived or made on the Company’s time or with the use of the Company’s facilities or materials. The Executive shall further (a) promptly disclose such Inventions to the Company; (b) assign to the Company, without additional compensation, all patent and other rights to such Inventions for the United States and foreign countries; (c) sign all papers necessary to carry out the foregoing; and (d) give testimony in support of the Executive’s inventorship.

Intellectual Property .

Notwithstanding and without limiting the provisions of Section 6, the Company shall be the sole owner of all the products and proceeds of the Executive’s services hereunder, including, but not limited to, all materials, ideas, concepts, formats, suggestions, developments, arrangements, packages, programs and other intellectual properties that the Executive may acquire, obtain, develop or create in connection with or during the Term, free and clear of any claims by the Executive (or anyone claiming under the Executive) of any kind or character whatsoever (other than the Executive’s right to receive payments hereunder), the Executive shall, at the request of the Company, execute such assignments, certificates or other instruments as the Company may from time to time deem necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend its right, title or interest in or to any such properties.

Indemnification .

In addition to any rights to indemnification to which the Executive is entitled under the Company’s charter and by-laws, to the extent permitted by applicable law, the Company will indemnify, from the assets of the Company supplemented by insurance in an amount customary for corporations similar in size and value to the Company and engaged in business activities similar to the business activities of the Company, the Executive at all times, during and after the Term, and, to the maximum extent permitted by applicable law, shall pay the Executive’s expenses (including reasonable attorneys’ fees and expenses, which shall be paid in advance by the Company as incurred, subject to recoupment in accordance with applicable law) in connection with any threatened or actual action, suit or proceeding to which the Executive may be made a party, brought by any shareholder of the Company directly or derivatively or by any third party by reason of any act or omission or alleged act or omission in relation to any affairs of the Company or any subsidiary or affiliate of the Company of the Executive as an officer, director or employee of the Company or of any subsidiary or affiliate of the Company. The Company shall maintain during the Term and thereafter insurance coverage sufficient to satisfy any indemnification obligation of the Company arising under this Section 8.

Notices .

All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, one day after sent by overnight courier or three days after mailed first class, postage prepaid, by registered or certified mail as follows (or to such other address as either party shall designate by notice in writing to the other in accordance herewith):

If to the Company, to:

Kaiser Aluminum Corporation
27422 Portola Parkway, Suite 350
Foothill Ranch, California 92610

Attn: General Counsel

If to the Executive, to the Executive’s principal residence as reflected in the records of the Company.

10.

General .

10.1. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to agreements made between residents thereof and to be performed entirely in Delaware.

10.2. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

10.3. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter hereof and supersedes all prior agreements, arrangements and understandings, written or oral, relating to the subject matter hereof. No representation, promise or inducement has been made by either party that is not embodied in this Agreement, and neither party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

10.4. This Agreement, and the Executive’s rights and obligations hereunder, may not be assigned by the Executive, nor may the Executive pledge, encumber or anticipate any payments or benefits due hereunder, by operation of law or otherwise. The Company may assign its rights, together with its obligations, hereunder (i) to any affiliate or (ii) to a third party in connection with any sale, transfer or other disposition of all or substantially all of any business to which the Executive’s services are then principally devoted, provided that no assignment pursuant to clause (ii) shall relieve the Company from its obligations hereunder to the extent the same are not timely discharged by such assignee. In this regard, the parties acknowledge that Executive shall be employed by the Company’s subsidiary, Kaiser Aluminum Fabricated Products, LLC, a Delaware limited liability company (“KAFP”), and that while Executive is employed by KAFP, KAFP shall assume the payment obligations of the Company under this Agreement subject to the proviso set forth above in the preceding sentence which states that the Company shall not be relieved of its obligations hereunder to the extent that the obligations assumed by KAFP are not timely discharged by KAFP.

10.5. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Term to the extent necessary to the intended preservation of such rights and obligations.

10.6. This Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants hereof may be waived, only by a written instrument executed by both of the parties hereto, or in the case of a waiver, by the party waiving compliance. The failure of either party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by either party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breath, or a waiver of the breach of any other term or covenant contained in this Agreement.

10.7. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

11.

Dispute Resolution .

Subject to the rights of the Company pursuant to Section 5.3 above, any controversy, claim or dispute arising out of or relating to this Agreement, the breach thereof, or the Executive’s employment by the Company shall be settled by arbitration with one arbitrator. The arbitration will be administered by the American Arbitration Association in accordance with its National Rules for Resolution of Employment Disputes. The arbitration proceeding shall be confidential, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction. Any such arbitration shall take place in the Orange County, California, or in any other mutually agreeable location. In the event any judicial action is necessary to enforce the arbitration provisions of this Agreement, sole jurisdiction shall be in the federal and state courts, as applicable, located in California. Any request for interim injunctive relief or other provisional remedies or opposition thereto shall not be deemed to be a waiver of the right or obligation to arbitrate hereunder. The Company shall pay or promptly reimburse the Executive for all reasonable costs, fees and expenses relating to such dispute, including reasonable legal fees.

12.

Subsidiaries; Affiliates; and Benefits .

As used herein, the term “subsidiary” shall mean any corporation or other business entity controlled directly or indirectly by the corporation or other business entity in question; the term “affiliate” shall mean and include any corporation or other business entity directly or indirectly controlling, controlled by or under common control with the corporation or other business entity in question; and references to “benefits” and “benefit plans” shall include the benefits provided by the Company and the Company’s subsidiaries from time to time to senior executives of the Company generally and the underlying plans.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.


KAISER ALUMINUM CORPORATION
By:	/s/ John M. Donnan
	Name:	John M. Donnan
	Title:	Vice President, Secretary & General Counsel



		/s/ Jack A. Hockema
		Jack A. Hockema

Exhibit 10.6

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this “Agreement”) dated as of July 6, 2006, between KAISER ALUMINUM CORPORATION, a Delaware corporation (the “Company”), and Joseph P. Bellino (the “Executive”).

The Company wishes to continue to employ the Executive, and the Executive wishes to continue his employment with the Company, on the terms and conditions set forth in this Agreement.

Accordingly, the Company and the Executive hereby agree as follows:

Employment; Duties and Acceptance .

1.1. Employment Duties . The Company hereby agrees to employ the Executive for the Term (as defined in Section 2.1), to render exclusive and full-time services to the Company and its and affiliates, in the capacity of executive vice president and chief financial officer of the Company and to perform such other duties consistent with such position (including service as a director or officer of any affiliate of the Company if elected) as may be assigned by the chief executive officer of the Company or the Board of Directors of the Company (the “Board”); provided, however, that the Executive may serve on the Board of Directors of one other business at any time during the Term that does not compete with the Company and may participate in civic, charitable and industry organizations to the extent that such participation does not materially interfere with the performance of his duties hereunder. The Executive’s title shall be Executive Vice President and Chief Financial Officer, or such other titles of at least equivalent level consistent with the Executive’s duties from time to time as may be assigned to the Executive by the Board, and the Executive shall have all authorities as are customarily and ordinarily exercised by executives in similar positions in similar businesses in the United States. The Executive shall report to the chief executive officer of the Company.

Term of Employment .

2.1. Term . The term of the Executive’s employment under this Agreement (the “Term”) shall commence on the date hereof (the “Effective Date”), and shall continue until the earlier of (i) May 15, 2009 and (ii) such earlier date on which the Term is terminated pursuant to Section 4. The Term shall automatically be renewed and extended for successive periods of one (1) year unless either party hereto shall have notified the other party hereto in writing that such

extension shall not take effect at least one (1) year prior to the end of the initial Term or of any extension.

Compensation; Benefits .

3.1. Salary . As compensation for the services to be rendered pursuant to this Agreement, the Company agrees to pay to the Executive during the Term a base salary, payable monthly in arrears, at the initial annual rate of $350,000 (the “Base Salary”). On each anniversary of the Effective Date or such other appropriate date as may be agreed by the parties during the Term, the Company shall review the Base Salary and determine if, and by how much, the Base Salary should be increased. Once the Base Salary has been increased hereunder, it shall not be decreased without the Executive’s consent. All payments of Base Salary or other compensation hereunder shall be less such deductions or withholdings as are required by applicable law and regulations.

3.2. Bonus . In addition to the amounts to be paid to the Executive pursuant to Section 3.1, if the Company achieves 100% or more of the Company’s target objectives for a fiscal year of the Company, such target objectives which are recommended by the Executive and approved by the Compensation Committee of the Board (the “Compensation Committee”) not later than March 31 of such year, the Executive shall receive an annual bonus (an “Annual Bonus”) equal to the product of (i) the Executive’s Base Salary at the rate in effect at the end of such fiscal year and (ii) 50%. Should the Company achieve such target objectives in a fiscal year which are significantly beyond expectations for the Company’s performance for such year, the 50% multiplier set forth in clause (ii) of the preceding sentence shall be increased up to a maximum of 300% of the target bonus opportunity (or 150% of Base Salary). A formula will be established to provide for recognition of threshold objectives below such target objectives and for pro rata awards between the threshold award opportunity and the maximum award opportunity. Any Annual Bonus earned hereunder shall be payable not later than the 15 ^th day of the third month following the end of the fiscal year to which it relates. The Annual Bonus for 2006 shall not be prorated for the portion of the year Executive is actually employed by the Company.

3.3. Emergence Grant. As of the Effective Date, the Executive will be awarded a one-time grant of 15,000 shares of restricted stock of the Company, subject to a three-year cliff vesting schedule and other customary restrictions that shall lapse on the third anniversary of the date of such award or earlier upon a Change of Control or the Executive’s retirement, death, Disability, termination of employment under this Agreement other than for Cause or termination

by the Executive for Good Reason. For purposes of this Section 3.3, the term “retirement” means the Executive’s termination of employment for any reason at or after the earlier of age 65.

4. Termination .

and any vested but unexercised grants shall become exercisable and shall remain so for the period commencing on the date of such termination through the second anniversary of such termination.

4.5. Without Cause; For Good Reason . If during the Term the Company terminates the Executive’s employment without Cause or if the Executive terminates his employment with Good Reason, the Term shall immediately terminate and the Executive shall be entitled to no further payments or benefits hereunder other than his Accrued Benefits, except: (i) the Company shall make a lump sum payment to the Executive within ten (10 ) business days of such termination in an amount equal to two hundred percent (200%) of the sum of the Base Salary for the fiscal year in which occurs the Executive’s termination of employment; (ii) continuing receipt of group insurance, life, medical, dental, disability and other similar benefits described in Section 3.7 (to the extent to which such are in place from time to time, but excluding perquisites) during the twenty-four month period commencing on the date of such termination; and (iii) all outstanding equity grants shall vest in the manner provided in the applicable award (subject to the provisions of Section 3.3 and 3.4), and any vested but unexercised grants shall become exercisable and shall remain so for the period commencing on the date of such termination through the second anniversary of such termination.

For purposes of this Agreement, “Good Reason” shall mean, without the Executive’s consent, the occurrence of any of the following during the Term: (A) any reduction in the Executive’s Base Salary, target bonus opportunity or benefits pursuant to Section 3 of this Agreement without the Executive’s prior consent; (B) a material change in the Executive’s position causing it to be of materially less stature or responsibility, or a change in the Executive’s duties, authorities, responsibilities or reporting relationship, but in each case only if the Company does not cure such change within thirty (30) days after the Executive provides written notice of such change to the Company; or (C) the Company materially breaches this Agreement and does not cure such breach within thirty (30) days after the Executive provides written notice of such breach to the Company. The Company shall not terminate the Executive’s employment without Cause prior to the date which is thirty (30) days following the date on which the Company provides written notice of such termination to the Executive; provided, however, that the Executive may waive such notice period in writing.

4.6. Change of Control .

Company or the Executive (if the Executive reasonably believes that any of the Total Payments may be subject to the Excise Tax). If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive and the Company with a written statement that such Accounting Firm has concluded that no Excise Tax is payable (including the reasons therefor) and that the Executive has substantial authority not to report any Excise Tax on his federal income tax return.

Protection of Confidential Information; Non-Competition .

5.1. The Executive acknowledges that the Executive’s services will be unique, that they will involve the development of Company-subsidized relationships with key customers, suppliers, and service providers as well as with key Company employees and that the Executive’s work for the Company will give the Executive access to highly confidential information not available to the public or competitors, including trade secrets and confidential marketing, sales, product development and other data and information which it would be impracticable for the Company to effectively protect and preserve in the absence of this Section 5 and the disclosure or misappropriation of which could materially adversely affect the Company. Accordingly, the Executive agrees:

For purposes of this Agreement, “Competitor” means, on any date, a person or entity that is primarily engaged in a material line of business conducted by the Company.

5.3. If the Executive commits a breach of any of the provisions of Section 5.1 or 5.2 hereof, the Company shall have the right and remedy to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company, and, if the Executive attempts or threatens to commit a breach of any of the provisions of Section 5.1 or 5.2, the right and remedy to be granted a preliminary and permanent injunction in any court having equity jurisdiction against the Executive with respect to the attempted or threatened breach, it being agreed that each of such rights and remedies shall be independent of the others and shall be severally enforceable, and that all of such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity.

5.5. The period during which the prohibitions of Section 5.2 are in effect shall be extended by any period or periods during which the Executive is in violation of Section 5.2.

Inventions and Patents .

Intellectual Property .

Indemnification .

connection with any threatened or actual action, suit or proceeding to which the Executive may be made a party, brought by any shareholder of the Company directly or derivatively or by any third party by reason of any act or omission or alleged act or omission in relation to any affairs of the Company or any subsidiary or affiliate of the Company of the Executive as an officer, director or employee of the Company or of any subsidiary or affiliate of the Company. The Company shall maintain during the Term and thereafter insurance coverage sufficient to satisfy any indemnification obligation of the Company arising under this Section 8.

Notices .

If to the Company, to:


Kaiser Aluminum Corporation 27422 Portola Parkway, Suite 350 Foothill Ranch, California 92610 Attn: General Counsel

If to the Executive, to the Executive’s principal residence as reflected in the records of the Company.

10.

General .

10.2. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

10.3. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter hereof and supersedes all prior agreements, arrangements and understandings, written or oral, relating to the subject matter hereof, including that certain Employment Agreement effective as of May 15, 2006, between Executive and Kaiser Aluminum & Chemical Corporation, a Delaware corporation. No representation, promise or inducement has been made by either party that is not embodied in this Agreement, and neither party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

Executive’s services are then principally devoted, provided that no assignment pursuant to clause (ii) shall relieve the Company from its obligations hereunder to the extent the same are not timely discharged by such assignee. In this regard, the parties acknowledge that Executive shall be employed by the Company’s subsidiary, Kaiser Aluminum Fabricated Products, LLC, a Delaware limited liability company (“KAFP”), and that while Executive is employed by KAFP, KAFP shall assume the payment obligations of the Company under this Agreement subject to the proviso set forth above in the preceding sentence which states that the Company shall not be relieved of its obligations hereunder to the extent that the obligations assumed by KAFP are not timely discharged by KAFP.

10.7. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

11.

Dispute Resolution .

12.

Subsidiaries; Affiliates; and Benefits .

As used herein, the term “subsidiary” shall mean any corporation or other business entity controlled directly or indirectly by the corporation or other business entity in question; and the term “affiliate” shall mean and include any corporation or other business entity directly or indirectly controlling, controlled by or under common control with the corporation or other business entity in question; and references to “benefits” and “benefit plans” shall include the benefits provided by the Company and the Company’s subsidiaries from time to time to senior executives of the Company generally and the underlying plans.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.


KAISER ALUMINUM CORPORATION
By:	/s/ John M. Donnan
	Name:	John M. Donnan
	Title:	Vice President, Secretary & General Counsel



	/s/ Joseph P. Bellino
	Joseph P. Bellino

Exhibit 10.7

EMPLOYMENT AGREEMENT

This Employment Agreement (the “ Agreement ”) is made effective as of July 6, 2006 between Kaiser Aluminum Corporation, a Delaware corporation (the “ Company ”), and Daniel D. Maddox (the “ Executive ”).

WHEREAS, the parties acknowledge and affirm that Executive is a participant in the Kaiser Aluminum & Chemical Corporation Key Employee Retention Plan and Retention Agreement for Executive, both effective September 3, 2002 (collectively, the “KERP”), Severance Agreement and Plan, both effective September 3, 2002 (collectively, the “Severance Plan”), the Kaiser Aluminum & Chemical Corporation Change in Control Severance Plan and Change in Control Severance Agreement dated November 18, 2002 (collectively “CIC Agreement”), and the Long Term Incentive Plan (“LTI Plan”), each of which have been assigned by Kaiser Aluminum & Chemical Corporation to the Company’s subsidiary, Kaiser Aluminum Fabricated Products, LLC, a Delaware limited liability company (“KAFP”);

WHEREAS, the KERP, Severance Plan, CIC Agreement and LTI Plan have not been “materially modified” (as that term is defined in Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) and guidance existing on the date of this Agreement) after October 3, 2004;

WHEREAS, it is contemplated that Executive will be a participant in the Kaiser Aluminum Corporation 2006 Equity and Performance Incentive Plan (the “2006 Incentive Plan”) and that Executive will be awarded restricted shares under the 2006 Incentive Plan pursuant to the terms of Executive’s Kaiser Aluminum Corporation 2006 Equity and Performance Incentive Plan Restricted Stock Award Agreement (the “Award Agreement”); and

WHEREAS, the Company desires to secure the continuing services of Executive as Vice President and Controller of the Company, and Executive desires to perform such services for the Company, on the terms and conditions as set forth herein.

NOW THEREFORE, in consideration of the premises and of the covenants and agreements set forth below, it is mutually agreed as follows:

1. Effective Date, Term and Duties . The term of this Agreement shall begin on the effective date set forth above and unless earlier terminated pursuant to Section 4, continue through the earlier of (a) a mutually agreed termination date, or (b) March 31, 2007 (the “ Employment Period ”).

1.1 Executive shall have such duties as the Company may from time to time prescribe consistent with his position as Vice President and Controller of the Company and its affiliates (the “ Services ”).

1.2 Executive shall report directly to the Company’s Chief Financial Officer.

1.3 Executive shall devote his full time, attention, energies and best efforts to the business of the Company, including the training of Executive’s successor and the transition of responsibilities to the Company’s designee before the expiration of the terms of this Agreement.

1.4 The Company shall maintain an office for Executive in Houston, Texas, if requested by Executive; provided, however that Executive agrees and acknowledges that routine travel to the Company’s headquarters will be required at least one or more times monthly.

2. Compensation. The Company shall pay and Executive shall accept as full consideration for the Services, compensation and benefits described in this Agreement.

2.1 Base Salary . An annual base salary of $225,000, payable in installments in accordance with the Company’s normal payroll practices. The foregoing adjustment to Executive base salary shall be effective as of February 1, 2006.

2.2 Short Term Incentive . An annual short term incentive bonus target of $75,000 pro-rated for partial years. The annual short term incentive bonus will be paid at the same time that all executive annual short term incentive bonus amounts are paid (but in no event later than March 31 of the following year) and will be based on a formula resulting from performance similar to the formula used with other senior executive incentives.

2.3 Long-Term Incentive . A long term incentive award upon emergence in the form of 11,334 shares of restricted common stock of the Company issued under the 2006 Incentive Program. Such shares shall vest upon Executive’s termination of employment for any reason other than termination by the Company for “Cause” as defined in the Severance Plan and CIC Agreement. In all other respects, the terms of such grant of restricted shares of the Company’s common stock under Executive’s Award Agreement will be consistent with the terms of emergence grants made to other executives under the Company’s post-emergence equity incentive program.

3. Benefits and other Perquisites during Employment Period . Executive will be eligible to participate in the Company’s employee benefit plans of general application, including, without limitation, those plans covering retirement, 401(k) savings, medical, disability, sick leave and life insurance in accordance with the rules established for individual participation in any such plan and under applicable law. Executive will receive such other benefits as the Company or its subsidiaries generally provides to other employees of comparable position and experience, including the continuation of Executive’s car allowance.

4. Termination of Employment .

4.1 This Agreement may be terminated by the Company for Cause. Upon termination for Cause, Executive shall not be entitled to any further benefits under this Agreement.

4.2 At the end of the end of the Employment Period, Executive may terminate his employment. Executive’s termination of employment (other than by death or disability or by the Company for Cause) at the expiration of the Employment Period will be considered a termination by Executive for “Good Reason” (as that term is defined in the Severance Plan

and/or CIC Agreement, as applicable and the Award Agreement) under the Severance Plan and/or CIC Agreement, as applicable, and the Award Agreement.

4.3 Upon Executive’s termination of employment, Executive will be entitled to receive all payments and benefits prescribed under the terms of the KERP, Severance Plan, CIC Agreement and/or LTI Plan. If for any reason, a “Change-in-Control” as defined in the CIC Agreement has not occurred or is not otherwise deemed to have occurred upon the emergence of KAC from Chapter 11, Executive will be receive the benefits Executive would have otherwise received had such a Change-in-Control occurred prior to Executive’s termination of his employment under Section 4.2. These payments and benefits will be in lieu of any other severance or termination payment or benefits provided in the Company’s benefit plans and policies.

5. Compliance with Section 409A .

5.1 This Agreement shall be construed and interpreted in accordance with Section 409A and is intended to comply with Section 409A. It is the understanding of the Company and Executive that the Company intends to amend or modify and administer each of the Company’s existing employment, compensation and benefits arrangements, including this Agreement, in compliance with Section 409A to avoid adverse tax consequences to the participants; however, the Company is not responsible for any such consequences should they occur. To the extent that any benefit under this Agreement is subject to Section 409A, it shall be paid in a manner that will comply with Section 409A, including proposed, temporary or final regulations or any other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto (the “Guidance”). Any provision of this Agreement that would cause any benefit under this Agreement to fail to satisfy Section 409A shall have no force and effect until amended to comply with Section 409A (which amendment may be retroactive to the extent permitted by the Guidance). Any cash payment delayed under this Section will accrue interest during the period the payment is delayed equal to the average prime rate of JP Morgan Chase & Co. for the period of such delay.

5.1 No adjustment or amendment to this Agreement will be undertaken which would result in (a) any reduction of the amount or value of any payments or benefits to be received by Executive under this Agreement or (b) a “material modification” of this Agreement as provided in Section 409A or the Guidance, unless specifically agreed to in writing by Executive.

6. Termination by Reason of Death or Disability . The Executive’s employment shall terminate automatically upon Executive’s death during the Employment Period. If during the term of this Agreement, Executive is unable to perform his job due to disability (as determined under the Company’s long-term disability insurance program) for 6 months in any 12 month period, the Company may, at its discretion, terminate Executive’s employment. In the event of Executive’s death or disability during the Employment Period, the Company shall pay to Executive or Executive’s estate any base salary, pro-rated guaranteed bonus and unpaid vacation accrued as of the date of Executive’s death or disability and any other benefits payable under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of death or disability and in accordance with applicable law, including but not

limited to those payments and benefits available to Executive under the KERP, the Severance Plan, the CIC Agreement and/or the LTI Plan.

7. Dispute Resolution. The Company and Executive agree that any dispute regarding the interpretation or enforcement of this Agreement shall be decided by a confidential, final and binding arbitration conducted by Judicial Arbitration and Mediation Services (“JAMS”) under the then existing JAMS rules, rather than by litigation in court, trial by jury, administrative proceeding or in any other forum.

8. Cooperation with the Company After Termination of the Employment Period . Following termination of the Employment Period by Executive, Executive shall fully cooperate with the Company in all matters relating to the winding up of his pending work on behalf of the Company and the orderly transfer of any such pending work to other employees of the Company or its subsidiaries as may be designated by the Company.

9. General

9.1 Waiver . Neither party shall, by mere lapse of time, without giving notice or taking action hereunder, be deemed to have waived any breach by the other of any of the provisions of this Agreement. Further, the waiver by either party of a particular breach of this Agreement by the other shall neither be construed as, nor constitute, a continuing waiver of such breach or of other breaches by the same or any other provision of this Agreement.

9.2 Severability . If for any reason a court of competent jurisdiction or arbitrator finds any provision of this Agreement to be unenforceable, the provision shall be deemed amended as necessary to conform to applicable laws or regulations, or if it cannot be so amended without materially altering the intention of the parties, the remainder of the Agreement shall continue in full force and effect as if the offending provision were not contained herein.

9.3 No Mitigation . Executive shall have no duty to mitigate, by seeking other employment following a termination of his employment, the obligations of the Company or its subsidiaries with respect to any termination or other payments made to Executive under the terms of this Agreement (the KERP, Severance Plan, CIC Agreement or LTI Plan), nor shall such payments be subject to offset or reductions by reason of any compensation received by Executive from such other employment. The obligations of the Company to make payments under this Agreement (or of the Company or its subsidiaries under the KERP, Severance Plan, CIC Agreement or LTI Plan) shall not terminate or otherwise be affected in the event Executive accepts other full-time employment.

9.4 Notices . All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be considered effective upon personal service or upon depositing such notice in the U.S. Mail, postage prepaid, return receipt requested and addressed to the General Counsel of the Company at its principal corporate address, and to Executive at his most recent address shown on the Company’s corporate records, or at any other address which he may specify in any appropriate notice to the Company.

9.5 Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together constitutes one and the

same instrument and in making proof hereof it shall not be necessary to produce or account for more than one such counterpart.

9.6 Entire Agreement . The parties hereto acknowledge that each has read this Agreement, understands it, and agrees to be bound by its terms. The parties further agree that this Agreement (combined with the KERP, Severance Plan, CIC Agreement and LTI Plan, as those agreements have been made applicable to Executive in the individual agreements executed by Executive) constitute the complete and exclusive statement of the agreement between the parties and supercede all proposals (oral or written), understandings, representations, conditions, covenants and all other communications between the parties relating to the subject matter hereof. For the avoidance of doubt, nothing contained in this Agreement shall be deemed to modify or amend the provisions of the KERP, Severance Plan, CIC Agreement or LTI Plan and in the event of any conflict with the terms of this Agreement, the terms of the KERP, Severance Plan, CIC Agreement and LTI Plan will control.

9.7 Governing Law . This Agreement shall be governed by the laws of the State of California.

9.8 Assignment . This Agreement, and the Executive’s rights and obligations hereunder, may not be assigned by the Executive, nor may the Executive pledge, encumber or anticipate any payments or benefits due hereunder, by operation of law or otherwise. The Company may assign its rights, together with its obligations, hereunder (i) to any affiliate or (ii) to a third party in connection with any sale, transfer or other disposition of all or substantially all of any business to which the Executive’s services are then principally devoted, provided that no assignment pursuant to clause (ii) shall relieve the Company from its obligations hereunder to the extent the same are not timely discharged by such assignee. In this regard, the parties acknowledge that Executive shall be employed by KAFP, and that while Executive is employed by KAFP, KAFP shall assume the payment obligations of the Company under this Agreement subject to the proviso set forth above in the preceding sentence which states that the Company shall not be relieved of its obligations hereunder to the extent that the obligations assumed by KAFP are not timely discharged by KAFP.

9.9 Subsidiaries; Affiliates; and Benefits . As used herein, the term “subsidiary” shall mean any corporation or other business entity controlled directly or indirectly by the corporation or other business entity in question; the term “affiliate” shall mean and include any corporation or other business entity directly or indirectly controlling, controlled by or under common control with the corporation or other business entity in question; and references to “benefits” and “benefit plans” shall include the benefits provided by the Company and the Company’s subsidiaries from time to time to senior executives of the Company generally and the underlying plans and policies.

9.10 Authority to Execute . The person executing this Agreement on behalf of the Company warrants and represents his/her authority to execute this Agreement and bind the Company, its successors and assigns.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.


KAISER ALUMINUM CORPORATION
By:	/s/ John M. Donnan
	Name:	John M. Donnan
	Title: Vice President, Secretary & General Counsel


	EXECUTIVE
	By:	/s/ Daniel D. Maddox
		Daniel D. Maddox

Exhibit 10.8

FORM OF DIRECTOR INDEMNIFICATION AGREEMENT

This Director Indemnification Agreement, dated as of July 6, 2006 (this “ Agreement ”), is made by and between Kaiser Aluminum Corporation, a Delaware corporation (the “ Company ”), and [___] (“ Indemnitee ”).

RECITALS

A. Section 141 of the General Corporation Law of the State of Delaware provides that the business and affairs of a corporation shall be managed by or under the direction of its board of directors.

B. By virtue of the managerial prerogatives vested in the directors of a Delaware corporation, directors act as fiduciaries of the corporation and its stockholders.

C. Thus, it is critically important to the Company and its stockholders that the Company be able to attract and retain the most capable persons reasonably available to serve as directors of the Company.

D. In recognition of the need for corporations to be able to induce capable and responsible persons to accept positions in corporate management, Delaware law authorizes (and in some instances requires) corporations to indemnify their directors and officers, and further authorizes corporations to purchase and maintain insurance for the benefit of their directors and officers.

E. The Delaware courts have recognized that indemnification by a corporation serves the dual policies of (1) allowing corporate officials to resist unjustified lawsuits, secure in the knowledge that, if vindicated, the corporation will bear the expense of litigation and (2) encouraging capable women and men to serve as corporate directors and officers, secure in the knowledge that the corporation will absorb the costs of defending their honesty and integrity.

F. The indemnification of directors and officers by a corporation serves as an important supplement to directors’ and officers’ liability insurance and as a replacement for such insurance in circumstances where such insurance is unavailable.

G. The number of lawsuits challenging the judgment and actions of directors of Delaware corporations, the costs of defending those lawsuits and the threat to directors’ personal assets have all materially increased over the past several years, chilling the willingness of capable women and men to undertake the responsibilities imposed on corporate directors.

H. Recent federal legislation and rules adopted by the Securities and Exchange Commission and the national securities exchanges and the National Association of Securities Dealers, Inc. have imposed additional disclosure and corporate governance obligations on directors and officers of public companies and have exposed such directors and officers to new and substantially broadened civil liabilities.

I. These legislative and regulatory initiatives have also exposed directors of public companies to a significantly greater risk of criminal proceedings, with attendant defense costs and potential criminal fines and penalties.

J. Under Delaware law, a director’s right to be reimbursed for the costs of defense of criminal actions, whether such claims are asserted under state or federal law, does not depend upon the merits of the claims asserted against the director and is separate and distinct from any right to indemnification the director may be able to establish, and indemnification of the director against criminal fines and penalties is permitted if the director satisfies the applicable standard of conduct.

K. Indemnitee is a director of the Company and does not regard the protection afforded to him/her by Delaware law and the Company’s certificate of incorporation and bylaws (collectively, the “ Constituent Documents ”) as adequate, and his/her willingness to serve in such capacity is predicated, in substantial part, upon (1) the Company’s willingness to provide protection to him/her pursuant to express contract rights providing for the Company to indemnify him/her in accordance with the principles reflected above, to the fullest extent permitted by Delaware law, and (2) the other undertakings set forth in this Agreement.

L. Therefore, in recognition of the need to provide Indemnitee with substantial protection against personal liability, in order to procure Indemnitee’s continued service as a director of the Company and to enhance Indemnitee’s ability to serve the Company in an effective manner, and in order to provide such protection pursuant to express contract rights (intended to be enforceable irrespective of, among other things, any amendment to the Constituent Documents, any change in the composition of the Company’s Board of Directors (the “ Board ”) or any change-in-control or business combination transaction relating to the Company), the Company wishes to provide in this Agreement for (1) the indemnification of and the advancement of Expenses (as defined in Section 1(e)) to Indemnitee as set forth in this Agreement as a supplement to, and in furtherance of, the indemnification provided by the Constituent Documents or resolutions of the Board and (2) the continued coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance policies.

M. In light of the factors referred to in the preceding recitals, it is the Company’s intention and desire that the provisions of this Agreement be construed liberally, subject to their express terms, to maximize the protections to be provided to Indemnitee hereunder.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing, the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:

1. Certain Definitions . In addition to terms defined elsewhere herein, the following terms have the following meanings when used in this Agreement with initial capital letters:

(a) “ Change in Control ” means the occurrence on or after the date of this Agreement of any of the following events:

(i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “ Person ”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the combined voting power of the then-outstanding Voting Stock of the Company; provided , however , that:

(A) for purposes of this Section 1(a)(i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition of Voting Stock of the Company directly from the Company (x) pursuant to the Second Amended Joint Plan of Reorganization of Kaiser Aluminum Corporation, Kaiser Aluminum & Chemical Corporation and Certain of Their Debtor Affiliates, as modified, filed pursuant to section 1121(a) of title 11 of the United States Code and confirmed by an order of the United States Bankruptcy Court for the District of Delaware entered on February 6, 2006, which confirmation order was affirmed by an order of the United States District Court for the District of Delaware entered on May 11, 2006 (the “ Plan ”), or (y) that is approved by a majority of the Incumbent Directors, (2) any acquisition of Voting Stock of the Company by the Company or any Subsidiary, (3) any acquisition of Voting Stock of the Company by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary (other than any voluntary employee beneficiary association established in connection with the Plan), and (4) any acquisition of Voting Stock of the Company by any Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 1(a)(iii) below;

(B) if any Person acquires beneficial ownership of 35% or more of combined voting power of the then-outstanding Voting Stock of the Company as a result of a transaction described in clause (A)(1) of Section 1(a)(i) and such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of the Company representing 1% or more of the then-outstanding Voting Stock of the Company, other than in an acquisition directly from the Company pursuant to the Plan, in an acquisition directly from the Company in a transaction that is approved by a majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Stock are treated equally, such subsequent acquisition shall be deemed to constitute a Change in Control;

(C) a Change in Control will not be deemed to have occurred if a Person acquires beneficial ownership of 35% or more of the Voting Stock of the Company as a result of a reduction in the number of shares of Voting Stock of the Company outstanding unless and until such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of the Company representing 1% or more of the then-outstanding Voting Stock of the Company, other than in an acquisition directly from the Company pursuant to the Plan, in an acquisition directly from the Company in a transaction that is approved by a majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Stock are treated equally; and

(D) if at least a majority of the Incumbent Directors determine in good faith that a Person has acquired beneficial ownership of 35% or more of the Voting Stock of the Company inadvertently, and such Person divests as promptly as practicable a sufficient number of shares so that such Person beneficially owns less than 35% of the Voting Stock of the Company, then no Change in Control shall have occurred as a result of such Person’s acquisition; or

(ii) a majority of the Directors are not Incumbent Directors; or

(iii) the consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another corporation or other entity, or other transaction (each, a “ Business Combination ”), unless, in each case, immediately following such Business Combination (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Stock of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination (including without limitation an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from such Business Combination, any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from such Business Combination (other than any voluntary employee beneficiary association established in connection with the Plan) or any Person that immediately prior to such Business Combination owns, directly or indirectly, 35% or more of the Voting Stock of the Company so long as such Person does not at such time own, directly or indirectly, more than 1% of the securities of the other corporation or other entity involved in such Business Combination to be converted into or exchanged for shares of Voting Stock of the entity resulting from such Business Combination pursuant to such Business Combination)) beneficially owns, directly or indirectly, 35% or more of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination, and (C) at least a majority of the members of the Board of Directors of the entity resulting from such Business Combination were Incumbent Directors at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or

(iv) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 1(a)(iii).

(v) For purposes of this Section 1(a) and as used elsewhere in this Agreement, the following terms shall have the following meanings:

(A) “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

(B) “ Incumbent Directors ” means the individuals who, as of the date hereof, are Directors of the Company and any individual becoming a Director subsequent to the date hereof whose election, nomination for election by the Company’s stockholders, or appointment was approved by a vote of at least two-thirds of the then Incumbent Directors (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination); provided , however , that an individual shall not be an Incumbent Director if such individual’s election or appointment to the Board occurs as a result of an actual or threatened election contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.

(C) “ Subsidiary ” means an entity in which the Company directly or indirectly beneficially owns 50% or more of the outstanding Voting Stock.

(D) “ Voting Stock ” means securities entitled to vote generally in the election of directors (or similar governing bodies).

(b) “ Claim ” means (i) any threatened, asserted, pending or completed claim, demand, action, suit or proceeding, whether civil, criminal, administrative, arbitrative, investigative or other, whether made pursuant to federal, state or other law and whether or not Indemnitee is a party thereto; (ii) any threatened, pending or completed inquiry or investigation, whether formal or informal, whether made, instituted or conducted by the Company or any other person, including without limitation any federal, state or other governmental entity, and whether or not Indemnitee is the subject of such inquiry or investigation, that Indemnitee determines might lead to the institution of any such claim, demand, action, suit or proceeding; or (iii) any threatened, asserted, pending or completed appeal in connection with any such claim, demand, action, suit or proceeding.

(c) “ Controlled Affiliate ” means any corporation, limited liability company, partnership, joint venture, trust or other entity or enterprise, whether or not for profit, that is directly or indirectly controlled by the Company. For purposes of this definition, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of an entity or enterprise, whether through the ownership of voting securities, through other voting rights, by contract or otherwise; provided that direct or indirect beneficial ownership of capital stock or other interests in an entity or enterprise entitling the holder to cast 10% or more of the total number of votes generally entitled to be cast in the election of directors (or persons performing comparable functions) of such entity or enterprise shall be deemed to constitute control for purposes of this definition.

(d) “ Disinterested Director ” means a director of the Company who is not and was not a party to the Claim in respect of which indemnification is sought by Indemnitee.

(e) “ Expenses ” means attorneys’ and experts’ fees and expenses, including without limitation retainers, and all other costs and expenses paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend, be a witness in or participate in (including on appeal), any Claim, including without limitation court costs, transcript costs, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and the premium, security for and other costs relating to any costs bond, supersedeas bond or other appeal bond or its equivalent.

sentence, or (iii) Indemnitee’s status as a current or former director, officer, employee or agent of the Company or as a current or former director, officer, employee, member, manager, trustee or agent of the Company or any other entity or enterprise referred to in clause (i) of this sentence or any actual, alleged or suspected act or failure to act by Indemnitee in connection with any obligation or restriction imposed upon Indemnitee by reason of such status. In addition to any service at the actual request of the Company, for purposes of this Agreement, Indemnitee shall be deemed to be serving or to have served at the request of the Company as a director, officer, employee, member, manager, trustee or agent of another entity or enterprise if Indemnitee is or was serving as a director, officer, employee, member, manager, trustee or agent of such entity or enterprise and (i) such entity or enterprise is or at the time of such service was a Controlled Affiliate, (ii) such entity or enterprise is or at the time of such service was an employee benefit plan (or related trust) sponsored or maintained by the Company or a Controlled Affiliate (including any voluntary employee beneficiary association established in connection with the Plan), or (iii) the Company or a Controlled Affiliate directly or indirectly caused or authorized Indemnitee to be nominated, elected, appointed, designated, employed, engaged or selected to serve in such capacity.

(g) “ Indemnifiable Losses ” means any and all Losses relating to, arising out of or resulting from any Indemnifiable Claim.

(h) “ Independent Counsel ” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company (or any Subsidiary) or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other named (or, as to a threatened matter, reasonably likely to be named) party to the Indemnifiable Claim giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

(i) “ Losses ” means any and all Expenses, damages, losses, liabilities, judgments, fines, taxes, penalties (whether civil, criminal or other) and amounts paid in settlement, including without limitation all interest, assessments and other charges paid or payable in connection with or in respect of any of the foregoing.

2. Indemnification Obligation . Subject to Section 7, the Company shall indemnify, defend and hold harmless Indemnitee, to the fullest extent permitted or required by the laws of the State of Delaware in effect on the date hereof or as such laws may from time to time hereafter be amended to increase the scope of such permitted indemnification, against any and all Indemnifiable Claims and Indemnifiable Losses; provided , however , that, except as provided in Sections 4 and 20, Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with any Claim initiated by Indemnitee against the Company or any director or officer of the Company unless the Company has joined in or consented to the initiation of such Claim.

3. Advancement of Expenses . Indemnitee shall have the right to advancement by the Company prior to the final disposition of any Indemnifiable Claim of any and all Expenses relating to, arising out of or resulting from any Indemnifiable Claim paid or incurred by Indemnitee or which Indemnitee determines are reasonably likely to be paid or incurred by Indemnitee. Indemnitee’s right to such advancement is not subject to the satisfaction of any standard of conduct. Without limiting the generality or effect of the foregoing, within five business days after any request by Indemnitee (which request may be made at any time and from time to time as Indemnitee determines), the Company shall, in accordance with such request (but without duplication), (a) pay such Expenses on behalf of Indemnitee, (b) advance to Indemnitee funds in an amount sufficient to pay such Expenses, or (c) reimburse Indemnitee for such Expenses. Indemnitee hereby undertakes to repay, without interest, any amounts actually paid, advanced or reimbursed by the Company in respect of Expenses relating to, arising out of or resulting from any Indemnifiable Claim in respect of which it shall have been determined, following the final disposition of such Indemnifiable Claim and in accordance with Section 7, that Indemnitee is not entitled to indemnification hereunder. Indemnitee shall not be required to execute and deliver to the Company any further undertaking in connection with any such payment, advancement or reimbursement. The Company acknowledges that Indemnitee’s undertaking set forth above shall not be secured and hereby accepts such undertaking without reference to Indemnitee’s ability to repay the Expenses.

4. Indemnification for Additional Expenses . Without limiting the generality or effect of the foregoing, the Company shall indemnify and hold harmless Indemnitee against and, if requested by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within five business days of such request, any and all Expenses paid or incurred by Indemnitee or which Indemnitee determines are reasonably likely to be paid or incurred by Indemnitee in connection with any Claim made, instituted or conducted by Indemnitee for (a) indemnification or reimbursement or advance payment of Expenses by the Company under any provision of this Agreement, or under any other agreement or provision of the Constituent Documents now or hereafter in effect relating to Indemnifiable Claims, and/or (b) recovery under any directors’ and officers’ liability insurance policies maintained by the Company, regardless in each case of whether Indemnitee ultimately is determined to be entitled to such indemnification, reimbursement, advance or insurance recovery, as the case may be; provided , however , that Indemnitee shall return, without interest, any such advance of Expenses (or portion thereof) which remains unspent at the final disposition of the Claim to which the advance related.

5. Partial Indemnity . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Indemnifiable Loss, but not for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

applicable policies. The Company shall provide to Indemnitee a copy of such notice delivered to the applicable insurers, and copies of all subsequent correspondence between the Company and such insurers regarding the Indemnifiable Claim or Indemnifiable Loss, in each case substantially concurrently with the delivery or receipt thereof by the Company. The failure by Indemnitee to timely notify the Company of any Indemnifiable Claim or Indemnifiable Loss shall not relieve the Company from any liability hereunder unless, and only to the extent that, the Company did not otherwise learn of such Indemnifiable Claim or Indemnifiable Loss and such failure results in forfeiture by the Company of substantial defenses, rights or insurance coverage.

7. Determination of Right to Indemnification .

(a) To the extent that Indemnitee shall have been successful on the merits or otherwise in defense of any Indemnifiable Claim or any portion thereof or in defense of any issue or matter therein, including without limitation dismissal without prejudice, Indemnitee shall be indemnified against all Indemnifiable Losses relating to, arising out of or resulting from such Indemnifiable Claim in accordance with Section 2 and no Standard of Conduct Determination (as defined in Section 7(b)) shall be required.

(b) To the extent that the provisions of Section 7(a) are inapplicable to an Indemnifiable Claim that shall have been finally disposed of, any determination of whether Indemnitee has satisfied any applicable standard of conduct under Delaware law that is a legally required condition precedent to indemnification of Indemnitee hereunder against Indemnifiable Losses relating to, arising out of or resulting from such Indemnifiable Claim (a “ Standard of Conduct Determination ”) shall be made as follows: (i) if a Change in Control shall not have occurred, or if a Change in Control shall have occurred but Indemnitee shall have requested that the Standard of Conduct Determination be made pursuant to this clause (i), (A) by a majority vote of the Disinterested Directors, even if less than a quorum of the Board, (B) if such Disinterested Directors so direct, by a majority vote of a committee of Disinterested Directors designated by a majority vote of all Disinterested Directors, or (C) if there are no such Disinterested Directors, by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to Indemnitee; and (ii) if a Change in Control shall have occurred and Indemnitee shall not have requested that the Standard of Conduct Determination be made pursuant to clause (i), by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to Indemnitee. Indemnitee will cooperate with the person or persons making such Standard of Conduct Determination, including without limitation providing to such person or persons, upon reasonable advance request, any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. The Company shall indemnify and hold harmless Indemnitee against and, if requested by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within five business days of such request, any and all costs and expenses (including without limitation attorneys’ and experts’ fees and expenses) incurred by Indemnitee in so cooperating with the person or persons making such Standard of Conduct Determination.

(A) receipt by the Company of written notice from Indemnitee advising the Company of the final disposition of the applicable Indemnifiable Claim (the date of such receipt being the “ Notification Date ”) and (B) the selection of an Independent Counsel, if such determination is to be made by Independent Counsel, that is permitted under the provisions of Section 7(e) to make such determination and (ii) Indemnitee shall have fulfilled his/her obligations set forth in the second sentence of Section 7(b), then Indemnitee shall be deemed to have satisfied the applicable standard of conduct; provided that such 30-day period may be extended for a reasonable time, not to exceed an additional 30 days, if the person or persons making such determination in good faith requires such additional time for the obtaining or evaluation or documentation and/or information relating thereto.

(d) If (i) Indemnitee shall be entitled to indemnification hereunder against any Indemnifiable Losses pursuant to Section 7(a), (ii) no determination of whether Indemnitee has satisfied any applicable standard of conduct under Delaware law is a legally required condition precedent to indemnification of Indemnitee hereunder against any Indemnifiable Losses, or (iii) Indemnitee has been determined or deemed pursuant to Section 7(b) or (c) to have satisfied any applicable standard of conduct under Delaware law which is a legally required condition precedent to indemnification of Indemnitee hereunder against any Indemnifiable Losses, then the Company shall pay to Indemnitee, within five business days after the later of (x) the Notification Date in respect of the Indemnifiable Claim or portion thereof to which such Indemnifiable Losses are related, out of which such Indemnifiable Losses arose or from which such Indemnifiable Losses resulted and (y) the earliest date on which the applicable criterion specified in clause (i), (ii) or (iii) above shall have been satisfied, an amount equal to the amount of such Indemnifiable Losses.

(e) If a Standard of Conduct Determination is to be made by Independent Counsel pursuant to Section 7(b), the Independent Counsel shall be selected by Indemnitee, and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. The Company may, within five business days after receiving written notice of selection from the other, deliver to Indemnitee a written objection to such selection; provided , however , that such objection may be asserted only on the ground that the Independent Counsel so selected does not satisfy the criteria set forth in the definition of “Independent Counsel” in Section 1(h), and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person or firm so selected shall act as Independent Counsel. If such written objection is properly and timely made and substantiated, (i) the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit and (ii) Indemnitee may, at his or her option, select an alternative Independent Counsel and give written notice to the Company advising the Company of the identity of the alternative Independent Counsel so selected, in which case the provisions of the immediately preceding sentence and clause (i) of this sentence shall apply to such subsequent selection and notice. If applicable, the provisions of clause (ii) of the immediately preceding sentence shall apply to successive alternative selections. If no Independent Counsel that is permitted under the foregoing provisions of this Section 7(e) to make the Standard of Conduct Determination shall have been selected within 30 days after Indemnitee gives its initial notice pursuant to the first sentence of this Section 7(e), either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware for resolution of any objection which shall have been made by the Company to Indemnitee’s selection of Independent Counsel and/or for the appointment as

Independent Counsel of a person or firm selected by the Court or by the Company as the Court shall designate, and the person or firm with respect to whom all objections are so resolved or the person or firm so appointed will act as Independent Counsel. In all events, the Company shall pay all of the reasonable fees and expenses of the Independent Counsel incurred in connection with the Independent Counsel’s determination pursuant to Section 7(b).

8. Presumption of Entitlement . In making any Standard of Conduct Determination, the person or persons making such determination shall presume that Indemnitee has satisfied the applicable standard of conduct, and the Company may overcome such presumption only by its adducing clear and convincing evidence to the contrary. Indemnitee shall be fully protected, and a Standard of Conduct Determination may not be adverse to Indemnitee, to the extent Indemnitee relied in good faith upon the records of the Company or upon such information, opinions, reports or statements presented to the Company by any of the Company’s officers or employees, or committees of the Board, or by any other person as to matters Indemnitee believed were within such other person’s professional or expert competence and who had been selected with reasonable care by or on behalf of the Company, the Board or a committee of the Board. Any Standard of Conduct Determination that is adverse to Indemnitee may be challenged by the Indemnitee in the Court of Chancery of the State of Delaware. No determination by the Company (including without limitation by its directors or any Independent Counsel) that Indemnitee has not satisfied any applicable standard of conduct shall be a defense to any Claim by Indemnitee for indemnification or reimbursement or advance payment of Expenses by the Company hereunder or create a presumption that Indemnitee has not met any applicable standard of conduct.

9. No Other Presumptions .

(a) For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, will not create a presumption that Indemnitee did not meet any applicable standard of conduct or that indemnification hereunder is otherwise not permitted.

(b) For purposes of this Agreement, the knowledge or actions, or failures to act, of another person may not be imputed, attributed or charged to Indemnitee in connection with a determination that Indemnitee has not met any applicable standard of conduct or that indemnification hereunder is otherwise not permitted.

10. Non-Exclusivity . The rights of Indemnitee hereunder will be in addition to any other rights Indemnitee may have under the Constituent Documents, or the substantive laws of the Company’s jurisdiction of incorporation, any other contract or otherwise (collectively, “ Other Indemnity Provisions ”); provided , however , that (a) to the extent that Indemnitee otherwise would have any greater right to indemnification under any Other Indemnity Provision, Indemnitee will be deemed to have such greater right hereunder and (b) to the extent that any change is made to any Other Indemnity Provision which permits any greater right to indemnification than that provided under this Agreement as of the date hereof, Indemnitee will be deemed to have such greater right hereunder. The Company will not adopt any amendment to any of the Constituent Documents the effect of which would be to deny, diminish or encumber Indemnitee’s right to indemnification under this Agreement or any Other Indemnity Provision.

11. Liability Insurance and Funding . For the duration of Indemnitee’s service as a director of the Company, and thereafter for so long as Indemnitee shall be subject to any pending or possible Indemnifiable Claim, the Company shall use commercially reasonable efforts (taking into account the scope and amount of coverage available relative to the cost thereof) to cause to be maintained in effect with an insurance carrier having an AM Best rating of not less than A-VI policies of directors’ and officers’ liability insurance providing coverage for directors and/or officers of the Company that is at least substantially comparable in scope and amount to that provided by the Company’s current policies of directors’ and officers’ liability insurance. The Company shall provide Indemnitee with a copy of all directors’ and officers’ liability insurance applications, binders, policies, declarations, endorsements and other related materials, and shall provide Indemnitee with a reasonable opportunity to review and comment on the same. Without limiting the generality or effect of the two immediately preceding sentences, the Company shall not discontinue or significantly reduce the scope or amount of coverage from one policy period to the next (i) without the prior approval thereof by a majority vote of the Incumbent Directors, even if less than a quorum, or (ii) if at the time that any such discontinuation or significant reduction in the scope or amount of coverage is proposed there are no Incumbent Directors, without the prior written consent of Indemnitee (which consent shall not be unreasonably withheld or delayed). In all policies of directors’ and officers’ liability insurance obtained by the Company, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits, subject to the same limitations, as are accorded to the Company’s directors and officers most favorably insured by such policy. The Company may, but shall not be required to, create a trust fund, grant a security interest or use other means, including without limitation a letter of credit, to ensure the payment of such amounts as may be necessary to satisfy its obligations to indemnify and advance expenses pursuant to this Agreement.

12. Subrogation . In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the related rights of recovery of Indemnitee against other persons or entities (other than Indemnitee’s successors), including without limitation any entity or enterprise referred to in clause (i) of the definition of “Indemnifiable Claim” in Section 1(f). Indemnitee shall execute all papers reasonably required to evidence such rights (all of Indemnitee’s reasonable Expenses, including without limitation attorneys’ fees and charges, related thereto to be reimbursed by or, at the option of Indemnitee, advanced by the Company).

13. No Duplication of Payments . The Company shall not be liable under this Agreement to make any payment to Indemnitee in respect of any Indemnifiable Losses to the extent Indemnitee has otherwise actually received payment (net of Expenses incurred in connection therewith) under any insurance policy, the Constituent Documents and Other Indemnity Provisions or otherwise (including without limitation from any entity or enterprise referred to in clause (i) of the definition of “Indemnifiable Claim” in Section 1(f)) in respect of such Indemnifiable Losses otherwise indemnifiable hereunder.

actual or potential conflict, (b) the named parties in any such Indemnifiable Claim (including without limitation any impleaded parties) include both the Company and Indemnitee and Indemnitee shall conclude that there may be one or more legal defenses available to him or her that are different from or in addition to those available to the Company, or (c) any such representation by such counsel would be precluded under the applicable standards of professional conduct then prevailing, then Indemnitee shall be entitled to retain separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any particular Indemnifiable Claim) at the Company’s expense. If the Company assumes the defense of any Indemnifiable Claim and Indemnitee is not entitled to retain separate counsel at the Company’s expense pursuant to the immediately preceding sentence, Indemnitee shall be entitled to retain counsel at Indemnitee’s own expense and participate therein. If the Company does not assume the defense of an Indemnifiable Claim, the Company shall be entitled to participate therein. The Company shall not be liable to Indemnitee under this Agreement for any amounts paid in settlement of any threatened or pending Indemnifiable Claim effected without the Company’s prior written consent. The Company shall not, without the prior written consent of the Indemnitee, effect any settlement of any threatened or pending Indemnifiable Claim to which the Indemnitee is, or could have been, a party unless (i) such settlement solely involves the payment of money (and such payment is not a fine) and includes a complete and unconditional release of the Indemnitee from all liability on any claims that are the subject matter of such Indemnifiable Claim without an admission of liability or wrongdoing on the part of Indemnitee and (ii) the Company shall have agreed Indemnitee is entitled to indemnification hereunder in respect of such Indemnifiable Claim. Neither the Company nor Indemnitee shall unreasonably withhold its consent to any proposed settlement; provided that Indemnitee may withhold consent to any settlement that does not provide a complete and unconditional release of Indemnitee.

15. Successors and Binding Agreement . (a) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory to Indemnitee and his or her counsel, expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no such succession had taken place. This Agreement shall be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any person acquiring directly or indirectly all or substantially all of the business or assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor will thereafter be deemed the “ Company ” for purposes of this Agreement), but shall not otherwise be assignable or delegatable by the Company.

(b) This Agreement shall inure to the benefit of and be enforceable by the Indemnitee’s personal or legal representatives, executors, administrators, heirs, distributees, legatees and other successors.

(c) This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Sections 15(a) and 15(b). Without limiting the generality or effect of the foregoing, Indemnitee’s right to receive payments hereunder shall not be assignable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by the Indemnitee’s will or by the laws of descent and distribution, and, in the event of

any attempted assignment or transfer contrary to this Section 15(c), the Company shall have no liability to pay any amount so attempted to be assigned or transferred.

(d) This Agreement shall continue in full force and effect after Indemnitee has ceased to be a director of the Company.

16. Notices . For all purposes of this Agreement, all communications, including without limitation notices, consents, requests or approvals, required or permitted to be given hereunder, shall be in writing and shall be deemed to have been duly given when hand delivered or dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or five business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid or one business day after having been sent for next-day delivery by a nationally recognized overnight courier service, addressed to either the Company (to the attention of the Secretary of the Company) or to Indemnitee, as the case may be, at the applicable address shown on the signature page hereto, or to such other address as such party may have furnished to the other in writing and in accordance herewith, except that notices of changes of address will be effective only upon receipt.

17. Governing Law . The validity, interpretation, construction and performance of this Agreement shall be governed by and construed in accordance with the substantive laws of the State of Delaware, without giving effect to the principles of conflict of laws of such State. The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the Chancery Court of the State of Delaware for all purposes in connection with any action or proceeding which arises out of, or relates to, this Agreement and agree that any action instituted under this Agreement shall be brought only in the Chancery Court of the State of Delaware.

18. Validity . If any provision of this Agreement or the application of any provision hereof to any person or circumstance is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to any other person or circumstance shall not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be reformed to the extent, and only to the extent, necessary to make it enforceable, valid or legal. In the event that any court or other adjudicative body shall decline to reform any provision of this Agreement held to be invalid, unenforceable or otherwise illegal as contemplated by the immediately preceding sentence, the parties hereto shall take all such action as may be necessary or appropriate to replace the provision so held to be invalid, unenforceable or otherwise illegal with one or more alternative provisions that effectuate the purpose and intent of the original provisions of this Agreement as fully as possible without being invalid, unenforceable or otherwise illegal.

19. Miscellaneous . No provision of this Agreement may be waived, modified or discharged unless such waiver, modification or discharge is agreed to in writing signed by Indemnitee and the Company. No waiver by either party hereto at any time of any breach by the other party hereto, or compliance with any condition or provision of this Agreement to be performed by such other party, shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party that are not set forth expressly in this Agreement.

20. Legal Fees and Expenses . It is the intent of the Company that Indemnitee not be required to incur legal fees and or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to Indemnitee hereunder. Accordingly, without limiting the generality or effect of any other provision hereof, if it should appear to Indemnitee that the Company has failed to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, the Company irrevocably authorizes the Indemnitee from time to time to retain counsel of Indemnitee’s choice (other than the Company’s in-house counsel), at the expense of the Company as hereafter provided, to advise and represent Indemnitee in connection with any such interpretation, enforcement or defense, including without limitation the initiation or defense of any litigation or other legal action, whether by or against the Company or any director, officer, stockholder or other person affiliated with the Company, in any jurisdiction. Notwithstanding any existing or prior attorney-client relationship between the Company and such counsel, the Company irrevocably consents to Indemnitee’s entering into an attorney-client relationship with such counsel, and in that connection the Company and Indemnitee agree that a confidential relationship shall exist between Indemnitee and such counsel. Without respect to whether Indemnitee prevails, in whole or in part, in connection with any of the foregoing, the Company will pay and be solely financially responsible for any and all attorneys’ and related fees and expenses incurred by Indemnitee in connection with any of the foregoing.

21. Certain Interpretive Matters . Unless the context of this Agreement otherwise requires, (a) “it” or “its” or words of either gender include both genders, (b) words using the singular or plural number also include the plural or singular number, respectively, (c) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement, (d) the term “Section” refers to the specified Section of this Agreement, and (e) the word “or” is disjunctive but not exclusive. Whenever this Agreement refers to a number of days, such number will refer to calendar days unless business days are specified and whenever action must be taken (including without limitation the giving of notice or the delivery of documents) under this Agreement during a certain period of time or by a particular date that ends or occurs on a non-business day, then such period or date will be extended until the immediately following business day. As used herein, “business day” means any day other than Saturday, Sunday or a United States federal holiday. All terms defined in this Agreement will have such defined meanings when used in any document made or delivered pursuant hereto unless otherwise defined. The Section headings contained in this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

22. Counterparts . This Agreement may be executed in two counterparts, each of which will be deemed to be an original but both of which together shall constitute one and the same agreement.

[Signatures Appear On Following Page]

IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly authorized representative to execute this Agreement as of the date first above written.


		KAISER ALUMINUM CORPORATION
		27422 Portola Parkway, Suite 350
		Foothill Ranch, California 92610-2831

		By:

		Name:
		Title:

		[INDEMNITEE] [Address]

		[Indemnitee]

Exhibit 10.9

FORM OF OFFICER INDEMNIFICATION AGREEMENT

This Officer Indemnification Agreement, dated as of July 6, 2006 (this “ Agreement ”), is made by and between Kaiser Aluminum Corporation, a Delaware corporation (the “ Company ”), and [___] (“ Indemnitee ”).

RECITALS

A. Section 141 of the General Corporation Law of the State of Delaware (the “ DGCL ”) provides that the business and affairs of a corporation shall be managed by or under the direction of its board of directors.

B. Pursuant to Sections 141 and 142 of the DGCL, significant authority with respect to the management of the Company has been delegated to the officers of the Company.

C. By virtue of the managerial prerogatives vested in the officers of a Delaware corporation, officers act as fiduciaries of the corporation and its stockholders.

D. Thus, it is critically important to the Company and its stockholders that the Company be able to attract and retain the most capable persons reasonably available to serve as officers of the Company.

E. In recognition of the need for corporations to be able to induce capable and responsible persons to accept positions in corporate management, Delaware law authorizes (and in some instances requires) corporations to indemnify their directors and officers, and further authorizes corporations to purchase and maintain insurance for the benefit of their directors and officers.

F. The Delaware courts have recognized that indemnification by a corporation serves the dual policies of (1) allowing corporate officials to resist unjustified lawsuits, secure in the knowledge that, if vindicated, the corporation will bear the expense of litigation and (2) encouraging capable women and men to serve as corporate directors and officers, secure in the knowledge that the corporation will absorb the costs of defending their honesty and integrity.

G. The indemnification of directors and officers by a corporation serves as an important supplement to directors’ and officers’ liability insurance and as a replacement for such insurance in circumstances where such insurance is unavailable.

H. The number of lawsuits challenging the judgment and actions of officers of Delaware corporations, the costs of defending those lawsuits and the threat to officers’ personal assets have all materially increased over the past several years, chilling the willingness of capable women and men to undertake the responsibilities imposed on corporate officers.

I. Recent federal legislation and rules adopted by the Securities and Exchange Commission and the national securities exchanges and the National Association of Securities Dealers, Inc. have imposed additional disclosure and corporate governance obligations on directors and officers of public companies and have exposed such directors and officers to new and substantially broadened civil liabilities.

J. These legislative and regulatory initiatives have also exposed officers of public companies to a significantly greater risk of criminal proceedings, with attendant defense costs and potential criminal fines and penalties.

K. Under Delaware law, an officer’s right to be reimbursed for the costs of defense of criminal actions, whether such claims are asserted under state or federal law, does not depend upon the merits of the claims asserted against the officer and is separate and distinct from any right to indemnification the officer may be able to establish, and indemnification of the officer against criminal fines and penalties is permitted if the officer satisfies the applicable standard of conduct.

L. Indemnitee is an officer of the Company and does not regard the protection afforded to him/her by Delaware law and the Company’s certificate of incorporation and bylaws (collectively, the “ Constituent Documents ”) as adequate, and his/her willingness to serve in such capacity is predicated, in substantial part, upon (1) the Company’s willingness to provide protection to him/her pursuant to express contract rights providing for the Company to indemnify him/her in accordance with the principles reflected above, to the fullest extent permitted by Delaware law, and (2) the other undertakings set forth in this Agreement.

M. Therefore, in recognition of the need to provide Indemnitee with substantial protection against personal liability, in order to procure Indemnitee’s continued service as an officer of the Company and to enhance Indemnitee’s ability to serve the Company in an effective manner, and in order to provide such protection pursuant to express contract rights (intended to be enforceable irrespective of, among other things, any amendment to the Constituent Documents, any change in the composition of the Company’s Board of Directors (the “ Board ”) or any change-in-control or business combination transaction relating to the Company), the Company wishes to provide in this Agreement for (1) the indemnification of and the advancement of Expenses (as defined in Section 1(e)) to Indemnitee as set forth in this Agreement as a supplement to, and in furtherance of, the indemnification provided by the Constituent Documents or resolutions of the Board and (2) the continued coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance policies.

N. In light of the factors referred to in the preceding recitals, it is the Company’s intention and desire that the provisions of this Agreement be construed liberally, subject to their express terms, to maximize the protections to be provided to Indemnitee hereunder.

AGREEMENT

1. Certain Definitions . In addition to terms defined elsewhere herein, the following terms have the following meanings when used in this Agreement with initial capital letters:

(a) “ Change in Control ” means the occurrence on or after the date of this Agreement of any of the following events:

Stock of the Company, then no Change in Control shall have occurred as a result of such Person’s acquisition; or

(ii) a majority of the Directors are not Incumbent Directors; or

(v) For purposes of this Section 1(a) and as used elsewhere in this Agreement, the following terms shall have the following meanings:

(A) “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.

(C) “ Subsidiary ” means an entity in which the Company directly or indirectly beneficially owns 50% or more of the outstanding Voting Stock.

(D) “ Voting Stock ” means securities entitled to vote generally in the election of directors (or similar governing bodies).

(d) “ Disinterested Director ” means a director of the Company who is not and was not a party to the Claim in respect of which indemnification is sought by Indemnitee.

employee, member, manager, trustee or agent, (ii) any actual, alleged or suspected act or failure to act by Indemnitee in respect of any business, transaction, communication, filing, disclosure or other activity of the Company or any other entity or enterprise referred to in clause (i) of this sentence, or (iii) Indemnitee’s status as a current or former director, officer, employee or agent of the Company or as a current or former director, officer, employee, member, manager, trustee or agent of the Company or any other entity or enterprise referred to in clause (i) of this sentence or any actual, alleged or suspected act or failure to act by Indemnitee in connection with any obligation or restriction imposed upon Indemnitee by reason of such status. In addition to any service at the actual request of the Company, for purposes of this Agreement, Indemnitee shall be deemed to be serving or to have served at the request of the Company as a director, officer, employee, member, manager, trustee or agent of another entity or enterprise if Indemnitee is or was serving as a director, officer, employee, member, manager, trustee or agent of such entity or enterprise and (i) such entity or enterprise is or at the time of such service was a Controlled Affiliate, (ii) such entity or enterprise is or at the time of such service was an employee benefit plan (or related trust) sponsored or maintained by the Company or a Controlled Affiliate (including any voluntary employee beneficiary association established in connection with the Plan), or (iii) the Company or a Controlled Affiliate directly or indirectly caused or authorized Indemnitee to be nominated, elected, appointed, designated, employed, engaged or selected to serve in such capacity.

(g) “ Indemnifiable Losses ” means any and all Losses relating to, arising out of or resulting from any Indemnifiable Claim.

officer of the Company unless the Company has joined in or consented to the initiation of such Claim.

under which coverage for such Indemnifiable Claim or Indemnifiable Loss is potentially available, the Company shall give prompt written notice of such Indemnifiable Claim or Indemnifiable Loss to the applicable insurers in accordance with the procedures set forth in the applicable policies. The Company shall provide to Indemnitee a copy of such notice delivered to the applicable insurers, and copies of all subsequent correspondence between the Company and such insurers regarding the Indemnifiable Claim or Indemnifiable Loss, in each case substantially concurrently with the delivery or receipt thereof by the Company. The failure by Indemnitee to timely notify the Company of any Indemnifiable Claim or Indemnifiable Loss shall not relieve the Company from any liability hereunder unless, and only to the extent that, the Company did not otherwise learn of such Indemnifiable Claim or Indemnifiable Loss and such failure results in forfeiture by the Company of substantial defenses, rights or insurance coverage.

7. Determination of Right to Indemnification .

(c) The Company shall use its reasonable best efforts to cause any Standard of Conduct Determination required under Section 7(b) to be made as promptly as practicable. If (i) the person or persons empowered or selected under Section 7 to make the Standard of Conduct Determination shall not have made a determination within 30 days after the later of (A) receipt by the Company of written notice from Indemnitee advising the Company of the final disposition of the applicable Indemnifiable Claim (the date of such receipt being the “ Notification Date ”) and (B) the selection of an Independent Counsel, if such determination is to be made by Independent Counsel, that is permitted under the provisions of Section 7(e) to make such determination and (ii) Indemnitee shall have fulfilled his/her obligations set forth in the second sentence of Section 7(b), then Indemnitee shall be deemed to have satisfied the applicable standard of conduct; provided that such 30-day period may be extended for a reasonable time, not to exceed an additional 30 days, if the person or persons making such determination in good faith requires such additional time for the obtaining or evaluation or documentation and/or information relating thereto.

have been selected within 30 days after Indemnitee gives its initial notice pursuant to the first sentence of this Section 7(e), either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware for resolution of any objection which shall have been made by the Company to Indemnitee’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person or firm selected by the Court or by the Company as the Court shall designate, and the person or firm with respect to whom all objections are so resolved or the person or firm so appointed will act as Independent Counsel. In all events, the Company shall pay all of the reasonable fees and expenses of the Independent Counsel incurred in connection with the Independent Counsel’s determination pursuant to Section 7(b).

9. No Other Presumptions .

11. Liability Insurance and Funding . For the duration of Indemnitee’s service as an officer of the Company, and thereafter for so long as Indemnitee shall be subject to any pending or possible Indemnifiable Claim, the Company shall use commercially reasonable efforts (taking

into account the scope and amount of coverage available relative to the cost thereof) to cause to be maintained in effect with an insurance carrier having an AM Best rating of not less than A-VI policies of directors’ and officers’ liability insurance providing coverage for directors and/or officers of the Company that is at least substantially comparable in scope and amount to that provided by the Company’s current policies of directors’ and officers’ liability insurance. The Company shall provide Indemnitee with a copy of all directors’ and officers’ liability insurance applications, binders, policies, declarations, endorsements and other related materials, and shall provide Indemnitee with a reasonable opportunity to review and comment on the same. Without limiting the generality or effect of the two immediately preceding sentences, the Company shall not discontinue or significantly reduce the scope or amount of coverage from one policy period to the next (i) without the prior approval thereof by a majority vote of the Incumbent Directors, even if less than a quorum, or (ii) if at the time that any such discontinuation or significant reduction in the scope or amount of coverage is proposed there are no Incumbent Directors, without the prior written consent of Indemnitee (which consent shall not be unreasonably withheld or delayed). In all policies of directors’ and officers’ liability insurance obtained by the Company, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits, subject to the same limitations, as are accorded to the Company’s directors and officers most favorably insured by such policy. The Company may, but shall not be required to, create a trust fund, grant a security interest or use other means, including without limitation a letter of credit, to ensure the payment of such amounts as may be necessary to satisfy its obligations to indemnify and advance expenses pursuant to this Agreement.

that are different from or in addition to those available to the Company, or (c) any such representation by such counsel would be precluded under the applicable standards of professional conduct then prevailing, then Indemnitee shall be entitled to retain separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any particular Indemnifiable Claim) at the Company’s expense. If the Company assumes the defense of any Indemnifiable Claim and Indemnitee is not entitled to retain separate counsel at the Company’s expense pursuant to the immediately preceding sentence, Indemnitee shall be entitled to retain counsel at Indemnitee’s own expense and participate therein. If the Company does not assume the defense of an Indemnifiable Claim, the Company shall be entitled to participate therein. The Company shall not be liable to Indemnitee under this Agreement for any amounts paid in settlement of any threatened or pending Indemnifiable Claim effected without the Company’s prior written consent. The Company shall not, without the prior written consent of the Indemnitee, effect any settlement of any threatened or pending Indemnifiable Claim to which the Indemnitee is, or could have been, a party unless (i) such settlement solely involves the payment of money (and such payment is not a fine) and includes a complete and unconditional release of the Indemnitee from all liability on any claims that are the subject matter of such Indemnifiable Claim without an admission of liability or wrongdoing on the part of Indemnitee and (ii) the Company shall have agreed Indemnitee is entitled to indemnification hereunder in respect of such Indemnifiable Claim. Neither the Company nor Indemnitee shall unreasonably withhold its consent to any proposed settlement; provided that Indemnitee may withhold consent to any settlement that does not provide a complete and unconditional release of Indemnitee.

(d) This Agreement shall continue in full force and effect after Indemnitee has ceased to be an officer of the Company.

cost and expense thereof would substantially detract from the benefits intended to be extended to Indemnitee hereunder. Accordingly, without limiting the generality or effect of any other provision hereof, if it should appear to Indemnitee that the Company has failed to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, the Company irrevocably authorizes the Indemnitee from time to time to retain counsel of Indemnitee’s choice (other than the Company’s in-house counsel), at the expense of the Company as hereafter provided, to advise and represent Indemnitee in connection with any such interpretation, enforcement or defense, including without limitation the initiation or defense of any litigation or other legal action, whether by or against the Company or any director, officer, stockholder or other person affiliated with the Company, in any jurisdiction. Notwithstanding any existing or prior attorney-client relationship between the Company and such counsel, the Company irrevocably consents to Indemnitee’s entering into an attorney-client relationship with such counsel, and in that connection the Company and Indemnitee agree that a confidential relationship shall exist between Indemnitee and such counsel. Without respect to whether Indemnitee prevails, in whole or in part, in connection with any of the foregoing, the Company will pay and be solely financially responsible for any and all attorneys’ and related fees and expenses incurred by Indemnitee in connection with any of the foregoing.

22. Counterparts . This Agreement may be executed in two counterparts, each of which will be deemed to be an original but both of which together shall constitute one and the same agreement.

[Signatures Appear On Following Page]

IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly authorized representative to execute this Agreement as of the date first above written.


		KAISER ALUMINUM CORPORATION
		27422 Portola Parkway, Suite 350
		Foothill Ranch, California 92610-2831

		By:

				Name:
				Title:

		[INDEMNITEE]
		[Address]


		[Indemnitee]

Exhibit 10.10

FORM OF DIRECTOR AND OFFICER
INDEMNIFICATION AGREEMENT

This Director and Officer Indemnification Agreement, dated as of July 6, 2006 (this “ Agreement ”), is made by and between Kaiser Aluminum Corporation, a Delaware corporation (the “ Company ”), and [ ] (“ Indemnitee ”).

RECITALS

B. Pursuant to Sections 141 and 142 of the DGCL, significant authority with respect to the management of the Company has been delegated to the officers of the Company.

C. By virtue of the managerial prerogatives vested in the directors and officers of a Delaware corporation, directors and officers act as fiduciaries of the corporation and its stockholders.

D. Thus, it is critically important to the Company and its stockholders that the Company be able to attract and retain the most capable persons reasonably available to serve as directors and officers of the Company.

H. The number of lawsuits challenging the judgment and actions of directors and officers of Delaware corporations, the costs of defending those lawsuits and the threat to directors’ and officers’ personal assets have all materially increased over the past several years, chilling the willingness of capable women and men to undertake the responsibilities imposed on corporate directors and officers.

I. Recent federal legislation and rules adopted by the Securities and Exchange Commission and the national securities exchanges and the National Association of Securities

Dealers, Inc. have imposed additional disclosure and corporate governance obligations on directors and officers of public companies and have exposed such directors and officers to new and substantially broadened civil liabilities.

J. These legislative and regulatory initiatives have also exposed directors and officers of public companies to a significantly greater risk of criminal proceedings, with attendant defense costs and potential criminal fines and penalties.

K. Under Delaware law, a director’s and officer’s right to be reimbursed for the costs of defense of criminal actions, whether such claims are asserted under state or federal law, does not depend upon the merits of the claims asserted against the director or officer and is separate and distinct from any right to indemnification the director or officer may be able to establish, and indemnification of the director or officer against criminal fines and penalties is permitted if the director or officer satisfies the applicable standard of conduct.

L. Indemnitee is a director and officer of the Company and does not regard the protection afforded to him/her by Delaware law and the Company’s certificate of incorporation and bylaws (collectively, the “ Constituent Documents ”) as adequate, and his/her willingness to serve in such capacity is predicated, in substantial part, upon (1) the Company’s willingness to provide protection to him/her pursuant to express contract rights providing for the Company to indemnify him/her in accordance with the principles reflected above, to the fullest extent permitted by Delaware law, and (2) the other undertakings set forth in this Agreement.

M. Therefore, in recognition of the need to provide Indemnitee with substantial protection against personal liability, in order to procure Indemnitee’s continued service as a director and officer of the Company and to enhance Indemnitee’s ability to serve the Company in an effective manner, and in order to provide such protection pursuant to express contract rights (intended to be enforceable irrespective of, among other things, any amendment to the Constituent Documents, any change in the composition of the Company’s Board of Directors (the “ Board ”) or any change-in-control or business combination transaction relating to the Company), the Company wishes to provide in this Agreement for (1) the indemnification of and the advancement of Expenses (as defined in Section 1(e)) to Indemnitee as set forth in this Agreement as a supplement to, and in furtherance of, the indemnification provided by the Constituent Documents or resolutions of the Board and (2) the continued coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance policies.

AGREEMENT

1. Certain Definitions . In addition to terms defined elsewhere herein, the following terms have the following meanings when used in this Agreement with initial capital letters:

(a) “ Change in Control ” means the occurrence on or after the date of this Agreement of any of the following events:

Stock of the Company representing 1% or more of the then-outstanding Voting Stock of the Company, other than in an acquisition directly from the Company pursuant to the Plan, in an acquisition directly from the Company in a transaction that is approved by a majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Stock are treated equally; and

(ii) a majority of the Directors are not Incumbent Directors; or

(v) For purposes of this Section 1(a) and as used elsewhere in this Agreement, the following terms shall have the following meanings:

(A) “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

(C) “ Subsidiary ” means an entity in which the Company directly or indirectly beneficially owns 50% or more of the outstanding Voting Stock.

(D) “ Voting Stock ” means securities entitled to vote generally in the election of directors (or similar governing bodies).

(d) “ Disinterested Director ” means a director of the Company who is not and was not a party to the Claim in respect of which indemnification is sought by Indemnitee.

to investigate, defend, be a witness in or participate in (including on appeal), any Claim, including without limitation court costs, transcript costs, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and the premium, security for and other costs relating to any costs bond, supersedeas bond or other appeal bond or its equivalent.

(f) “ Indemnifiable Claim ” means any Claim based upon, arising out of or resulting from (i) any actual, alleged or suspected act or failure to act by Indemnitee in his or her capacity as a director, officer, employee or agent of the Company or as a director, officer, employee, member, manager, trustee or agent of any other corporation, limited liability company, partnership, joint venture, trust or other entity or enterprise, whether or not for profit, as to which Indemnitee is or was serving at the request of the Company as a director, officer, employee, member, manager, trustee or agent, (ii) any actual, alleged or suspected act or failure to act by Indemnitee in respect of any business, transaction, communication, filing, disclosure or other activity of the Company or any other entity or enterprise referred to in clause (i) of this sentence, or (iii) Indemnitee’s status as a current or former director, officer, employee or agent of the Company or as a current or former director, officer, employee, member, manager, trustee or agent of the Company or any other entity or enterprise referred to in clause (i) of this sentence or any actual, alleged or suspected act or failure to act by Indemnitee in connection with any obligation or restriction imposed upon Indemnitee by reason of such status. In addition to any service at the actual request of the Company, for purposes of this Agreement, Indemnitee shall be deemed to be serving or to have served at the request of the Company as a director, officer, employee, member, manager, trustee or agent of another entity or enterprise if Indemnitee is or was serving as a director, officer, employee, member, manager, trustee or agent of such entity or enterprise and (i) such entity or enterprise is or at the time of such service was a Controlled Affiliate, (ii) such entity or enterprise is or at the time of such service was an employee benefit plan (or related trust) sponsored or maintained by the Company or a Controlled Affiliate (including any voluntary employee beneficiary association established in connection with the Plan), or (iii) the Company or a Controlled Affiliate directly or indirectly caused or authorized Indemnitee to be nominated, elected, appointed, designated, employed, engaged or selected to serve in such capacity.

(g) “ Indemnifiable Losses ” means any and all Losses relating to, arising out of or resulting from any Indemnifiable Claim.

Indemnitee shall return, without interest, any such advance of Expenses (or portion thereof) which remains unspent at the final disposition of the Claim to which the advance related.

6. Procedure for Notification . To obtain indemnification under this Agreement in respect of an Indemnifiable Claim or Indemnifiable Loss, Indemnitee shall submit to the Company a written request therefor, including a brief description (based upon information then available to Indemnitee) of such Indemnifiable Claim or Indemnifiable Loss. If, at the time of the receipt of such request, the Company has directors’ and officers’ liability insurance in effect under which coverage for such Indemnifiable Claim or Indemnifiable Loss is potentially available, the Company shall give prompt written notice of such Indemnifiable Claim or Indemnifiable Loss to the applicable insurers in accordance with the procedures set forth in the applicable policies. The Company shall provide to Indemnitee a copy of such notice delivered to the applicable insurers, and copies of all subsequent correspondence between the Company and such insurers regarding the Indemnifiable Claim or Indemnifiable Loss, in each case substantially concurrently with the delivery or receipt thereof by the Company. The failure by Indemnitee to timely notify the Company of any Indemnifiable Claim or Indemnifiable Loss shall not relieve the Company from any liability hereunder unless, and only to the extent that, the Company did not otherwise learn of such Indemnifiable Claim or Indemnifiable Loss and such failure results in forfeiture by the Company of substantial defenses, rights or insurance coverage.

7. Determination of Right to Indemnification .

made pursuant to clause (i), by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to Indemnitee. Indemnitee will cooperate with the person or persons making such Standard of Conduct Determination, including without limitation providing to such person or persons, upon reasonable advance request, any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. The Company shall indemnify and hold harmless Indemnitee against and, if requested by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within five business days of such request, any and all costs and expenses (including without limitation attorneys’ and experts’ fees and expenses) incurred by Indemnitee in so cooperating with the person or persons making such Standard of Conduct Determination.

“Independent Counsel” in Section 1(h), and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person or firm so selected shall act as Independent Counsel. If such written objection is properly and timely made and substantiated, (i) the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit and (ii) Indemnitee may, at his or her option, select an alternative Independent Counsel and give written notice to the Company advising the Company of the identity of the alternative Independent Counsel so selected, in which case the provisions of the immediately preceding sentence and clause (i) of this sentence shall apply to such subsequent selection and notice. If applicable, the provisions of clause (ii) of the immediately preceding sentence shall apply to successive alternative selections. If no Independent Counsel that is permitted under the foregoing provisions of this Section 7(e) to make the Standard of Conduct Determination shall have been selected within 30 days after Indemnitee gives its initial notice pursuant to the first sentence of this Section 7(e), either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware for resolution of any objection which shall have been made by the Company to Indemnitee’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person or firm selected by the Court or by the Company as the Court shall designate, and the person or firm with respect to whom all objections are so resolved or the person or firm so appointed will act as Independent Counsel. In all events, the Company shall pay all of the reasonable fees and expenses of the Independent Counsel incurred in connection with the Independent Counsel’s determination pursuant to Section 7(b).

9. No Other Presumptions.

10. Non-Exclusivity . The rights of Indemnitee hereunder will be in addition to any other rights Indemnitee may have under the Constituent Documents, or the substantive laws of the

Company’s jurisdiction of incorporation, any other contract or otherwise (collectively, “ Other Indemnity Provisions ”); provided , however , that (a) to the extent that Indemnitee otherwise would have any greater right to indemnification under any Other Indemnity Provision, Indemnitee will be deemed to have such greater right hereunder and (b) to the extent that any change is made to any Other Indemnity Provision which permits any greater right to indemnification than that provided under this Agreement as of the date hereof, Indemnitee will be deemed to have such greater right hereunder. The Company will not adopt any amendment to any of the Constituent Documents the effect of which would be to deny, diminish or encumber Indemnitee’s right to indemnification under this Agreement or any Other Indemnity Provision.

11. Liability Insurance and Funding . For the duration of Indemnitee’s service as a director and/or officer of the Company, and thereafter for so long as Indemnitee shall be subject to any pending or possible Indemnifiable Claim, the Company shall use commercially reasonable efforts (taking into account the scope and amount of coverage available relative to the cost thereof) to cause to be maintained in effect with an insurance carrier having an AM Best rating of not less than A-VI policies of directors’ and officers’ liability insurance providing coverage for directors and/or officers of the Company that is at least substantially comparable in scope and amount to that provided by the Company’s current policies of directors’ and officers’ liability insurance. The Company shall provide Indemnitee with a copy of all directors’ and officers’ liability insurance applications, binders, policies, declarations, endorsements and other related materials, and shall provide Indemnitee with a reasonable opportunity to review and comment on the same. Without limiting the generality or effect of the two immediately preceding sentences, the Company shall not discontinue or significantly reduce the scope or amount of coverage from one policy period to the next (i) without the prior approval thereof by a majority vote of the Incumbent Directors, even if less than a quorum, or (ii) if at the time that any such discontinuation or significant reduction in the scope or amount of coverage is proposed there are no Incumbent Directors, without the prior written consent of Indemnitee (which consent shall not be unreasonably withheld or delayed). In all policies of directors’ and officers’ liability insurance obtained by the Company, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits, subject to the same limitations, as are accorded to the Company’s directors and officers most favorably insured by such policy. The Company may, but shall not be required to, create a trust fund, grant a security interest or use other means, including without limitation a letter of credit, to ensure the payment of such amounts as may be necessary to satisfy its obligations to indemnify and advance expenses pursuant to this Agreement.

connection therewith) under any insurance policy, the Constituent Documents and Other Indemnity Provisions or otherwise (including without limitation from any entity or enterprise referred to in clause (i) of the definition of “Indemnifiable Claim” in Section 1(f)) in respect of such Indemnifiable Losses otherwise indemnifiable hereunder.

14. Defense of Claims . The Company shall be entitled to assume the defense of any Indemnifiable Claim, with counsel reasonably satisfactory to the Indemnitee, and after such counsel has been retained the Company will not be liable to Indemnitee for any fees of other counsel subsequently accrued by Indemnitee in connection therewith; provided that if Indemnitee believes, after consultation with counsel selected by Indemnitee, that (a) the use of counsel chosen by the Company to represent Indemnitee would present such counsel with an actual or potential conflict, (b) the named parties in any such Indemnifiable Claim (including without limitation any impleaded parties) include both the Company and Indemnitee and Indemnitee shall conclude that there may be one or more legal defenses available to him or her that are different from or in addition to those available to the Company, or (c) any such representation by such counsel would be precluded under the applicable standards of professional conduct then prevailing, then Indemnitee shall be entitled to retain separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any particular Indemnifiable Claim) at the Company’s expense. If the Company assumes the defense of any Indemnifiable Claim and Indemnitee is not entitled to retain separate counsel at the Company’s expense pursuant to the immediately preceding sentence, Indemnitee shall be entitled to retain counsel at Indemnitee’s own expense and participate therein. If the Company does not assume the defense of an Indemnifiable Claim, the Company shall be entitled to participate therein. The Company shall not be liable to Indemnitee under this Agreement for any amounts paid in settlement of any threatened or pending Indemnifiable Claim effected without the Company’s prior written consent. The Company shall not, without the prior written consent of the Indemnitee, effect any settlement of any threatened or pending Indemnifiable Claim to which the Indemnitee is, or could have been, a party unless (i) such settlement solely involves the payment of money (and such payment is not a fine) and includes a complete and unconditional release of the Indemnitee from all liability on any claims that are the subject matter of such Indemnifiable Claim without an admission of liability or wrongdoing on the part of Indemnitee and (ii) the Company shall have agreed Indemnitee is entitled to indemnification hereunder in respect of such Indemnifiable Claim. Neither the Company nor Indemnitee shall unreasonably withhold its consent to any proposed settlement; provided that Indemnitee may withhold consent to any settlement that does not provide a complete and unconditional release of Indemnitee.

(d) This Agreement shall continue in full force and effect after Indemnitee has ceased to be a director and officer of the Company.

22. Counterparts . This Agreement may be executed in two counterparts, each of which will be deemed to be an original but both of which together shall constitute one and the same agreement.

[Signatures Appear On Following Page]

IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly authorized representative to execute this Agreement as of the date first above written.


		KAISER ALUMINUM CORPORATION
		27422 Portola Parkway, Suite 350
		Foothill Ranch, California 92610-2831

		By:

				Name:
				Title:

		[INDEMNITEE]
		[Address]


		[Indemnitee]

Exhibit 10.12

[Executive Officer Grants]

Restricted Stock Award Agreement
Under the 2006 Equity and Performance
Incentive Plan

Kaiser Aluminum Corporation

Kaiser Aluminum Corporation
2006 Equity and Performance Incentive Plan
Restricted Stock Award Agreement

You have been selected to receive a grant of Restricted Stock pursuant to the Kaiser Aluminum Corporation 2006 Equity and Performance Incentive Plan (the “Plan”), as specified below:

Participant :

Date of Grant :

Number of Shares of Restricted Stock Granted :

Purchase Price: $ per share of Restricted Stock

Lapse of Restriction Date : Restrictions placed on the shares of Restricted Stock shall lapse on the date and in the amount listed below:


Date on Which	Number of Shares for	Cumulative Number of Shares
Restrictions Lapse	Which Restrictions Lapse	for Which Restrictions Lapse

THIS RESTRICTED STOCK AWARD AGREEMENT, effective as of the Date of Grant set forth above (this “Agreement”), represents the grant of Restricted Stock by Kaiser Aluminum Corporation, a Delaware corporation (the “Company”), to the Participant named above, pursuant to the provisions of the Plan.

The Plan provides a complete description of the terms and conditions governing the Restricted Stock. If there is any inconsistency between the terms of this Agreement and the terms of the Plan, the Plan’s terms shall completely supersede and replace the conflicting terms of this Agreement. All capitalized terms shall have the meanings ascribed to them in the Plan, unless specifically set forth otherwise herein. The parties hereto agree as follows:

1. Employment with the Company . Except as may otherwise be provided in Sections 5 or 6 of this Agreement, the shares of Restricted Stock granted hereunder are granted on the condition that the Participant remains an Employee of the Company from the Date of Grant through (and including) the “Date on which Restrictions Lapse” set forth in the table above opposite such number of shares of Restricted Stock (such applicable periods each being referred to herein as a “Period of Restriction”).

This grant of Restricted Stock shall not confer any right to the Participant (or any other Participant) to be granted Restricted Stock or other Awards in the future under the Plan.

2. Certificate Legend . Each certificate representing, or book entry account maintaining, shares of Restricted Stock granted pursuant to the Plan shall bear the following legend:

“The sale or other transfer of the shares of common stock represented by this certificate, whether voluntary, involuntary or by operation of law, is subject to certain restrictions on transfer as set forth in the Kaiser Aluminum Corporation 2006 Equity and Performance Incentive Plan (the “Plan”), and in the associated Restricted Stock Award Agreement. A copy of the Plan and such Restricted Stock Award Agreement may be obtained from Kaiser Aluminum Corporation.”

3. Receipt and Delivery of Stock; Removal of Restrictions .

	(a)		The Participant waives receipt from the Company of a certificate or certificates representing the shares of Restricted Stock granted hereunder, registered in the Participant’s name and bearing a legend evidencing the restrictions imposed on such shares of Restricted Stock by this Agreement. The Participant acknowledges and agrees that the Company shall retain custody of such certificate or certificates until the restrictions imposed by the Period of Restriction on the shares of Restricted Stock granted hereunder lapse. The Participant acknowledges and agrees that, alternatively, the shares of Restricted Stock granted hereunder may be maintained in book-entry form with instructions from the Company to the Company’s transfer agent that such shares shall remain restricted until the restrictions imposed by the Period of Restriction on such shares lapse.

	(b)		Except as may otherwise be provided herein and in the Plan, the shares of Restricted Stock granted pursuant to this Agreement shall become freely transferable by the Participant on the date and in the amount set forth under the Lapse of Restriction Dates above, subject to all restrictions on transfers imposed by the Company’s certificate of incorporation, bylaws or insider trading policies as in effect from time to time or by applicable federal or state securities laws. Once shares of Restricted Stock granted pursuant to this Agreement are no longer subject to any restrictions on transfer under this Agreement or the Plan, the Participant shall be entitled to have the legend required by Section 2 of this Agreement removed from the applicable stock certificates or book-entry account.

4. Voting Rights and Dividends . During a Period of Restriction, the Participant may exercise full voting rights and shall receive all dividends and other distributions paid with respect to the shares of Restricted Stock held by the Participant; provided, however, that if any such dividends or distributions are paid in shares of the Company’s capital stock, such shares shall be subject to the same restrictions on transferability as are the shares of Restricted Stock with respect to which they were paid.

5. Termination of Employment .

(a)

By Death . In the event the Participant ceases to be an Employee of the Company by reason of death during a Period of Restriction, all shares of Restricted Stock held by the Participant at the time of death shall no longer be subject to the Period of

			Restriction and shall become freely transferable (subject, however, to all restrictions on transfer imposed by the Company’s certificate of incorporation or bylaws or by applicable federal or state securities laws) by such Person or Persons as shall have been named as the Participant’s beneficiary, or by such Persons that have acquired the Participant’s rights under the shares of Restricted Stock by will or the laws of descent and distribution. Once the shares of Restricted Stock are no longer subject to any restrictions on transfer under this Agreement or the Plan, the Person holding such shares shall be entitled to have the legend required by Section 2 of this Agreement removed from the applicable stock certificates or book-entry account.

	(b)		By Disability . In the event the Participant ceases to be an Employee of the Company by reason of Disability (as defined in this Section 5(b)) during a Period of Restriction, all shares of Restricted Stock held by the Participant at the time of employment termination shall no longer be subject to the Period of Restriction and shall become freely transferable (subject, however, to all restrictions on transfer imposed by the Company’s certificate of incorporation or bylaws or by applicable federal or state securities laws) by the Participant. Once shares of Restricted Stock are no longer subject to any restrictions on transfer under this Agreement or the Plan, the Person holding such shares shall be entitled to have the legend required by Section 2 of this Agreement removed from the applicable stock certificates or book-entry account.

			“Disability” shall be defined as a total and permanent disability as a result of bodily injury, disease or mental disorder which results in the Participant’s entitlement to long-term disability benefits under the Kaiser Aluminum Self-Insured Welfare Plan or the Kaiser Aluminum Salaried Employees Retirement Plan.

	(c)		Involuntary Termination Other Than For Cause or Detrimental Activity; Termination For Good Reason . In the event the Participant ceases to be an Employee of the Company because either (i) the Company or any of its Subsidiaries terminates such employment for any reason other than in a termination for Cause or other Detrimental Activity or (ii) the Participant terminates his or her employment for Good Reason, all shares of Restricted Stock held by the Participant at the time of employment termination shall no longer be subject to the Period of Restriction and shall become freely transferable (subject, however, to all restrictions on transfer imposed by the Company’s certificate of incorporation or bylaws or by applicable federal or state securities laws) by the Participant. Once shares of Restricted Stock are no longer subject to any restrictions on transfer under this Agreement or the Plan, the Person holding such shares shall be entitled to have the legend required by Section 2 of this Agreement removed from the applicable stock certificates or book-entry account.

	(d)		For Other Reasons . In the event the Participant ceases to be an Employee of the Company for any reason other than the reasons set forth in Section 5(a), 5(b) or 5(c) of this Agreement during a Period of Restriction, all shares of Restricted Stock held by the Participant at the time of employment termination and still subject to the restrictions on transfer pursuant to Section 7 of this Agreement shall be forfeited by

the Participant to the Company. Upon forfeiture of the Restricted Stock, the Company shall have the right, at the sole discretion of the Committee, to vest all or any portion of the Restricted Stock grant held by the Participant.

6. Change in Control . Notwithstanding anything to the contrary in this Agreement, in the event of a Change in Control of the Company during a Period of Restriction and prior to the Participant ceasing to be an Employee of the Company, the Period of Restriction shall immediately lapse, with all such shares of Restricted Stock vesting and becoming freely transferable by the Participant, subject to restrictions on transfers imposed by the Company’s certificate of incorporation, bylaws or insider trading policies as in effect from time to time or by applicable federal or state securities laws.

7. Restrictions on Transfer . Unless otherwise determined by the Committee in accordance with the Plan, during the applicable Period of Restriction, shares of Restricted Stock granted pursuant to this Agreement may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated (a “Transfer”), other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order. If, during a Period of Restriction, any Transfer, whether voluntary or involuntary, of shares of Restricted Stock is made other than in accordance with this Agreement or the Plan, or if any attachment, execution, garnishment or lien shall be issued against or placed upon the shares of Restricted Stock, the Participant’s right to such shares of Restricted Stock shall be immediately forfeited by the Participant to the Company, and all obligations of the Company under this Agreement shall terminate.

8. Detrimental Activity . If the Participant, either during employment by the Company or a Subsidiary or within one (1) year after termination of such employment, shall engage in any Detrimental Activity, and the Committee shall so find, forthwith upon notice of such finding, the Participant shall:

	(a)		Forfeit any shares of Restricted Stock then held by the Participant;

	(b)		Return to the Company, in exchange for payment by the Company of any cash amount actually paid therefor by the Participant (unless such payment is prohibited by law), all Common Shares that the Participant has not disposed of that were offered pursuant to the Plan within one (1) year prior to the date of the commencement of such Detrimental Activity; and

	(c)		With respect to any Common Shares so acquired that the Participant has disposed of, pay to the Company in cash the difference between:

	(i)		any cash amount actually paid therefor by the Participant pursuant to the Plan, and

	(ii)		the Market Value per Share of the Common Shares on the date of such acquisition.

To the extent that such amounts are not paid to the Company, the Company may, to the extent permitted by law, set off the amounts so payable to it against any amounts that may be owing from

time to time by the Company or a Subsidiary to the Participant, whether as wages, deferred compensation or vacation pay or in the form of any other benefit or for any other reason.

9. Beneficiary Designation . The Participant may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Agreement is to be paid in case of the Participant’s death before the Participant receives all of such benefit. Each such designation shall revoke all prior designations by the Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Vice President Human Resources of the Company during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.

10. Continuation of Employment . This Agreement shall not confer upon the Participant any right with respect to continuance of employment with the Company or any Subsidiary, nor shall this Agreement interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate the Participant’s employment or other service at any time.

11. Miscellaneous .

	(a)		This Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon the Participant.

	(b)		In accordance with Section 19 of the Plan, the Board may terminate, amend or modify the Plan.

	(c)		The Participant shall, not later than the applicable “Date on which Restrictions Lapse” as set forth in the table on page 1 of this Agreement, pay to the Company or make arrangements satisfactory to the Committee for payment of any federal, state and local taxes (including the Participant’s FICA obligation), whether domestic or foreign, required by law to be withheld on account of such event.

			The Participant acknowledges and agrees that the Company shall have the power and the right to deduct or withhold an amount sufficient to satisfy federal, state and local taxes (including the Participant’s FICA obligation), whether domestic or foreign, required by law to be withheld with respect to any exercise of the Participant’s rights under this Agreement should Participant fail to make timely payment of all taxes due.

			The Participant may elect, subject to the Plan and any procedural rules adopted by the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold shares having an aggregate Fair Market Value on the date the tax is to be determined, equal to the amount required to be withheld.

	(d)		The Participant agrees to take all steps necessary to comply with all applicable provisions with respect transfers of the Company’s securities imposed by the Company’s certificate of incorporation, bylaws and insider trading policies as in effect from time to time and federal and state securities laws in exercising his or her rights under this Agreement.

	(e)		All obligations of the Company under the Plan and this Agreement, with respect to the Restricted Stock, shall be binding on any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company.

	(f)		This Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of Delaware.

	(g)		Notice hereunder shall be given to the Company at its principal place of business, and shall be given to the Participant at the address set forth below, or in either case at such address as one party may subsequently furnish to the other party in writing.

12. Definitions .

	(a)		“ Beneficial Owner ” or “ Beneficial Ownership ” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

	(b)		“ Board ” or “Board of Directors ” means the Board of Directors of the Company.

	(c)		“ Business Combination ” means a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another corporation or entity, or other transaction.

	(d)		“ Change in Control ” means the occurrence on or after the date of this Agreement of any of the following events:

(i)

the acquisition by any Person of Beneficial Ownership of 35% or more of the combined voting power of the then-outstanding Voting Stock of the Company; provided, however, that:

(A)

for purposes of this Section 12(d)(i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition of Voting Stock of the Company directly from the Company (x) pursuant to the POR or (y) that is approved by a majority of the Incumbent Directors, (2) any acquisition of Voting Stock of the Company by the Company or any Subsidiary, (3) any acquisition of Voting Stock of the Company by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary (other than any voluntary employee beneficiary association established in connection with the POR), and (4) any acquisition of Voting Stock of the

			Company by any Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 12(d)(iii) below;
	(B)		if any Person acquires Beneficial Ownership of 35% or more of combined voting power of the then-outstanding Voting Stock of the Company as a result of a transaction described in clause (A)(1) of Section 12(d)(i) and such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of the Company representing 1% or more of the then-outstanding Voting Stock of the Company, other than in an acquisition directly from the Company pursuant to the POR, in an acquisition directly from the Company in a transaction that is approved by a majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Stock are treated equally, such subsequent acquisition shall be deemed to constitute a Change in Control;

	(C)		a Change in Control will not be deemed to have occurred if a Person acquires beneficial ownership of 35% or more of the Voting Stock of the Company as a result of a reduction in the number of shares of Voting Stock of the Company outstanding unless and until such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of the Company representing 1% or more of the then-outstanding Voting Stock of the Company, other than in an acquisition directly from the Company pursuant to the POR, in an acquisition directly from the Company in a transaction that is approved by a majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Stock are treated equally; and

	(D)		if at least a majority of the Incumbent Directors determine in good faith that a Person has acquired beneficial ownership of 35% or more of the Voting Stock of the Company inadvertently, and such Person divests as promptly as practicable a sufficient number of shares so that such Person beneficially owns less than 35% of the Voting Stock of the Company, then no Change in Control shall have occurred as a result of such Person’s acquisition; or

	(ii)		a majority of the Directors are not Incumbent Directors; or

	(iii)		the consummation of a Business Combination, unless, in each case, immediately following such Business Combination (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Stock of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination (including without limitation an entity which as a result

			of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from such Business Combination, any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from such Business Combination (other than any voluntary employee beneficiary association established in connection with the POR) or any Person that immediately prior to such Business Combination owns, directly or indirectly, 35% or more of the Voting Stock of the Company so long as such Person does not at such time own, directly or indirectly, more than 1% of the securities of the other corporation or other entity involved in such Business Combination to be converted into or exchanged for shares of Voting Stock of the entity resulting from such Business Combination pursuant to such Business Combination)) beneficially owns, directly or indirectly, 35% or more of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination, and (C) at least a majority of the members of the Board of Directors of the entity resulting from such Business Combination were Incumbent Directors at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or

	(iv)		approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 12(d)(iii).

	(e)		“ Director ” shall mean a member of the Board of Directors of the Company.

	(f)		“ Employee of the Company ” means an officer or employee of the Company or one or more of its Subsidiaries.

	(g)		“ Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.

	(h)		“ Good Reason ” means, without a Participant’s consent, the occurrence of any of the following events which is not cured by the Company within ten (10) business days following the Participant’s written notice to the Company of the event constituting Good Reason; provided, however, that any such written notice received by the Company following the thirty (30) day period after the date on which the Participant first had knowledge of the occurrence of such event giving rise to Good Reason (or, in the case of multiple events, the latest to occur of such events) shall not be effective and the Participant shall be deemed to have waived his/her right to terminate employment for Good Reason with respect to such event:

(i)

Demotion, reduction in title, reduction in position or responsibilities, or change in reporting responsibilities or reporting level that is materially and adversely inconsistent with the Participant’s then position or the assignment of duties and/or responsibilities materially and adversely inconsistent with such position; or

	(ii)		Relocation of the Participant’s primary office location more than fifty (50) miles from the Participant’s then current office location; or

	(iii)		Reduction of greater than 10% in the Participant’s then base salary or reduction of greater than 10% in the Participant’s then long term or short term incentive compensation opportunity or a reduction in the Participant’s eligibility for participation in the Company’s benefit plans that is not commensurate with a similar reduction among similarly situated employees.

	(i)		“ Incumbent Directors ” means the individuals who, as of the date hereof, are Directors of the Company and any individual becoming a Director subsequent to the date hereof whose election, nomination for election by the Company’s stockholders, or appointment was approved by a vote of at least two-thirds of the then Incumbent Directors (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination); provided, however, that an individual shall not be an Incumbent Director if such individual’s election or appointment to the Board occurs as a result of an actual or threatened election contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.

	(j)		“ Person ” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d).

	(k)		“ POR ” means the Second Amended Joint Plan of Reorganization of Kaiser Aluminum Corporation, Kaiser Aluminum & Chemical Corporation and Certain of Their Debtor Affiliates, as modified, filed pursuant to section 1121(a) of title 11 of the United States Code and confirmed by an order of the United States Bankruptcy Court for the District of Delaware entered on February 6, 2006, which confirmation was affirmed by an order of the United States District Court for the District of Delaware entered on May 11, 2006.

	(l)		“ Cause ” means (1) the Participant’s engaging in fraud, embezzlement, gross misconduct or any act of gross dishonesty with respect to the Company or its affiliates, (2) the Participant’s habitual drug or alcohol use which impairs the ability of the Participant to perform his duties with the Company or its affiliates, (3) the Participant’s indictment with respect to, conviction of, or plea of guilty or no contest to, any felony, or other comparable crime under applicable local law (except, in any event, for motor vehicle violations not involving personal injuries to third parties or driving while intoxicated), or the Participant’s incarceration with respect to any of the foregoing that, in each case, impairs the Participant’s ability to continue to perform his duties with the Company and its affiliates, or (4) the Participant’s material breach of any written employment agreement or other agreement between the Company and the Participant, or of the Company’s Code of Business Conduct, or failure by the Participant to substantially perform his or her duties for the Company which remains uncorrected or reoccurs after written notice has been delivered to the

			Participant demanding substantial performance and the Participant has had a reasonable opportunity to correct such breach or failure to perform.

	(m)		“ Voting Stock ” means securities entitled to vote generally in the election of directors (or similar governing bodies).

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed effective as of the Date of Grant.


		Kaiser Aluminum Corporation

		By:

				Name:

				Title:

The foregoing Agreement is hereby accepted and the terms and conditions thereof are hereby agreed to by the Participant.


		Participant

		Participant’s name and address:

DESIGNATION OF BENEFICIARY:

I hereby designate as my primary beneficiary and as my contingent beneficiary to receive the amounts attributable to my account hereunder and payable under the Plan in the event of my death.

Exhibit 10.13

[Non-Employee Director Grants]

Restricted Stock Award Agreement
Under the 2006 Equity and Performance
Incentive Plan

Kaiser Aluminum Corporation

Kaiser Aluminum Corporation
2006 Equity and Performance Incentive Plan
Restricted Stock Award Agreement

As a Non-Employee Director of the Company, you are receiving this grant of Restricted Stock pursuant to the Kaiser Aluminum Corporation 2006 Equity and Performance Incentive Plan (the “Plan”), as specified below:

Director :

Date of Grant :

Number of Shares of Restricted Stock Granted :

Purchase Price: $ per share of Restricted Stock

Lapse of Restriction Date : Restrictions placed on the shares of Restricted Stock shall lapse on the date and in the amount listed below:


Date on Which	Number of Shares for	Cumulative Number of Shares
Restrictions Lapse	Which Restrictions Lapse	for Which Restrictions Lapse

THIS RESTRICTED STOCK AWARD AGREEMENT, effective as of the Date of Grant set forth above (this “Agreement”), represents the grant of Restricted Stock by Kaiser Aluminum Corporation, a Delaware corporation (the “Company”), to the Director named above, pursuant to the provisions of the Plan.

1. Service as a Director of the Company . Except as may otherwise be provided in Sections 5 or 6 of this Agreement, the shares of Restricted Stock granted hereunder are granted on the condition that the Director remains a Director of the Company from the Date of Grant through (and including) the “Date on which Restrictions Lapse” set forth in the table above opposite such number of shares of Restricted Stock (such applicable periods each being referred to herein as a “Period of Restriction”).

This grant of Restricted Stock shall not confer any right to the Director to be granted Restricted Stock or other Awards in the future under the Plan.

2. Certificate Legend . Each certificate representing, or book-entry account maintaining, shares of Restricted Stock granted pursuant to the Plan shall bear the following legend:

3. Receipt and Delivery of Stock; Removal of Restrictions .

	(a)		The Director waives receipt from the Company of a certificate or certificates representing the shares of Restricted Stock granted hereunder, registered in the Director’s name and bearing a legend evidencing the restrictions imposed on such shares of Restricted Stock by this Agreement. The Director acknowledges and agrees that the Company shall retain custody of such certificate or certificates until the restrictions imposed by the Period of Restriction on the shares of Restricted Stock granted hereunder lapse. The Director acknowledges and agrees that, alternatively, the shares of Restricted Stock granted hereunder may be maintained in book-entry form with instructions from the Company to the Company’s transfer agent that such shares shall remain restricted until the restrictions imposed by the Period of Restriction on such shares lapse.

	(b)		Except as may otherwise be provided herein and in the Plan, the shares of Restricted Stock granted pursuant to this Agreement shall become freely transferable by the Director on the date and in the amount set forth under the Lapse of Restriction Dates above, subject to all restrictions on transfers imposed by the Company’s certificate of incorporation, bylaws or insider trading policies as in effect from time to time or by applicable federal or state securities laws. Once shares of Restricted Stock granted pursuant to this Agreement are no longer subject to any restrictions on transfer under this Agreement or the Plan, the Director shall be entitled to have the legend required by Section 2 of this Agreement removed from the applicable stock certificates or book-entry account.

4. Voting Rights and Dividends . During a Period of Restriction, the Director may exercise full voting rights and shall receive all dividends and other distributions paid with respect to the shares of Restricted Stock held by the Director; provided, however, that if any such dividends or distributions are paid in shares of the Company’s capital stock, such shares shall be subject to the same restrictions on transferability as are the shares of Restricted Stock with respect to which they were paid.

5. Termination as a Director .

	(a)		By Death . In the event the service of the Director to the Company is terminated by reason of death during a Period of Restriction, all shares of Restricted Stock held by the Director at the time of death shall no longer be subject to the Period of Restriction and shall become freely transferable (subject, however, to all restrictions on transfer imposed by the Company’s certificate of incorporation or bylaws or by applicable federal or state securities laws) by such Person or Persons as shall have been named as the Director’s beneficiary, or by such Persons that have acquired the Director’s rights under the shares of Restricted Stock by will or the laws of descent and distribution. Once the shares of Restricted Stock are no longer subject to any restrictions on transfer under this Agreement or the Plan, the Person holding such shares shall be entitled to have the legend required by Section 2 of this Agreement removed from the applicable stock certificates or book-entry account.

	(b)		By Disability . In the event the services of the Director to the Company is terminated by reason of Disability (as defined in this Section 5(b)) during a Period of Restriction, all shares of Restricted Stock held by the Director at the time of employment termination shall no longer be subject to the Period of Restriction and shall become freely transferable (subject, however, to all restrictions on transfer imposed by the Company’s certificate of incorporation or bylaws or by applicable federal or state securities laws) by the Director. Once shares of Restricted Stock are no longer subject to any restrictions on transfer under this Agreement or the Plan, the Person holding such shares shall be entitled to have the legend required by Section 2 of this Agreement removed from the applicable stock certificates or book-entry account.

			“Disability” shall be defined as a disability as a result of bodily injury, disease or mental disorder which results in the inability of the Director to continue to serve as a director of the Company.

	(c)		For Other Reasons . In the event the service of the Director to the Company is terminated for any reason other than the reasons set forth in Section 5(a) or 5(b) of this Agreement during a Period of Restriction, all shares of Restricted Stock held by the Director at such time and still subject to the restrictions on transfer pursuant to Section 7 of this Agreement shall be forfeited by the Director to the Company. Upon forfeiture of the Restricted Stock, the Company shall have the right, at the sole discretion of the Board, to vest all or any portion of the Restricted Stock grant held by the Director.

6. Change in Control . Notwithstanding anything to the contrary in this Agreement, in the event of a Change in Control of the Company during a Period of Restriction and prior to the Director’s termination of service as a Director, the Period of Restriction shall immediately lapse, with all such shares of Restricted Stock vesting and becoming freely transferable by the Director, subject to restrictions on transfers imposed by the Company’s certificate of incorporation, bylaws or insider trading policies as in effect from time to time or by applicable federal or state securities laws.

7. Restrictions on Transfer . Unless otherwise determined by the Committee in accordance with the Plan, during the applicable Period of Restriction, shares of Restricted Stock granted pursuant to this Agreement may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated (a “Transfer”), other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order. If, during a Period of Restriction, any Transfer, whether voluntary or involuntary, of shares of Restricted Stock is made other than in accordance with this Agreement or the Plan, or if any attachment, execution, garnishment or lien shall be issued against or placed upon the shares of Restricted Stock, the Director’s right to such shares of Restricted Stock shall be immediately forfeited by the Director to the Company, and all obligations of the Company under this Agreement shall terminate.

8. Beneficiary Designation . The Director may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Agreement is to be paid in case of the Director’s death before the Director receives all of such benefit. Each such designation shall revoke all prior designations by the Director, shall be in a form prescribed by the Company, and will be effective only when filed by the Director in writing with the Vice President Human Resources of the Company during the Director’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Director’s death shall be paid to the Director’s estate.

9. Miscellaneous .

	(a)		This Agreement and the rights of the Director hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon the Director.

	(b)		In accordance with Section 19 of the Plan, the Board may terminate, amend or modify the Plan.

	(c)		The Director agrees to take all steps necessary to comply with all applicable provisions with respect transfers of the Company’s securities imposed by the Company’s certificate of incorporation, bylaws and insider trading policies as in effect from time to time and federal and state securities laws in exercising his or her rights under this Agreement.

	(d)		All obligations of the Company under the Plan and this Agreement, with respect to the Restricted Stock, shall be binding on any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company.

	(e)		This Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of Delaware.

(f)

Notice hereunder shall be given to the Company at its principal place of business, and shall be given to the Director at the address set forth below, or in either case at such address as one party may subsequently furnish to the other party in writing.

10. Definitions .

	(a)		“ Beneficial Owner ” or “ Beneficial Ownership ” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

	(b)		“ Board ” or “Board of Directors ” means the Board of Directors of the Company.

	(c)		“ Business Combination ” means a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another corporation or entity, or other transaction.

	(d)		“ Change in Control ” means the occurrence on or after the date of this Agreement of any of the following events:

(i)

the acquisition by any Person of Beneficial Ownership of 35% or more of the combined voting power of the then-outstanding Voting Stock of the Company; provided, however, that:

	(A)		for purposes of this Section 12(d)(i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition of Voting Stock of the Company directly from the Company (x) pursuant to the POR or (y) that is approved by a majority of the Incumbent Directors, (2) any acquisition of Voting Stock of the Company by the Company or any Subsidiary, (3) any acquisition of Voting Stock of the Company by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary (other than any voluntary employee beneficiary association established in connection with the POR), and (4) any acquisition of Voting Stock of the Company by any Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 12(d)(iii) below;

	(B)		if any Person acquires Beneficial Ownership of 35% or more of combined voting power of the then-outstanding Voting Stock of the Company as a result of a transaction described in clause (A)(1) of Section 12(d)(i) and such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of the Company representing 1% or more of the then-outstanding Voting Stock of the Company, other than in an acquisition directly from the Company pursuant to the POR, in an acquisition directly from the Company in a transaction that is approved by a majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting

			Stock are treated equally, such subsequent acquisition shall be deemed to constitute a Change in Control;

	(C)		a Change in Control will not be deemed to have occurred if a Person acquires beneficial ownership of 35% or more of the Voting Stock of the Company as a result of a reduction in the number of shares of Voting Stock of the Company outstanding unless and until such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of the Company representing 1% or more of the then-outstanding Voting Stock of the Company, other than in an acquisition directly from the Company pursuant to the POR, in an acquisition directly from the Company in a transaction that is approved by a majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Stock are treated equally; and

	(D)		if at least a majority of the Incumbent Directors determine in good faith that a Person has acquired beneficial ownership of 35% or more of the Voting Stock of the Company inadvertently, and such Person divests as promptly as practicable a sufficient number of shares so that such Person beneficially owns less than 35% of the Voting Stock of the Company, then no Change in Control shall have occurred as a result of such Person’s acquisition; or

	(ii)		a majority of the Directors are not Incumbent Directors; or

	(iii)		the consummation of a Business Combination, unless, in each case, immediately following such Business Combination (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Stock of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination (including without limitation an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from such Business Combination, any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from such Business Combination (other than any voluntary employee beneficiary association established in connection with the POR) or any Person that immediately prior to such Business Combination owns, directly or indirectly, 35% or more of the Voting Stock of the Company so long as such Person does not at such time own, directly or indirectly, more than 1% of the securities of the other corporation or other entity involved in such Business Combination to be converted into or exchanged for shares of Voting Stock of the entity resulting from such Business Combination pursuant to such Business Combination)) beneficially owns, directly or indirectly, 35% or more of the

			combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination, and (C) at least a majority of the members of the Board of Directors of the entity resulting from such Business Combination were Incumbent Directors at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or

	(iv)		approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 12(d)(iii).

	(e)		“ Director ” shall mean a member of the Board of Directors of the Company.

	(f)		“ Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.

	(g)		“ Incumbent Directors ” means the individuals who, as of the date hereof, are Directors of the Company and any individual becoming a Director subsequent to the date hereof whose election, nomination for election by the Company’s stockholders, or appointment was approved by a vote of at least two-thirds of the then Incumbent Directors (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination); provided, however, that an individual shall not be an Incumbent Director if such individual’s election or appointment to the Board occurs as a result of an actual or threatened election contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.

	(h)		“ Person ” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d).

	(i)		“ POR ” means the Second Amended Joint Plan of Reorganization of Kaiser Aluminum Corporation, Kaiser Aluminum & Chemical Corporation and Certain of Their Debtor Affiliates, as modified, filed pursuant to section 1121(a) of title 11 of the United States Code and confirmed by an order of the United States Bankruptcy Court for the District of Delaware entered on February 6, 2006, which confirmation was affirmed by an order of the United States District Court for the District of Delaware entered on May 11, 2006.

	(j)		“ Voting Stock ” means securities entitled to vote generally in the election of directors (or similar governing bodies).

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed effective as of the Date of Grant.



		Kaiser Aluminum Corporation

		By:

				Name:

				Title:

The foregoing Agreement is hereby accepted and the terms and conditions thereof are hereby agreed to by the Director.



		Director

		Director’s name and address:

DESIGNATION OF BENEFICIARY:

I hereby designate as my primary beneficiary and as my contingent beneficiary to receive the amounts attributable to my account hereunder and payable under the Plan in the event of my death.

Exhibit 10.14

KAISER ALUMINUM

FABRICATED PRODUCTS

RESTORATION PLAN

Effective May 1, 2005

KAISER ALUMINUM
FABRICATED PRODUCTS
RESTORATION PLAN

TABLE OF CONTENTS


PREAMBLE		Page No.

ARTICLE I	Establishment of Plan and Purpose		1

ARTICLE II	Definitions and Construction		1
	2.1 - Definitions		1
	2.2 - Construction		7
	2.3 - Governing Law		7

ARTICLE III	Participation and Participant Elections		7
	3.1 - Participation		7
	3.2 - Participant Elections		7
	3.3 - Cessation of Participation		8

ARTICLE 1V	Company Contributions		8
	4.1 - Matching Contributions		8
	4.2 - Fixed-Rate Contributions		9
	4.3 - Vesting		9
	4.4 - Forfeitures		9
	4.5 - Contributions for 2005 and 2006		10

ARTICLE V	Maintenance of Participant Accounts		10
	5.1 - Establishment of Participant Accounts		10
	5.2 - Valuation of Accounts		10
	5.3 - Hypothetical Investment Benchmarks		10
	5.4 - Statement of Participant Accounts		11

ARTICLE VI	Distribution of Benefits		11
	6.1 - Distribution of Benefits		11

ARTICLE VII	Death Benefits		11
	7.1 - Death Benefits		11

ARTICLE VIII	Administration		12
	8.1 - The Committee		12
	8.2 - Powers and Duties of the Committee		12
	8.3 - Nondiscriminatory Exercise Of Authority		12
	8.4 - Participant as a Committee Member		12
	8.5 - Claims Procedure		12

ARTICLE IX	Miscellaneous Provisions		13


PREAMBLE		Page No.

	9.1 - No Commitment as to Employment		13
	9.2 - Indemnification		13
	9.3 - Amendment; Termination		13
	9.4 - Binding Effect		14
	9.5 - Construction of Plan		14
	9.6 - Validity of Plan		14
	9.7 - Title To Assets		14
	9.8 - Expenses		14
	9.9 - Inalienability of Benefits		14
	9.10 - Payment of Benefits		14

ARTICLE X	Source of Payment of Benefits		15
	10.1 - Source of Payments of Benefits		15

ARTICLE I

ESTABLISHMENT OF PLAN AND PURPOSE

Kaiser Aluminum Fabricated Products, LLC (the “Company”), hereby adopts and establishes the Kaiser Aluminum Fabricated Products Restoration Plan (“Plan”). The Effective Date of the Plan is as of May 1, 2005. However, the Plan will become operative as of July 6, 2006, the date the Plan was adopted by the Board of Directors of the Company and KAC. The Plan shall apply to all Eligible Employees who become Participants on or after the Effective Date. In addition, benefits accrued to participants under the Kaiser Aluminum Supplemental Benefits Plan through April 30, 2005 will transfer to the Plan as soon as administratively feasible.

The purpose of the Plan is to restore benefits that would have otherwise been payable to participants under the Company’s benefit plans but for the limitations on benefit accruals and payments imposed by the Code.

It is the intention of the Company that the Plan meet all of the requirements necessary to qualify as a nonqualified, unfunded, unsecured plan of deferred compensation (for a select group of management or highly compensated employees) within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and all Plan provisions shall be interpreted accordingly. Further, it is the intention of the Company for the Plan to meet all of the requirements of Code Section 409A and any regulations or guidance promulgated thereunder so that all amounts deferred on behalf of a Participant hereunder shall not be includible in the income of the Participant until distributed to the Participant.

ARTICLE II

DEFINITIONS AND CONSTRUCTION

2.1 Definition . Where the following words and phrases appear in this Plan, they shall have the respective meanings set forth below, unless their context clearly indicates to the contrary:

(a)

Account . A bookkeeping account of a Participant’s interest in the Plan represented by the Matching Contributions and Fixed-Rate Contributions made on behalf of the Participant, with all earnings thereon credited to such contributions and all losses, expenses and distributions thereon debited from such contributions. A Participant’s Account shall consist of two subaccounts: the Participant’s Matching Contribution Account and the Participant’s Fixed-Rate Contribution Account. Notwithstanding the above, the Account of a Participant in this Plan who was a participant in the prior SERP will include amounts transferred to this Plan pursuant to Section 4.6.

(b)

Affiliated Employer . Affiliated Employer means any corporation which is a member of a controlled group of corporations (as defined in Code Section 414(b)) which includes the Employer; any trade or business (whether or not incorporated) which is under common control (as defined in Code Section 414(c)) with the Employer; any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in Code

Section 414(m)) which includes the Employer; and any other entity required to be aggregated with the Employer pursuant to Regulations under Code Section 414(o).

(c)

Allocation Date . The date as of which Matching Contributions and Fixed-Rate Contributions and Excess Contributions are allocated to a Participant’s Account. Except as otherwise provided herein, the Allocation Date for Matching Contributions shall be as soon as administratively feasible following the end of the Plan Year, or such earlier date as shall be determined by the Committee. The Allocation Date for Fixed-Rate Contributions shall be the allocation date for fixed-rate contributions under the Qualified Plan.

(d)

Applicable Code Provisions . Any and all limitations on contributions to a qualified retirement plan set forth in Code Sections 401(a) (17), 402(g), 401(k), 401(m) and 415.

(e)

Board of Directors . The Board of Directors or Managers of the Company or KAC, as indicated.

(f)

Cause . The Participant’s (1) engaging in fraud, embezzlement, gross misconduct or any act of gross dishonesty with respect to the Employer, (2) habitual drug or alcohol use which impairs the ability of the Participant to perform his duties with the Employer, (3) indictment with respect to, conviction of, or plea of guilty or no contest to, any felony, or other comparable crime under applicable local law (except, in any event, for motor vehicle violations not involving personal injuries to third parties or driving while intoxicated), or the Participant’s incarceration with respect to any of the foregoing that, in each case, impairs the Participant’s ability to continue to perform his duties with the Employer, or (4) material breach of any written employment agreement or other agreement between the Employer and the Participant, or of the Employer’s Code of Business Conduct, or failure by the Participant to substantially perform his or her duties for the Employer which remains uncorrected or reoccurs after written notice has been delivered to the Participant demanding substantial performance and the Participant has had a reasonable opportunity to correct such breach or failure to perform.

(g)

Change in Control . The occurrence on or after the Operative Date of any of the following events:

(i)

the acquisition by any Person of Beneficial Ownership of 35% or more of the combined voting power of the then-outstanding Voting Stock of KAC; provided, however, that:

(A)

for purposes of this Section 2.1(g)(i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition of Voting Stock of KAC directly from KAC (x) pursuant to KAC’s POR or (y) that is approved by a majority of the Incumbent Directors, (2) any acquisition of Voting Stock of KAC by KAC or any Subsidiary, (3) any acquisition of Voting Stock of KAC by any employee benefit plan (or related trust) sponsored or maintained by KAC or the Company or any Subsidiary (other than any voluntary employee beneficiary association established in connection with the POR), and (4) any acquisition of Voting Stock of KAC by any

			Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 2.1(g)(iii) below;

	(B)		if any Person acquires Beneficial Ownership of 35% or more of combined voting power of the then-outstanding Voting Stock of KAC as a result of a transaction described in clause (A)(1) of Section 2.1(a)(i) and such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of KAC representing 1% or more of the then-outstanding Voting Stock of KAC, other than in an acquisition directly from KAC pursuant to the POR, in an acquisition directly from KAC in a transaction that is approved by a majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or similar transaction effected by KAC in which all holders of Voting Stock are treated equally, such subsequent acquisition shall be deemed to constitute a Change in Control;

	(C)		a Change in Control will not be deemed to have occurred if a Person acquires beneficial ownership of 35% or more of the Voting Stock of KAC as a result of a reduction in the number of shares of Voting Stock of KAC outstanding unless and until such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of KAC representing 1% or more of the then-outstanding Voting Stock of KAC, other than in an acquisition directly from KAC pursuant to the POR, in an acquisition directly from KAC in a transaction that is approved by a majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or similar transaction effected by KAC in which all holders of Voting Stock are treated equally; and

	(D)		if at least a majority of the Incumbent Directors determine in good faith that a Person has acquired beneficial ownership of 35% or more of the Voting Stock of KAC inadvertently, and such Person divests as promptly as practicable a sufficient number of shares so that such Person beneficially owns less than 35% of the Voting Stock of KAC, then no Change in Control shall have occurred as a result of such Person’s acquisition; or

	(ii)		a majority of the Directors are not Incumbent Directors; or

	(iii)		the consummation of a Business Combination, unless, in each case, immediately following such Business Combination (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Stock of KAC immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination (including without limitation

			an entity which as a result of such transaction owns KAC or all or substantially all of KAC’s assets either directly or through one or more subsidiaries), (B) no Person (other than KAC, such entity resulting from such Business Combination, any employee benefit plan (or related trust) sponsored or maintained by KAC, any Subsidiary or such entity resulting from such Business Combination (other than any voluntary employee beneficiary association established in connection with the POR) or any Person that immediately prior to such Business Combination owns, directly or indirectly, 35% or more of the Voting Stock of KAC so long as such Person does not at such time own, directly or indirectly, more than 1% of the securities of the other corporation or other entity involved in such Business Combination to be converted into or exchanged for shares of Voting Stock of the entity resulting from such Business Combination pursuant to such Business Combination)) beneficially owns, directly or indirectly, 35% or more of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination, and (C) at least a majority of the members of the Board of Directors of the entity resulting from such Business Combination were Incumbent Directors at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or

	(iv)		approval by the stockholders of KAC of a complete liquidation or dissolution of KAC, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 2.1(a)(iii).

(h)		Code . The Internal Revenue Code of 1986, as amended from time to time.

(i)		Committee . The persons appointed to administer the Plan in accordance with Article VIII.

(j)		Company . Kaiser Aluminum Fabricated Products, LLC, a limited liability company organized and existing under the laws of the State of Delaware, or its successor or successors.

(k)		Compensation . For purposes of this Plan, Compensation shall have the same meaning as set forth in the Qualified Plan but without regard to any limitation on Compensation set forth in section 401(a)(17) of the Code.

(l)		Disability . A Participant shall be considered “Disabled” when he or she subject to a total and permanent disability as a result of bodily injury, disease or mental disorder which results in the Participant’s entitlement to long-term disability benefits under the Kaiser Aluminum Self-Insured Welfare Plan.

(m)		Effective Date . The effective date of the Plan is May 1, 2005.

(n)		Election Form . The document executed by an Eligible Employee pursuant to which the Eligible Employee elects a form of payment after the Participant’s Separation from Service.

(o)		Eligible Employee . An Employee of the Employer who is a member of a select group of management or an employee who in the sole and exclusive judgment of the Committee, because of his or her position and responsibilities, contributes materially to the continued growth, development and future business success of the Employer.

(p)		Employee . A person employed by the Employer.

(q)		Employer . The Company and any other participating company under the Qualified Plans.

(r)		ERISA . The Employee Retirement Income Security Act of 1974, as amended from time to time.

(s)		Exchange Act . The Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.

(t)		Fixed-Rate Contributions . The contributions, if any, that the Company may make to a Participant’s Fixed-Rate Contribution Account in accordance with Section 4.2 of the Plan.

(u)		Fixed-Rate Contribution Account . The record of a Participant’s interest in the Plan represented by the Fixed-Rate Contributions made on behalf of the Participant, with all earnings thereon credited to such Fixed-Rate Contributions on behalf of the Participant and all losses, expenses distributions and forfeitures thereon debited from such Fixed-Rate Contributions.

(v)		Incumbent Directors . The individuals who, on Operative Date, are Directors of KAC and any individual becoming a Director subsequent to the date hereof whose election, nomination for election by KAC’s stockholders, or appointment was approved by a vote of at least two-thirds of the then Incumbent Directors (either by a specific vote or by approval of the proxy statement of KAC in which such person is named as a nominee for director without objection to such nomination); provided, however, that an individual shall not be an Incumbent Director if such individual’s election or appointment to the Board occurs as a result of an actual or threatened election contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.

(w)		KAC . Kaiser Aluminum Corporation, a corporation organized and existing under the laws of the State of Delaware, or its successor or successors.

(x)		Matching Contributions . The contribution, if any, that the Company may make to a Participant’s Matching Contribution Account pursuant to Article 4.1 of the Plan.

(y)		Matching Contribution Account . The record of a Participant’s interest in the Plan represented by the Matching Contributions made on behalf of the Participant, with all earnings thereon credited to such Matching Contributions on behalf of the Participant and

		all losses, expenses and distributions thereon debited from such Matching Contributions. A Participant’s Matching Contribution Account shall be one hundred percent (100%) vested at all times.

(z)		Normal Retirement Age . A Participant’s sixty-second (62nd) birthday.

(aa)		Operative Date . July 6, 2006, the date the Plan was adopted by the Board of Directors of the Company and KAC.

(bb)		Participant . An Eligible Employee who becomes a Participant in the Plan pursuant to Article Ill of this Plan and any former Eligible Employee who is entitled to benefits under the Plan.

(cc)		Person . The meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d).

(dd)		Plan . Kaiser Aluminum Fabricated Products Restoration Plan, set forth herein, as amended and restated from time to time.

(ee)		Plan Year . The twelve (12) month period beginning on January 1st and ending on December 31st.

(ff)		Points . The sum of a Participant’s age and the Participant’s whole years of Service as determined under the Qualified Plan as of January 1, 2004.

(gg)		POR . The Second Amended Joint Plan of Reorganization of Kaiser Aluminum Corporation, Kaiser Aluminum & Chemical Corporation and Certain of their Debtor Affiliates, as modified and confirmed by entry of an order of the United States Bankruptcy Court for the District of Delaware on February 6, 2006, which confirmation was affirmed by entry of an order of the United States District Court for the District of Delaware on May 11, 2006.

(hh)		Prior SERP. The Kaiser Aluminum Supplemental Benefits Plan.

(ii)		Qualified Plan . The Kaiser Aluminum Savings and Investment Plan as in force and effect on the Effective Date and as may be amended from time to time thereafter and as applicable to the Participant.

(jj)		Rabbi Trust . Rabbi Trust means a grantor trust established by the Employer for purposes of setting aside funds for the payment of benefits under the Plan. All assets of such trust shall at all times be subject to the claims of the Employer’s general creditors and no Participant shall have a claim to any assets of a Rabbi Trust established pursuant to this Plan.

(kk)		Separation from Service . The termination of employment with the Employer and all Affiliated Companies, whether voluntarily or involuntarily and as determined in accordance with Code Section 409A and any guidance issued thereunder.

(ll)		Service . An Eligible Employee’s service as defined in the Qualified Plan for purposes of determining the Participant’s vested status under that plan (including service prior to the Effective Date of this Plan).

(mm)		Trustee . Trustee means the individuals or institution appointed by the Employer in an agreement establishing a Rabbi Trust and any successor trustee as may be named.

(nn)		Valuation Date . Each and every business day that the New York Stock Exchange is open.

(oo)		Voting Stock. Securities entitled to vote generally in the election of directors (or similar governing bodies).

2.2 Construction . The masculine gender, where appearing in the Plan, shall be deemed to include the feminine gender, and the singular may include the plural and vice versa, unless the context clearly indicates to the contrary.

2.3 Governing Law . The Plan shall be construed in accordance with and governed by the laws of the State of Delaware to the extent not preempted by federal law .

ARTICLE III

PARTICIPATION AND PARTICIPANT ELECTIONS

3.1 Participation . The Committee shall, from time to time, select those Employees who shall be Eligible Employees. Participation in the Plan shall be limited to Eligible Employees who meet such other eligibility criteria as the Committee may establish from time to time.

An Eligible Employee selected for participation in this Plan in accordance with this Section 3.1 shall become a Participant on the first day of the month coinciding with or next following his or her selection as a Participant; provided, however, that Participants who are determined by the Committee to be eligible as of the Effective Date shall be eligible as of the Effective Date.

3.2 Participant Elections .

(a)

An Employee who becomes eligible to participate in the Plan in accordance with Section 3.1 above may complete an Election Form setting forth the form of payment for receipt of the vested portion of his or her Account following the Participant’s Separation from Service from the options set forth:

	(1)		Single sum payment of the vested balance in the Participant’s Account on the date specified by the Participant that is at least six (6) months following the Participant’s Separation from Service.

	(2)		Annual installments (between two (2) and ten (10) installments) as specified by the Participant, commencing on the date that is specified by the Participant that is at least six (6) months following the Participant’s Separation from Service, and continuing on each anniversary of such Separation from Service.

Such Election Form once made shall be irrevocable, except as otherwise provided in (b) below. In the event that the Participant fails to make an election as to the form of payment following the Participant’s Separation from Service, the Participant’s vested Account balance shall be paid in a single sum distribution as soon as administratively feasible after the date that is six (6) months following the Participant’s Separation from Service.

(b)

Notwithstanding any other provision of the Plan to the contrary, a Participant may change his or her election as to the form of payment subject to the following:

	(1)		such change in election will not take effect until at least twelve (12) months after the date the new election is made;

	(2)		the election must be made at least twelve (12) months prior to the first scheduled payment; and

	(3)		the first payment with respect to which such election is made shall be deferred for a period of not less than five (5) years from the date such payment would otherwise be made.

3.3 Cessation of Participation . If any Participant does not incur a Separation from Service but ceases to be an Eligible Employee then, during the period that such Participant is not an Eligible Employee such Participant’s Account shall continue to be adjusted as provided in Article V hereof.

ARTICLE IV

COMPANY CONTRIBUTIONS

4.1 Matching Contributions . If, during any year, a Participant’s matching employer contributions under the Qualified Plan are limited by Applicable Code Provisions, the difference between (i) the matching employer contributions that could have been made to the Qualified Plan but for Applicable Code Provisions and (ii) the maximum matching employer contributions that could have been made to a Participant’s matching contribution account under the Qualified Plan taking into account all Applicable Code Provisions shall be credited or contributed to the Participant’s Matching Contribution Account under this Plan. To be eligible to receive Matching Contributions under this Plan, the Participant must be making salary deferral contributions to the Qualified Plan as of the date the Participant first becomes a Participant in this Plan and as of the first day of each Plan Year thereafter, but Matching Contributions under this Plan shall be determined as if the Participant had elected to make the maximum permissible salary deferral contributions under the Qualified Plan sufficient to receive the maximum matching employer contribution under the Qualified Plan, without regard to Participant’s actual salary deferral elections. Such allocation shall be made as of the Allocation Date; provided, however, in the event that any matching contributions to the Qualified Plan on behalf of a Participant are determined to be excess contributions due to Applicable Code Provisions, such allocation shall be made as of the date such excess contributions in the Qualified Plan are forfeited by the Participant or as soon as administratively feasible thereafter.

4.2 Fixed-Rate Contributions . The Company shall contribute or credit to a Participant’s Fixed-Rate Contribution Account an amount determined in accordance with the schedule below based on his or her Points.


Points	Percentage of Compensation
Less than 39		2
30 to 49		4
50 to 59		6
60 to 69		8
70 or more		10

The Fixed-Rate Contributions determined under this Section 4.2 shall be allocated to the Fixed-Rate Contribution Accounts of Participants who are employed by an Employer on the last day of the Plan Year, or who Separated from Service after reaching Normal Retirement Age or due to death or Disability during the Plan Year. For purposes of the Fixed-Rate Contributions, only Compensation in excess of the Code section 401(a)(17) limit shall be considered; provided, however, that to the extent that fixed-rate contributions to the Qualified Plan on behalf of any Participant on Compensation below the Code section 401(a)(17) limit cannot be made to such Qualified Plan due to Applicable Code Provisions, such fixed rate contributions shall be made on behalf of such Participant to his or her Fixed-Rate Contribution Account under this Plan.

4.3 Vesting .

(a)

Except as provided in Section 4.3(b), a Participant shall be fully vested in his or her Matching Contribution Account at all times regardless of Service. Except as provided in Section 4.3(b), a Participant shall be vested in his or her Fixed-Rate Contribution Account in accordance with the following schedule based on his or her years of service at the Participant’s Separation from Service with all Affiliated Companies:


Years of Service	Vested Percentage
Less than 5		0
5 or more		100

Except as provided in Section 4.3(b), a Participant shall also be fully vested in his or her Fixed-Rate Contribution Account upon a Change of Control, death, Disability or upon reaching Normal Retirement Age prior to a Separation from Service.

(b)

Notwithstanding any other provisions of the Plan to the contrary, in the event a Participant’s employment with the Employer is terminated for Cause, the Participant shall, immediately upon such termination, forfeit the entire amount of his or her Matching Contribution Account and Fixed-Rate Contribution Account, and the amount thus forfeited shall no longer be part of the Participant’s Plan benefit.

4.4 Forfeitures . A Participant to whom the vesting schedule in Section 4.3 is applicable shall, immediately upon Separation from Service, forfeit that portion of the amount of his or her Fixed-Rate Contribution Account that is not fully vested, and the amount thus forfeited shall no longer be part of the Participant’s Plan benefit. Any forfeited benefits under Section 4.3(b) and

Section 4.4 held in a Rabbi Trust shall revert to the Employer or may be held in the Rabbi Trust to offset future Employer contributions.

4.5 Contributions for 2005 . As soon as administratively feasible following the Operative Date, the Company shall make Matching Contributions and Fixed-Rate Contributions for the 2005 Plan Year.

4.6 Prior SERP Benefit. The lump-sum actuarial equivalent amount of the benefit accrued to each participant under the Prior SERP as of May 1, 2005 will be transferred to this Plan as soon as administratively feasible following the Operative Date and will be treated as a Matching contribution for all purposes of the Plan other than vesting. The Prior SERP benefit, plus accretions, shall be fully vested at all times.

ARTICLE V

MAINTENANCE OF PARTICIPANT ACCOUNTS

5.1 Establishment of Participant Accounts . Separate Accounts shall be established and maintained for each Participant, and more than one such Account may be established and maintained for a Participant, as deemed necessary by the Committee for administrative purposes. A Participant’s Account shall be utilized solely as a device for the measurement and determination of the amounts to be paid to the Participant pursuant to this Plan, and shall not constitute or be treated as a trust fund of any kind unless set aside in a Rabbi Trust. The Committee shall determine the balance of each Account, as of each Valuation Date, by adjusting the balance of such Account as of each Valuation Date to reflect changes in the value of the hypothetical investment benchmarks thereof, credits and debits pursuant to this Article V, and distributions pursuant to Article VI hereof. All costs, charges, and expenses incurred in connection with the administration of the Plan shall be paid by the Employer.

5.2 Valuation of Accounts . Each Participant’s Account is a bookkeeping account, the value of which shall be based upon the performance of hypothetical investment benchmarks designated by the Participant and selected by the Committee. Notwithstanding the foregoing, the terms of this Plan place no obligation upon the Company to invest or to continue to invest any portion of the amounts in the Account, to invest in or to continue to invest in any specific asset, to liquidate any particular investment, or to apply in any specific manner the proceeds from the sale, liquidation, or maturity of any particular investment. The Company assumes no risk of any decrease in the value of any investments or the Participant’s Account, and the Company’s sole obligations are to maintain the Participant’s Account and make payments to the Participant or the Participant’s beneficiaries as herein provided.

5.3 Hypothetical Investment Benchmarks . Hypothetical Investment Benchmarks shall be established under the Plan as follows.

(a)

Investment Direction . Each Participant shall he entitled to direct the manner in which the Participant’s Account will be deemed to be invested, by selecting among the hypothetical investment benchmarks permitted under the Plan and specified by the Participant in accordance with procedures established by the Committee. The hypothetical investment benchmarks shall be those investment fund options specified by the Committee.

Notwithstanding anything to the contrary herein, earnings and losses based on a Participant’s hypothetical investment benchmarks investment elections shall begin to accrue as of the date such Participant’s Matching Contributions and/or Fixed-Rate Contributions are credited to the Participant’s Account. A designation of hypothetical investment benchmark shall continue in effect unless and until amended with the submission of a new designation in accordance with Section 5.3(b) below. Each successive designation of hypothetical investment benchmarks for a Participant’s Accounts may be applicable to either future contributions to or the cumulative balance of the Participant’s Account, or to both, at the election of the Participant.

(b)

Transfers Among Hypothetical Investment Benchmarks . Amounts credited to a Participant’s Account may be transferred among hypothetical investment benchmarks pursuant to an allocation election which may be made according to procedures established by the Committee. Such allocation election shall be effective as of the date determined in accordance with such procedures.

(c)

Continuation of Hypothetical Investment Benchmarks . Credits to a Participant’s Account in accordance with this Article V shall continue until the Account balance is paid in full to the Participant or the Participant’s beneficiary.

5.4 Statement of Participant Accounts . The Committee shall provide periodically to each Participant a statement setting forth the balance of such Participant’s Account as of the end of the most recently completed accounting period, in such form as the Committee deems desirable. Such statements shall be provided to Participants no less frequently than annually.

ARTICLE VI

D1STRIBUTION OF BENEFITS

6.1 Distribution of Benefits . A Participant shall be entitled to a distribution of his vested Account balance as of the date that is at least six (6) months following his Separation from Service in accordance with his Election Form or as specified in Section 3.2.

ARTICLE VII

DEATH BENEFITS

7.1 Death Benefits . Any Plan benefits not distributed prior to the Participant’s death shall be paid to the legal representative of the Participant’s estate, or if no such representative is appointed, the Committee shall distribute such Plan benefits to the Participant’s surviving spouse or if the Participant has no surviving spouse, to the Participant’s heirs at law. All payments and distributions pursuant to this Section 7.1 shall be in single lump sums.

ARTICLE VIII

ADMINISTRATION

8.1 The Committee . Subject to the provisions of this Article VIII, the Plan shall be administered by the Committee. The Company, acting through its Board of Directors or through a committee appointed by the Board for this purpose (hereinafter “Board”) shall be empowered to appoint and remove the Trustee and members of the Committee from time to time as it deems necessary.

8.2 Powers and Duties of the Committee . The Committee shall:

	(i)		determine and designate from time to time the Eligible Employees;

	(ii)		interpret the Plan;

	(iii)		prescribe, amend, and rescind any rules and regulations necessary or appropriate for the administration of the Plan;

	(iv)		employ agents, attorneys, accountants or other persons (who also may he employed by or represent the Company) for such purposes as the Committee considers necessary or desirable in connection with its duties hereunder; and

	(v)		make such factual or other determinations and take such other action as authorized by this Plan or as it deems necessary or advisable. Any interpretation, determination, or other action made or taken by the Committee shall, subject to Section 8.3 hereof be final, binding, and conclusive on all interested parties. The Committee may, in its sole discretion, impose limitations, restrictions and conditions on the Participants’ rights to receive benefits as set forth in the Participant’s Election Form.

8.3 Nondiscriminatory Exercise Of Authority . Whenever, in the administration of the Plan, any discretionary action by the Committee is required, the Committee shall exercise its authority in a nondiscriminatory manner so that all persons similarly situated will receive substantially the same treatment.

8.4 Participant as a Committee Member . In the event the Committee exercises any discretionary authority under the Plan with respect to a Participant who is a member of the Committee, such discretionary authority shall be exercised solely and exclusively by those members of the Committee other than the Participant. In the event the remaining members of the Committee cannot reach a majority conclusion, the Board of Directors of the Company shall appoint a temporary substitute Committee member to exercise all the powers of a qualified Committee member concerning the matter in which such Participant cannot so act or for which there is a deadlock.

8.5 Claims Procedure . The Committee shall make all determinations in its sole discretion as to the right of any Participant to a benefit under the Plan. Any denial by the Committee of a claim for benefits under the Plan by a Participant shall be stated in writing by the Committee and delivered or mailed to the Participant within 90 days after receipt by the Committee of the Participant’s claim, unless special circumstances require an extension of time for processing the

claim. If such an extension is required, written notice thereof shall be provided to the Participant before the end of this 90-day period. The extension shall not exceed 90 days from the end of the initial 90-day period. Such notice of denial of benefits under the Plan shall set forth the specific reasons for the denial. The notice shall describe any additional information or material necessary to complete the claim, an explanation of why the information or material is necessary, and the Plan’s claim review procedure. In addition, the Committee shall afford a reasonable opportunity to any Participant whose claim for benefits has been denied to submit a written request that the decision denying the claim be reviewed by the Committee. This appeal shall be filed within 60 days after the receipt by the Participant of the notice informing him of the Committee’s denial of the Participant’s claim. Failure to file such an appeal by the Participant shall result in the forfeiture by such Participant of such right. The Committee shall notify the Participant of its decision in writing within 60 days after receipt by the Committee of the Participant’s appeal, unless an extension of time for processing the appeal is required. If such an extension is required, written notice thereof shall be provided to the Participant before the end of this 60-day period. The extension shall not exceed 60 days from the end of the initial 60-day period. The decision of the Committee shall be final and binding on all parties.

ARTICLE IX

MISCELLANEOUS PROVISIONS

9.1 No Commitment as to Employment . The adoption and maintenance of this Plan shall not enlarge or otherwise affect the terms and conditions of a Participant’s employment by the Employer, and the Employer may terminate or otherwise modify the terms and conditions of employment of the Participant as freely and with the same effect as if the Plan had not been established. The Participant shall remain subject to discharge as if the Plan had never been adopted. The Plan does not alter any employment-at-will relationship which may exist between the Employer and the Participant.

9.2 Indemnification of Board of Directors, Committee and Others . No member of the Company’s Board of Directors, the Board of Directors of KAC, or the board of directors of any of the affiliates of the Company or KAC or the Committee, nor any of their respective officers or employees acting on their behalf or on behalf of the Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Company’s Board of Directors, the Boards of Directors of KAC, the boards of directors of any of the affiliates of the Company or KAC or the Committee and each of their respective officers or employees acting on their behalf shall, to the extent permitted by law and the Company’s by-laws and other organizational documents, be fully indemnified and protected by the Company in respect to any such action, determination or interpretation.

9.3 Amendment; Termination . The Plan and any Election Form may be altered or amended in whole or in part, at any time and from time to time, by the Committee, in its sole discretion, upon thirty (30) days’ prior written notice delivered to each Participant affected by any such action; provided, however, that the Committee shall not alter or amend a Participant’s Election Form except to the extent necessary to comply with the terms of the Plan or applicable law, including Section 409A of the Code. The Company reserves the right to terminate this Plan at any time.

No amendment or termination by the Company shall reduce the accrued benefits of a Participant, except to the extent required to comply with applicable law.

If the Company terminates the Plan, the Company shall distribute to each Participant, within 90 days after the effective date of termination, such Participant’s Account, valued as of the date of termination, but only in compliance with Section 409A of the Code. Notwithstanding any other provisions of this Plan, if the Company terminates the Plan, the Company may, in its sole and absolute discretion, make a single lump-sum payment to each Participant of the balance in the Participant’s Account, but only in compliance with Section 409A of the Code.

9.4 Binding Effect . This Plan shall be binding upon and inure to the benefit of the Employer, its successors and assigns, and the Participants and their beneficiaries, heirs, assigns and personal representatives.

9.5 Construction of Plan . The captions used in the Plan are for convenience only and shall not be construed in interpreting the Plan. Whenever the context so requires in this Plan, the masculine shall include the feminine and neuter, and the singular shall also include the plural, and conversely.

9.6 Validity of Plan . The invalidity or illegality of any provision of the Plan shall not affect the legality or validity of any other part thereof.

9.7 Title To Assets . No Participant or beneficiary shall have any right to, or interest in, any assets of the Employer upon termination of the Participant’s employment or otherwise, except as provided from time to time under this Plan.

9.8 Expenses . Any expenses incurred by the Company, the Committee, or the Employer relative to the adoption, implementation, interpretation and administration of the Plan shall be borne by the Company.

9.9 Inalienability of Benefits . The right of any Participant or the participant’s beneficiary to any benefit or payment under the Plan shall not be subject to alienation or assignment, and to the fullest extent permitted by law, shall not be subject to attachment, execution, garnishment, sequestration or other legal or equitable process. In the event a Participant or the Participant’s beneficiary who is receiving or is entitled to receive benefits under the Plan attempts to assign, transfer or dispose of such right, or if an attempt is made to subject said right to such process, such assignment, transfer or disposition shall be null and void. The Plan shall not make payments to an alternate payee pursuant to a domestic relations order, even if such order qualifies as a “qualified domestic relations order” under Section 414(p) of the Code.

9.10 Payment of Benefits . Whenever any benefit which shall be payable under the Election Form is to be paid to or for the benefit of any person who is then a minor or determined to be incompetent by qualified medical advice, the Company need not require the appointment of a guardian or custodian, but shall be authorized to cause the same to be paid over to the person having custody of such minor or incompetent, or to cause the same to be paid to such minor or incompetent without the intervention of a guardian or custodian, or to cause the same to be paid to a legal guardian or custodian of such minor or incompetent if one has been appointed or to cause the same to be used for the benefit of such minor or incompetent.

ARTICLE X

SOURCE OF PAYMENT OF BENEFITS

10.1 Source of Payment of Benefits . The Plan is a nonqualified, unfunded, deferred compensation plan. Therefore, all benefits owing under the Plan shall be paid out of the Employer’s general corporate funds, which are subject to the claims of creditors, or out of a Rabbi Trust that the Employer may establish or authorize; provided that all assets paid into any such trust shall at all times before actual payment to a Participant remain subject to the claims of general creditors of the Employer. Neither the Participant nor a Participant’s beneficiary shall have any right, title or interest whatever in or to, or any claim, preferred or otherwise, in or to, any particular assets of the Employer as a result of participation in the Plan, or any trust that the Employer may establish to aid in providing the payments described in the Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust or a fiduciary relationship of any kind between the Employer and a Participant. No Participant shall acquire any interest greater than that of an unsecured creditor in any assets of the Employer or in any trust that the Employer may establish for the purposes of paying benefits hereunder.

The Company may establish a trust and fund the trust for the purpose of paying benefits owing under the Plan. However, in the absence of action by the Company, nothing herein shall be construed to require the creation or funding of a trust by the Company or any Employer for the purpose of paying benefits owing under the Plan.

IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the foregoing instrument comprising the Kaiser Aluminum Restoration Plan, KAISER ALUMINUM FABRICATED PRODUCTS, LLC, as the Employer, has caused this instrument to be duly executed by its proper officers this 6th day of July, 2006, to be effective as of the Effective Date.

ATTEST: KAISER ALUMINUM FABRICATED PRODUCTS, LLC

Exhibit 10.15

AMENDMENT
TO
AMENDED AND RESTATED NON-EXCLUSIVE CONSULTING AGREEMENT

This AMENDMENT TO AMENDED AND RESTATED NON-EXCLUSIVE CONSULTING AGREEMENT (this “Amendment”) is entered into effective as of the 30 ^th day of June, 2006, between Edward F. Houff (“Consultant”) and Kaiser Aluminum & Chemical Corporation, a corporation with offices located at 27422 Portola Parkway, #350, Foothill Ranch, CA 92610-2831 (“Kaiser”).

WHEREAS, Consultant and Kaiser have previously entered into that certain Amended and Restated Non-Exclusive Consulting Agreement, effective as of August 16, 2005 (the “Agreement”); and

WHEREAS, Consultant and Kaiser desire to amend the Agreement as provided for herein.

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

1. Amendment to Section 1 of the Agreement . Section 1 of the Agreement is hereby amended to delete both references to “June 30, 2006” and replace such references with “July 6, 2006.”

2. Amendment to Section 3 of the Agreement . A new Section 3.2.5 shall be added and shall read in its entirety as follows:

3.2.5 There shall be no Base Fee for the period from July 1, 2006 through July 6, 2006. Hours worked will be billed at $450 per hour, exclusive of expenses, subject to the same terms and conditions for travel, weekend and holiday work as provided in paragraph 3.1.1.

3. Reaffirmation . In all other respects, the terms and conditions of the Agreement shall remain as set forth therein.

4. Counterparts . This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original but all of which together shall be deemed to be one and the same agreement.

[Signatures on following page]

IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by the respective duly authorized officers of the parties on the date first written above.


	KAISER ALUMINUM & CHEMICAL CORPORATION
	By:	/s/ John M. Donnan
		John M. Donnan, Vice President, Secretary
		and General Counsel


	CONSULTANT
	By:	/s/ Edward F. Houff
		Edward F. Houff

Exhibit 14.1

KAISER ALUMINUM CORPORATION

CODE OF BUSINESS CONDUCT AND ETHICS

Introduction

This Code of Business Conduct and Ethics describes the basic principles of conduct that we share as officers and employees of the Company (which includes, for purposes of this Code of Business Conduct and Ethics, Kaiser Aluminum Corporation and its subsidiaries). This Code also applies to the Company’s directors and should be provided to, and followed by, the Company’s agents and representatives, including without limitation any consultants. Violation of this Code may result in disciplinary action, varying from reprimand to dismissal.

This Code is intended to provide a broad overview of basic ethical principles that guide our conduct. In some circumstances, we maintain more specific policies on the topics referred to in this Code. Should you have any questions regarding these policies, please consult your supervisor, the location manager or the office of the Compliance Officer.

Compliance Officer

The Compliance Officer is responsible for ensuring that we comply with this Code. Our General Counsel serves as the Compliance Officer and reports to the Audit Committee of the Company’s Board of Directors when serving in that capacity. The Compliance Officer shall inform the other standing committees of the Board of Directors of matters coming to his or her attention as warranted.

Compliance with Laws, Rules and Regulations

We strive to comply with all laws, rules and regulations of the places where the Company does business. If a law, rule or regulation is unclear, or conflicts with a provision of this Code, you should seek advice from your supervisor, the location manager or the Compliance Officer, but always seek to act in accordance with the ethical standards described in this Code.

Conflicts of Interest

We conduct our business affairs in the best interest of the Company and should therefore avoid situations where our private interests interfere in any way with the Company’s interests. We need to be especially sensitive to situations that have even the appearance of impropriety and promptly report them to a supervisor or, if appropriate, a more senior manager. If you believe that a transaction, relationship or other circumstance creates or may create a conflict of interest, you should promptly report this concern. It is the Company’s policy that circumstances that pose a conflict of interest for its employees are prohibited unless a waiver is obtained from the location manager or the Compliance Officer.

Record Keeping

We require honest and accurate recording and reporting of information in order to make responsible business decisions. We document and record our business expenses accurately. Questionable expenses should be discussed with the appropriate personnel in our accounting department.

All of the Company’s books, records, accounts and financial statements are maintained in reasonable detail, appropriately reflect our transactions and conform both to applicable legal requirements and to our system of internal controls.

We avoid exaggeration, derogatory remarks, guesswork or inappropriate characterizations of people and companies in our business records and communications. We maintain our records according to our record retention policies. In accordance with those policies, in the event of litigation or governmental investigation, please consult our General Counsel.

Public Reporting

The Company is a public company and, as a result, files reports and other documents with the Securities and Exchange Commission (the “SEC”). The Company also issues press releases and makes other public statements that include financial and other information about the Company’s business, financial condition and results of operations. We endeavor to make full, fair, accurate, timely and understandable disclosure in reports and documents the Company files with, or submits to, the SEC and in the Company’s press releases and other public communications.

We require cooperation and open communication with the Company’s internal and outside auditors. It is illegal to take any action to fraudulently influence, coerce, manipulate or mislead any internal or external auditor engaged in the performance of an audit of our financial statements.

The laws and regulations applicable to filings made with the SEC, including without limitation those applicable to accounting matters, are complex. While the ultimate responsibility for the information included in these reports rests with senior management, numerous other employees participate in the preparation of these reports or provide information included in these reports. The Company maintains disclosure controls and procedures to ensure that the information included in the reports that the Company files with, or submits to, the SEC is collected and communicated to senior management in order to permit timely disclosure of the required information.

If you are requested to provide, review or certify information in connection with the Company’s disclosure controls and procedures, you must provide the requested information or otherwise respond in a full, accurate and timely manner. Moreover, even in the absence of a specific request, you should report any information that you believe should be considered for disclosure in our reports to the SEC.

If you have questions or are uncertain as to how the Company’s disclosure controls and procedures may apply in a specific circumstance, promptly contact your supervisor or a more senior manager. We want you to ask questions and seek advice. Additional information regarding how to report your questions or concerns (including on a confidential or anonymous basis) is included below in this Code under the heading “Reporting Illegal or Unethical Behavior.”

Insider Trading

We do not trade in Company stock on the basis of material, non-public information concerning the Company, nor do we “tip” others who may trade in Company securities.

Corporate Opportunities

We do not personally take opportunities that are discovered through the use of Company property, information or position without the prior consent of the Board of Directors, and we do not compete with the Company.

Competition and Fair Dealing

We compete fairly and honestly in the markets in which the Company operates. We do not engage in unethical or illegal business practices such as stealing proprietary information, possessing trade secret information that was obtained without the owner’s consent or inducing disclosure of that type of information by past or present employees of other companies.

Business Entertainment and Gifts

We recognize that business entertainment and gifts are meant to create good will and sound working relationships, not to gain unfair advantage with customers or suppliers. Neither we nor our family members offer, give or accept any gift or entertainment unless it: (a) is not a cash gift; (b) is consistent with customary business practices; (c) is not excessive in value; (d) cannot be construed as a bribe or payoff; and (e) does not violate any laws or regulations. Any questionable gift or invitation should be discussed with a supervisor or, if appropriate, a more senior manager.

Discrimination and Harassment

The diversity of our employees is a tremendous asset. We provide equal opportunity in all aspects of employment and do not tolerate discrimination or harassment of any kind. Unwelcome sexual advances, derogatory comments based on racial or ethnic characteristics or sexual orientation, and similar types of harassment are strictly prohibited.

Health and Safety

We strive to provide a safe and healthful work environment by following safety and health rules and practices and promptly reporting accidents, injuries and unsafe equipment, practices or conditions to a supervisor or more senior manager.

We do not permit violence or threatening behavior in our workplaces. We report to work in condition to perform our duties at our best, free from the influence of illegal drugs or alcohol. We do not tolerate the use of illegal drugs in the workplace.

Confidentiality

We protect confidential information. Confidential information includes proprietary information such as trade secrets, patents, trademarks, copyrights, business plans, marketing plans, sales forecasts, engineering and manufacturing ideas, designs, databases, records, salary information and unpublished financial data and reports, as well as any non-public information that might be of use to competitors or harmful to us or our customers if disclosed. It also includes information that suppliers and customers have entrusted to us on a confidential basis. Our personal obligation not to disclose confidential information continues even after employment ends.

Protection and Proper Use of Company Assets

Theft, carelessness and waste of Company assets have a direct impact on the Company’s profitability and should be avoided. Any suspected incident of fraud or theft should be immediately reported to a supervisor or, if appropriate, a more senior manager for investigation. We carefully safeguard the Company’s confidential information. Unauthorized use or distribution of confidential information is prohibited and could also be illegal, resulting in civil or even criminal penalties.

Payments to Government Personnel

In compliance with the United States Foreign Corrupt Practices Act, we do not give anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. We do not promise, offer or deliver to any foreign or domestic government employee or official any gift, favor or other gratuity that would be illegal. The Compliance Officer can provide guidance in this area.

The laws or customs of other countries in which we operate may be less clear than the laws of the United States. It is the Company’s policy to comply with those laws or customs; however, if a local law or custom seems to contradict the principles described in this Code, contact a supervisor or the Compliance Officer for guidance.

Waivers

Only the Board of Directors may waive a provision of this Code for the Company’s executive officers or directors, and any waiver should be appropriately disclosed in a report filed with the SEC within four business days after the waiver. Waivers of this Code for any other employee may be made only by a location manager or the Compliance Officer, and then only under special circumstances.

Reporting Illegal or Unethical Behavior

In order to encourage reports of illegal or unethical behavior (including without limitation violations of this Code), we keep all reports confidential and do not allow retaliation for good faith reports of possible misconduct by others. It is also our duty to cooperate in internal investigations of alleged misconduct.

We must all work to ensure prompt and consistent action against unethical or illegal behavior. Oftentimes a violation of this Code will be easy to recognize and should be promptly reported to a supervisor or, if appropriate, a more senior manager. However, in some situations it is difficult to know right from wrong. Since none of us can anticipate every situation that will arise, it is important that we have a way to approach a new or sensitive question or concern. Here are some questions that can be asked:

What do I need to know? In order to reach the right solutions, we must be as fully informed as possible.

What specifically am I being asked to do? Does it seem unethical or improper? This will focus the inquiry on the specific action in question, and the available alternatives. Use judgment and common sense. If something seems unethical or improper, it probably is.

What is my responsibility? In most situations, there is shared responsibility. Should colleagues be informed? It may help to get others involved and discuss the issue.

Have I discussed the issue with a supervisor? This is the basic guidance for all situations. In many cases, a supervisor will be more knowledgeable about the question and will appreciate being brought into the decision-making process. Remember that it is the supervisor’s responsibility to help solve problems.

Should I seek help from Company management? In the case which it may not be appropriate to discuss an issue with a supervisor, or where you would not be comfortable approaching a supervisor with your question, discuss it with your location manager. If for some reason you do not believe that your concerns have been appropriately addressed, you should seek advice from the Compliance Officer or from a representative of the Company’s InTouch program. You may also contact an InTouch representative if you do not feel comfortable discussing your concern with your supervisor or location manager or the Compliance Officer and would prefer to submit a confidential or anonymous report of concerns regarding alleged violations of this Code, including without limitation concerns with respect to questionable accounting or auditing matters. InTouch representatives are available 24 hours a day, 7 days a week and you may contact InTouch in one of two ways:

	•		By telephone – dial 1-866-204-9793 (toll free)

	•		By email – Send a message to info@getintouch.com.

Conclusion

The Company’s good name and reputation depend, to a very large extent, upon you taking personal responsibility for maintaining and adhering to the policies and guidelines set forth in this Code. Your business conduct on behalf of the Company must be guided by the policies and guidelines set forth in this Code.

Exhibit 99.1

FOR IMMEDIATE RELEASE

For Information: Geoff Mordock
Telephone: (213) 489-8271

Kaiser Aluminum Emerges from Chapter 11

Competitive and Financial Strength Positions the Company for Success; KALU Shares to Begin Trading on NASDAQ July 7

Foothill Ranch, Calif., July 6, 2006 — Kaiser Aluminum Corporation (NASDAQ: KALU) announced that its Plan of Reorganization became effective today and the company has emerged from Chapter 11.

“Today is a great day for Kaiser Aluminum,” said Jack Hockema, Chairman, President and CEO of Kaiser Aluminum. “I would like to express my gratitude to every one of our stakeholders — customers, suppliers, employees and other partners — who stood by us over the past four-plus years of challenging times.

“The new Kaiser Aluminum emerges with fabricated aluminum products as the core business and is a vastly different company from the one that filed for reorganization in early 2002. Non-strategic commodity businesses were divested, and we have addressed all of the material debt, legacy and asbestos-related liabilities that confronted the company prior to bankruptcy. It is particularly gratifying that we were able to develop a consensual plan that was overwhelmingly accepted by our constituents.

“We are very excited about the future for Kaiser Aluminum. Our financial and competitive strength positions us to grow and withstand the inevitable ebb and flow of business cycles. We will continue organic growth with emphasis on plate products, forgings and custom extrusions. Our current $75 million expansion initiative at the Spokane, Washington rolling mill is the cornerstone of this strategy. In addition, we have an excellent platform for external growth, and will consider acquisitions that are complementary to our current business structure with an emphasis on value creation for our shareholders.

“We remain intensely focused on providing Best In Class performance for our customers. We will continue to produce a broad array of fabricated aluminum products for customers that require highly engineered applications while deploying lean enterprise principles to be a low cost producer.

“While our markets are cyclic, they are growing. The global market for aerospace and high-strength products is now exceptionally strong, and our customers forecast additional usage of aluminum plate over the next several years. As energy prices rise, demand for more fuel-efficient vehicles will provide opportunities to grow our current business in the automotive industry. Looking out beyond the current business cycle where the industry is experiencing historically high pricing, we anticipate our sales growth and cost reduction initiatives to cushion the impact of prices returning to more normal levels,” concluded Hockema.

Kaiser Aluminum began the distribution of shares of common stock today. Shares will commence trading tomorrow, July 7, on NASDAQ under the ticker symbol KALU.

Additional information regarding emergence related matters can be found in a current report on Form 8-K that the company filed today with the Securities and Exchange Commission.

Kaiser Aluminum is a leading producer of fabricated aluminum products for aerospace and high-strength, general engineering, automotive and custom industrial applications. For more information, please visit our Web site at www.kaiseraluminum.com.

F-1046

Company press releases may contain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “estimates,” “will,” “should,” “plans” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. Kaiser cautions that such forward-looking statements are not guarantees of future events and involve significant risks and uncertainties, and that actual events may vary materially from those expressed or implied in the forward-looking statements as a result of various factors. These factors include the effectiveness of management’s strategies and decisions, general economic and business conditions, developments in technology, new or modified statutory or regulatory requirements, and changing prices and market conditions. Certain sections of the Company’s Annual Report on Form 10-K, as amended by Form 10-K/A, identify other factors that could cause differences between such forward-looking statements and actual results (for example, see Item 1A. “Business —Risk Factors” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”). No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements.